Naked Capitalism has the article Asset Prices and Wealth Inequality.
A central finding of this new research is that portfolios differ systematically along the wealth distribution. While the portfolios of rich households are dominated by corporate and non-corporate equity, the portfolio of a typical middle-class household is highly concentrated in residential real estate and, at the same time, highly leveraged. These portfolio differences are highly persistent over time.
An important upshot of this pattern is that relative asset price movements induce major changes in the wealth distribution and can decouple trends in income and wealth inequality for extended time periods. For instance, rising asset prices can mitigate the effects that low income growth and declining savings rates have on wealth accumulation.
This was prominently the case in the four decades before the financial crisis when the middle class rapidly lost ground to the top 10% with respect to income but, by and large, maintained its wealth share thanks to substantial gains in housing wealth.
By contrast, the top 10% were the main beneficiary from the stock market boom and were relatively less affected by the drop in residential real estate prices. The consequence of substantial wealth losses at the bottom and in the middle of the distribution, coupled with wealth gains at the top, produced the largest spike in wealth inequality in postwar American history. Surging post-crisis wealth inequality might in turn have contributed to the perception of sharply rising inequality in recent years.
You may have an intuition of what has been going on in the economy, but until you read this, you may not understand the magnitude of the shift in wealth.
Before the real estate crash, I tried to explain to some people that they shouldn’t tap the growing equity in their house like it was a piggy bank. That wealth growth did not make up for the stagnant wages they were earning.
Luckily they had me to give them some help to keep their home after the crash.
If you want to read how and why this shift occurred, read Michael Hudson’s 2015 book “Killing The Host: How Financial Parasites and Debt Bondage Destroy the Global Economy”
Until this book gets a lot more readership, we may stumble along like this until our economy is completely drained by the 1%