<p>50% of households have assets(BOC) and peoples home usually makes up 80% of these peoples assets(BOC).</p>
<p>You're comparing (X|Y) to (X)</p>
<p>Also keep in mind some odd things: most people graduating from college have a negative net worth despite living in a house with a positive value and pensions aren't counted in net worth stats but if you own stock(you own your own company or invest) that is.</p>
<p>&quot;Assume home values are Gaussian&quot; is a pretty good assumption however &quot;Assume wealth values are Gaussian&quot; is a bad assumption, they're very exponential as such the median and mean are spread out.</p>
<p>But that still doesn't quite get all the way, as you noted in your question people with a lot of wealth do spend a smaller percent on real estate and that has to do with scalability of it as an asset. At some point it isn't worth buying even a sky-scrapper as an investment vehicle.</p>

CC BY-SA 4.0
2022-01-25T22:15:39.353Z
2022-01-25T22:22:24.867Z
2022-01-25T22:22:24.867Z
tjaqu787
<p>I got a semi-interesting question, I think.
Why are there big discrepancies between the average vs median net worth (USA), 746,820 vs 121,760, and the average vs median home values,  453,300 vs 404,700?</p>
<p>I get net worth stats include everyone (hence the 625,000 delta), and home owner stats only include those who can own a home (50,000 delta).</p>
<p>Excluding those without homes the ratio between homeowner net worth (median/average) versus the ratio of home value (median/average), is almost 4X different. Why is this?</p>
<p>Homeowner net worth median divided by average 255000/1100000 =.23 Home value median divided by average 404,700/453,300 = 0.89</p>
<p>Assume home values are Gaussian</p>
<p><a href="https://medium.com/datasparq-technology/gaussian-mixtures-to-model-real-estate-prices-in-the-uk-d70acb3bc9d" rel="nofollow noreferrer">https://medium.com/datasparq-technology/gaussian-mixtures-to-model-real-estate-prices-in-the-uk-d70acb3bc9d</a></p>
<p>Could it be the wealthy don’t buy homes that are represented of their net worth or that most expensive homes are capped at a range in the tens of millions dollars where as the highest net worths are capped in the billions?</p>
<p>Sources</p>
<p><a href="https://www.businessinsider.com/personal-finance/average-american-net-worth" rel="nofollow noreferrer">Homeowner and non home owner stats net worth stats</a></p>
<p><a href="https://fred.stlouisfed.org/series/ASPUS" rel="nofollow noreferrer">Home value average</a></p>
<p><a href="https://fred.stlouisfed.org/series/MSPUS" rel="nofollow noreferrer">Home value median</a></p>

CC BY-SA 4.0
2022-01-20T17:11:02.133Z
Homeowner net worth median divided by average 
255000/1100000 =.23

Home value median divided by average

404,700/453,300 = 0.89
Gnar
CC BY-SA 4.0
2022-01-20T20:09:01.090Z
@Gnar Hi, it seems you accidentally created a duplicate account. Please refer to [the help center](https://economics.stackexchange.com/help/merging-accounts) to merge your accounts and regain ownership of the question.
Andrew T.
<statistics><housing>
Discrepancies of average/median net worth versus home values in USA?
Gnar
# Discrepancies of average/median net worth versus home values in USA?

(Asked by: username_0 on 2022-01-20)

I got a semi-interesting question, I think.
Why are there big discrepancies between the average vs median net worth (USA), 746,820 vs 121,760, and the average vs median home values, 453,300 vs 404,700?

I get net worth stats include everyone (hence the 625,000 delta), and home owner stats only include those who can own a home (50,000 delta).

Excluding those without homes the ratio between homeowner net worth (median/average) versus the ratio of home value (median/average), is almost 4X different. Why is this?

Homeowner net worth median divided by average 255000/1100000 =.23 Home value median divided by average 404,700/453,300 = 0.89

Assume home values are Gaussian

<https://medium.com/datasparq-technology/gaussian-mixtures-to-model-real-estate-prices-in-the-uk-d70acb3bc9d>

Could it be the wealthy don’t buy homes that are represented of their net worth or that most expensive homes are capped at a range in the tens of millions dollars where as the highest net worths are capped in the billions?

Sources

[Homeowner and non home owner stats net worth stats](https://www.businessinsider.com/personal-finance/average-american-net-worth)

[Home value average](https://fred.stlouisfed.org/series/ASPUS)

[Home value median](https://fred.stlouisfed.org/series/MSPUS)

**Tags:** statistics, housing
> **Comments:**
> **username_0**: Homeowner net worth median divided by average  255000/1100000 =.23  Home value median divided by average  404,700/453,300 = 0.89  
> **username_1**: @Gnar Hi, it seems you accidentally created a duplicate account. Please refer to [the help center](https://economics.stackexchange.com/help/merging-accounts) to merge your accounts and regain ownership of the question.  

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## 1 answers

### Answer by username_2 on 2022-01-25. Score: 1

50% of households have assets(BOC) and peoples home usually makes up 80% of these peoples assets(BOC).

You're comparing (X|Y) to (X)

Also keep in mind some odd things: most people graduating from college have a negative net worth despite living in a house with a positive value and pensions aren't counted in net worth stats but if you own stock(you own your own company or invest) that is.

"Assume home values are Gaussian" is a pretty good assumption however "Assume wealth values are Gaussian" is a bad assumption, they're very exponential as such the median and mean are spread out.

But that still doesn't quite get all the way, as you noted in your question people with a lot of wealth do spend a smaller percent on real estate and that has to do with scalability of it as an asset. At some point it isn't worth buying even a sky-scrapper as an investment vehicle.


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