McKinsey Global Institute estimates that household wealth reached $570 trillion in 2025, a record level, while only about one-fifth of the increase came from new productive assets. The rest largely reflected higher prices for assets already owned, a gap that matters because paper gains do not automatically create more factories, infrastructure or output.
The finding comes from MGI’s global balance sheet report, published on 23 July and discussed at an MGI event on 29 September. The report is not an official global accounting exercise. It estimates a global picture from a group of economies representing about 70% of world GDP.
Higher asset prices are not the same as new investment
Wealth can rise in two broad ways. A country can build more homes, machinery, infrastructure and intellectual property. Or the market value of assets that already exist can increase.
The second route can make households and investors feel richer. It may also improve companies’ ability to raise capital. Yet a higher valuation does not by itself add productive capacity. A share price rising on expectations is different from a business buying equipment, developing a product or expanding a plant.
MGI estimates that the global balance sheet, which includes assets and liabilities across households, governments and companies, reached almost $1.8 quadrillion in 2025. Its estimate of total wealth across those sectors was $600 trillion, of which households held 95%. The researchers say the recent increase in household wealth was more heavily driven by valuation gains than by real capital formation.
Why the United States, Europe and China look different
The report says the United States has seen higher equity values and stronger productivity growth, but also high public debt and the risk that inflation or a fall in asset prices could bring valuations closer to the underlying economy. China has continued to work through falling property values while corporate and government debt have increased. Europe has had weaker demand and investment, leaving it closer to a low-growth path.
Those are MGI’s analytical scenarios, not forecasts. Economic outcomes also depend on policy, energy costs, trade conditions, technology investment and many other factors.
The report also cautions against treating its global totals as a single country-level balance sheet. Its sample covers major economies, from the United States and China to European economies, Japan, South Korea and Mexico. Assets, debts and the mix between housing and equities differ sharply across them, so a valuation problem in one market does not automatically describe another.
Our earlier coverage of global house-price movements illustrates why property valuations matter so much to household balance sheets. We also reported on how higher advanced-economy bond yields can affect borrowing costs elsewhere, another channel through which asset prices and financing conditions reach the wider economy.
Three paths back toward a closer balance
MGI describes three broad ways that high asset values and debt could become more aligned with economic output. Productivity could rise enough to support higher incomes and valuations. Inflation could erode the real value of debt and assets. Or asset prices could fall, producing a reset that may include deleveraging and defaults.
The first route is the least damaging in the report’s framing because it raises the economy’s capacity to support existing claims on future income. Inflation and market losses can also shrink a gap between paper wealth and output, but they reduce purchasing power or wealth along the way.
Record wealth does not settle the growth question
The report’s central point is not that rising wealth is automatically a problem. Asset values often rise when investors expect stronger profits or productivity. The harder question is whether those expectations are followed by the investment and income growth needed to justify them.
That question will stay relevant long after this year’s market moves. A larger balance sheet can support growth when savings are converted into productive investment. If gains remain concentrated in the repricing of existing assets, households may be wealthier on paper while the economy has less new capacity to show for it.
