The latest data from the Federal Reserve and the Empower Personal Dashboard^TM paints a nuanced picture of American household wealth in 2025. While Americans are modestly wealthier, growing economic anxiety seems to be outpacing those gains.

The first wealth drop in over a year

According to the Federal Reserve’s Q1 2025 Financial Accounts of the United States report, total household net worth fell to $169.30 trillion, down from $170.90 trillion the previous quarter.¹ This was the first quarterly drop since Q3 2023, driven primarily by:

• A $2.30 trillion decline in the value of equity holdings.²
• A $200 billion fall in real estate values, marking the third consecutive quarterly decline.³
• An overarching market reaction to proposed tariffs, stoking inflation fears and triggering a $2.50 trillion market pullback in the S&P 1500 index.⁴

This drop was enough to rattle confidence despite the fact that by mid-Q2 2025, markets had rebounded on hopes of a revised U.S.–China trade deal and lower-than-expected tariff rates. However, Federal Reserve's Economic Well-Being of U.S. Households in 2024 report finds that 73% of Americans are either doing okay or living comfortably financially, similar to recent years but lower than a high of 78% in 2021.⁵

Wealth by the numbers

Q1 2025 delivered mixed financial signals to American households but within the turbulence lies a quiet strength. Empower Personal Dashboard^TM data shows that while markets retreated during Q1 2025, household finances proved relatively resilient, with many Americans preserving their financial momentum in key areas. Here’s what Empower’s data shows:

• Average 401(k) balances rose by 1.1% quarter-over-quarter, hitting $302,558.
• At $481,435, average retirement savings edged up by 0.5% in Q1 2025 compared to Q4 2024, reflecting continued long-term discipline despite short-term volatility.
• Average net worth ticked up slightly to $627,875, a 0.5% increase compared to Q4 2024.

Debt grows more slowly but still grows

The Fed reported that total domestic nonfinancial debt grew at an annualized rate of 2.8% in Q1, significantly slower than the 4.7% pace from a year ago.⁶ Here’s why that matters:

• Private business debt rose by 4.8%, as firms issued more bonds and debt securities.⁷
• Household debt grew cautiously by 1.9%, signaling potential consumer restraint amid economic uncertainty.⁸

This cautious borrowing aligns with the drop in net worth and may reflect both credit tightening and consumer unease.

What it all means for American households

After reaching new highs, household wealth is now facing market headwinds and real estate softness. 

Note: Empower Personal Dashboard^TM data was last accessed on June 5, 2025, and an analysis of the averages reflect the total number of users that existed at the end of each month for Q4 2024 and Q1 2025.