D.C., Maryland, Virginia among areas with largest ratio of millionaire households

Rockville Maryland Photo by David Podgor via Wikimedia Commons

A new study has revealed that nearly 6.8 million U.S. households, approximately 5.5 percent of all U.S. households, had $1 million or more in investable assets by mid-2016 with Maryland topping the list with the largest ratio of millionaire households.

With a 7.55 % ratio, Maryland retained its top spot, a ranking it has maintained since 2011, according to the latest annual Phoenix Wealth & Affluent Monitor determination.

Virginia (6.64%) is listed 8th for the second year in a row since 2015, while the District of Columbia moved one place from 2015 ranking with a 6.32% ratio of millionaire households to total households by mid-2016. Washington D.C. has bounced back to its 2006 pre-recession ranking. According to experts, high rankings of the District, Maryland and Virginia represent economic vibrancy of the Washington metro area.

The study finds that the number of millionaire households in the United States has grown by more than 800,000 over the past five years and by more than 1.3 million since 2006, before the financial crisis.

Published by Phoenix Marketing International, the report says the overall wealth market is growing, yet the ratio of millionaires to total U.S. households has remained relatively flat and wealth is more concentrated and shifting geographically.

The W&AM uses a combination of sources including the Survey of Consumer Finance (SCF) as well as Nielsen-Claritas in its methodology to determine the general distribution of households by their level of investable assets.

Photographer Aziz Ahmed captured a beautiful view of Cherry Blossom with Washington Monument in the backdrop

As of the middle of 2016, around 6.8 million U.S. households, approximately 5.5 percent of all U.S. households, had $1 million or more in investable assets, representing a 4 percent one-year increase in the number of millionaire households, or nearly one-quarter of a million more households than in 2015, according to the findings.

“A strengthening economy and employment expansion has contributed to rising personal wealth in some states, while others, hit hard by the recession and their reliance on certain sectors, are losing ground or recovering more slowly,” according to the findings.

The states with the greatest gains in the rankings are Utah (#17), Michigan (#29), Arizona (#30) and Ohio (#31), each of which rose five places from 2015.

The biggest decline in the ranking was New Mexico, which dropped 11 places, continuing a three-year decline in ranking from #27 in 2013 to #43 in 2016, reflecting the impact of a depressed oil and gas industry on the state’s economy. South Dakota and Vermont both dropped seven places to #33 and #19, respectively, while Maine dropped six places to #35.

Here are some other key findings released to the media:

Over the past five-year and 10-year periods, the ratio of millionaire households to total U.S. households has remained relatively flat, up from 4.8 percent in 2006 and 5.1 percent in 2011.

Households with at least $1 million in investable assets hold approximately $20 trillion in total liquid wealth, or approximately 59 percent of total liquid wealth in the U.S.

Photo “
The Old Town district of Alexandria, Virginia as seen from the observation deck of the George Washington Masonic National Memorial. Photo by Ben Schumin on March 8, 2003.
Used via Wikimedia Commons

Within the wealth segment, the greatest asset growth was among households with between $1 million and $10 million in investable assets.

Their investable assets grew by $809 billion, to a total of $17.8 trillion.

By comparison, there are 16.4 million households in the broad affluent market (with between $250,000 and $1 million in investable assets).

They control $8.5 trillion in investable assets, or 35 percent of total liquid wealth in the U.S.; however, they lost $56 billion collectively between 2015 and 2016. The vast majority of these losses ($54 billion) were among the lower mass affluent segment (households with $250,000 to $500,000).

The 14 million near-affluent households in the U.S. (with between $100,000 and $250,000), saw investable assets decline by $79 billion between 2015 and 2016, to $2.6 trillion.

The concentration of wealth in the U.S. continues to deepen as the top 1 percent of wealthiest U.S. households now holds 24 percent of liquid wealth. Non-affluent households, representing 70 percent of U.S. households, control less than 10 percent of the nation’s liquid wealth.

“Our research reveals stark geographic, demographic and economic differences within the broad wealth and affluent market, reinforcing the need for more precise segmentation and targeted, relevant messaging,” said David Thompson, Managing Director, Affluent Practice, at Phoenix Marketing International. “The trends we’ve seen over the past 10 years show a deeper and wider wealth divide as families in the near- and emerging affluent segments fall further behind financially.

Approximately 70 percent of the wealth and affluent market is comprised of Americans age 52 or older who have at least $100,000 in investable assets. Baby Boomers account for more than half (55%) of the market while the Silent Generation represents 15 percent.

Approximately 13 percent of the wealth and affluent market now is composed of the Millennial generation, who are age 36 or younger. They are gaining on the members of Generation X, which make up the remaining 17 percent of the market, and who are faced with financial challenges of aging parents and education costs for their children.

Here is the top ten list including nine states and the District:

Maryland (7.55%) – remained #1, where it has been since 2011
Connecticut (7.4%) – remained #2, unchanged in 2016
New Jersey (7.39%) – moved up one place in 2016
Hawaii (7.35%) – declined one place in 2016
Alaska (7.15%) – unchanged from 2015
Massachusetts (6.98%) – unchanged from 2015
New Hampshire (6.82%) – unchanged from 2015
Virginia (6.64%) – unchanged from 2015
District of Columbia (6.32%) – up one place from 2015
Delaware (6.28%) – down one place in 2016