US households now hold a record share of their net worth in stocks, with corporate equities accounting for 39.9% of household net worth, the largest share in Federal Reserve records. Owners' equity in residential real estate fell to 19.3% in the same quarter, leaving a gap of 20.6 percentage points between the two measures, according to the Fed's quarterly Financial Accounts report cited by the Kobeissi Letter. Households held $185.65 trillion in net worth over the period, of which directly and indirectly held corporate equities accounted for $74.03 trillion, while owners' equity in residential real estate, calculated by subtracting mortgage debt from home values, totaled $35.81 trillion. Equity exposure has climbed 12.6 percentage points since the third quarter of 2022, while the housing share lost 3.5 points over the same stretch, a reversal from the third quarter of 2005 when real estate exposure peaked at 24.1%, one point above equities. Market returns explain most of the shift, with the Nasdaq Composite closing at a record 27,122.09 on September 21, a gain of 16.7% for the year, and the S&P 500 finishing the same session at 7,764.70, up 13.4% in 2026, while the Case-Shiller national home price index rose just 1.5% in the year through June against 3.5% inflation. Forecasts for the rest of the year for the S&P 500 range from 7,400 to 8,100, with Bank of America holding the lowest target at 7,400, implying a decline of roughly 4.7% from Monday's close, and the next Financial Accounts release in December will show whether the third quarter widened the gap further.
Bank of America CorpBank of America is cited only for its lowest S&P 500 year-end target of 7,400, a forecast mention rather than a company-specific development.
HSBC Holdings PLC