Our house in Portsmouth is worth far more than we paid for it in 2008.
We have maintained it, replaced things that wore out and made improvements along the way. But we didn’t become smarter or work harder every time Zillow, the city assessor or the real estate market decided it was worth more.
The house did the appreciating.
That appreciation is real. It gives us security, something we can borrow against and something to leave our children. But it also raises the price another family must pay to live here. The same increase that makes one homeowner wealthier moves the house farther beyond the reach of a teacher, nurse, tradesperson or young professional trying to buy it.
For one family, rising prices create wealth. For another, they take away the keys.
That is a small example of the much larger divide reshaping the American economy. It isn’t simply a contest between rich and poor. Increasingly, it is the difference between people who live mainly on what they earn and people whose assets earn for them.
Federal Reserve data show that the wealthiest 1 percent owns about a third of the nation’s household wealth. The entire bottom half owns only a small fraction.¹ The difference isn’t merely how much people own. It is what they own.
Most families own the things they live in, drive and use. The wealthy own a much larger share of the stocks, businesses and financial assets that produce profits and create still more wealth.²