Buoyed by the soaring stock market, the wealth of American families has risen sharply since 1995, outpacing actual income growth and pushing the "typical" family well ahead of where it was in 1989,at the end of the last economic expansion, according to a study released yesterday by the Federal Reserve.

Overall, the typical family's net worth jumped 17.6 percent from 1995 to 1998, the study found. The market's continued growth during 1999, along with a more modest rise in home values, probably means that the typical family is even better off now.

The increase was spread across a broad range of income and ethnic groups, and Fed analysts said some data suggest "that improvements in financial circumstances were shared by many people who did not own stocks."

The net worth of the typical family--the value of real estate, stocks, bonds and other assets minus outstanding debts--totaled $71,600 in 1998, up from $60,900 in 1995 and $59,700 in 1989, the study found. By typical, Fed experts said they meant the family at the median--the level at which half of all families have larger net worths and half have smaller ones.

The average net worth, pulled upward by the assets of the very wealthy, was $282,500 in 1998, up from $224,800 in 1995 and $236,900 in 1989. All figures are corrected for inflation.

The findings from the Fed's triennial Survey of Consumer Finances suggest that the "wealth effect"--people boosting spending faster than their incomes because a rise in asset values makes them feel better off--is a significant factor in the economy. Consumer spending has continued to drive the current expansion, and the Fed noted that net worth has increased much more rapidly than income.

Fed Chairman Alan Greenspan has recently pointed to the stock market's gains and suggested that the central bank is concerned that the consequent wealth effect could push consumer demand beyond the economy's capacity and trigger inflation.

The study also found that stock ownership has become much more widespread. While less than a third of families owned stock in 1989, nearly half--48.8 percent--of them did in 1998, either directly or through vehicles such as 401(k)-type retirement plans. Fed officials said they doubted the rate has ever been higher, though earlier surveys, which date back to 1963, were not exactly comparable.

Among families who owned stock, the median value of those holdings was $25,000, and stocks constituted 53.9 percent of all families' financial assets.

In fact, nonfinancial assets--houses, cars, business interests and the like--have steadily declined as a share of family assets, dipping to 59.4 percent in 1998 from 69.6 percent in 1989.

Looking at ethnic divisions, the Fed found that the median net worth of non-Hispanic whites was $94,900 in 1998. It stood at $90,500 in 1989 but slid during the early 1990s. It was $79,500 in 1992 and $81,200 in 1995.

Nonwhites and Hispanics, while starting from a much lower base, nearly doubled their median net worth to $16,400 in 1998 from $8,500 in 1989.

But not all the news in the survey was good.

It found that the net worth of families with incomes under $25,000, which had been rising since 1989, turned downward between 1995 and 1998. Families earning under $10,000 had a median net worth of $1,900 in 1989. That climbed to $4,800 in 1995 but slipped back to $3,600 in 1998.

Families earning $10,000 to $25,000 had a median net worth of $22,800 in 1989, $31,000 in 1995 and $24,800 in 1998.

A similar pattern appeared for families earning more than $100,000. Their median net worth was $542,100 in 1989, $511,400 in 1995 and $510,800 in 1998.

The average net worth for this group climbed over the period, however, reaching $1.73 million in 1998, up from $1.41 million in 1995 and $1.38 million in 1989.

That pattern, the report said, indicates "widening dispersion of net worth among this group." In other words, the very rich have been getting richer faster than the merely well-heeled.

The survey also found increasing levels of debt, though this was offset in part by faster-rising asset values. Among families who had debt, the median ratio of debt payments to family income--a measure of "debt burden"--climbed to 17.6 percent in 1998 from 15.9 percent in 1989. And families in distress--defined as those whose debt payments consume more than 40 percent of income--rose to 12.7 percent after remaining at about 10 percent from 1989 to 1995.

Mortgage debt accounted for almost three-quarters of all family debt, followed by installment loans at 12.8 percent. Credit-card balances amounted to only 3.8 percent of all family debt. But among families who had debt, 47.3 percent had credit-card balances, including 20.6 percent of those earning under $10,000 a year.

The median credit-card debt was about $1,700, largely unchanged in recent years.

Wealthier Families

The net worth* of the typical U.S. family rose 20 percent from 1989 to 1998.

Median family net worth in '98 dollars

1998 $71,600

*Includes the value of real estate, stocks, bonds and other assets minus outstanding debts

SOURCE: Federal Reserve

Families and Stocks

While less than a third of U.S. families owned stock* in 1989, nearly half did in 1998.

Percent of U.S. families owning stock

1989 31.6%

1998 48.8%

*includes direct and indirect ownership.

SOURCE: Federal Reserve