Stock market volatility hit Americans' net worth at the end of 2018, with household net worth falling $3.7 trillion, or 3.5%, in the fourth quarter, according to Federal Reserve data.
It was the worst decline on record and the worst percentage decline since the Great Recession.
During the market downturn that began in October of last year, Americans lost $4.6 trillion in equities before stocks stabilized in December. This is the first time net worth has fallen since the third quarter of 2015, when it slid 1%.
The last time Americans’ net worth saw a greater drop was the fourth quarter of 2008 when they lost 6% or $3.8 trillion of wealth.
The decline does not reflect the average household's balance sheet, since stock ownership is concentrated among the wealthy. Only 18.7% of Americans own stock directly, while about half are invested in the market through through employer-sponsored retirement accounts, according to Pew.
Americans' net worth should also recover in the first quarter of 2019, if the current stock market rally continues.