Why Median Net Worth of $1.06 Million Doesn’t Make Most Americans Rich

The Federal Reserve’s latest Survey of Consumer Finances reports that the median net worth of U.S. households reached $1.0637 million in 2025, a figure often cited to suggest widespread wealth accumulation. However, this measurement includes the value of primary residences, an illiquid asset that does not reflect true financial flexibility. According to UBS’s Global Wealth Report, 23.8 million Americans—7% of the population—qualify as millionaires by this standard, but Henley & Partners estimates only 6 million, or 2.2% of adults, are liquid millionaires when excluding home equity. Including primary residence value distorts wealth assessments because homes generate no cash flow and cannot be easily liquidated without transaction costs or lifestyle disruption. A $1.5 million home may boost net worth on paper, but it does not provide the same accessibility as stocks, bonds, or cash equivalents. Mechanisms like home equity lines of credit or refinancing come with costs and debt obligations, limiting true liquidity. The gap between UBS’s 23.8 million millionaires and Henley’s 6 million liquid millionaires underscores how real estate inflation skews perceptions of wealth. Households with high home equity may appear affluent but still face cash flow constraints, emergency fund vulnerabilities, and retirement income challenges. A family with $1.2 million in investable assets and a $400,000 home has far greater financial flexibility than one with $200,000 in savings and a $1.4 million residence, despite identical gross net worth. Experts argue that genuine wealth requires liquid assets that can be deployed without disruption. Home equity, while valuable, does not offer the same flexibility as stocks or cash, which can be accessed immediately for emergencies or opportunities. This distinction explains why only a small fraction of Americans—about one in 45—truly qualify as liquid millionaires, despite broader net worth figures suggesting otherwise.