The rising tide of Wall Street wealth seen in the past few years has no doubt powered the terrific real estate market we have all come to enjoy. And yet, if you're in real estate, you have to wonder if the current wealth-building process actually holds down home ownership levels and thus brokerage opportunities.

The issue is not that wealth is somehow evil -- or that great wealth is somehow more evil -- but rather that the distribution we now see leaves many people without the benefits of our booming economy.

It used to be that being a millionaire made one a member of an elite fraternity, a group at the very top of American finance and thus American society. But now we find that being a millionaire is no big thing -- CNNfn reports that 8 million of us are millionaires, in rough terms about three out of every 100 people you see on the street.

Forbes magazine tells us that in 1982 we had 13 billionaires whereas today 267 of us have personal fortunes in excess of $1 billion. The magazine also says that at least 5 million households now have a net worth of $1 million or more, and that the number households in this category should quadruple in the coming decade.

Meanwhile, on the other end of the scale, not everyone has joined the ranks of the financially well-endowed.

Edward N. Wolff, an economics professor with New York University, delivered a paper last April ("Recent Trends in Wealth Ownership") which offered a series of money facts that ought to be sobering.

"Financial wealth," says Prof. Wolff, can be defined as "net worth minus net equity in owner-occupied homes." In other words, to determine your financial wealth you add up your assets, subtract your debts, and ignore anything related to your residence.

Given this measure, Wolff found that 15.5 percent of all households had a net worth of zero or less (they owed) in 1983, a figure which rose to 18.5 percent in 1995. Despite all the talk of billions and more billions, Wolff's study shows that "median financial wealth was less than $10,000 in 1995."

The top 1 percent of all households control 47 percent of the national financial wealth, says Wolff, while the top 20 percent manage 97 percent. Alternatively, the bottom 40 percent of all households held a mere .9 percent of our financial wealth in 1983, but only about .5 percent in 1997.

"The only group to enjoy positive gains in real income over the period from 1983 to 1992 were households in the top 20 percent of the income distribution," says the professor. "Within this group, gains were greatest for the top one percent of households."

The result, says Wolff, was that "growth in the economy during the period from 1983 to 1995 was concentrated in a surprisingly small part of the population."

So what's the problem?

None really -- if you have a rental business. The current income distribution assures that we will have a permanent pool of renters as far into the future as anyone can see.

But if you assist others in the purchase and sale of residential property, then you may wonder how much more business could be generated if more people were qualified to buy homes -- in other words, if our vast national wealth trickled down a little further. Maybe entry-level purchasers wouldn't buy the biggest homes in town, but a larger number of buyers would mean more sales, more demand, and more people moving up -- qualities which everyone in brokerage should favor.

The real estate community greatly prefers the accumulation of more wealth -- that's the impact of home values which rise faster than the rate of inflation and also mortgage balances that fall year after year. Perhaps the time has come to favor with greater energy more loan programs with little down; an end to mandated minimum lot sizes; more local control of housing programs; less government and less regulation; FHA MIP fees that automatically terminate after seven or eight years with good payments; and reduced state and local transfer taxes.

The wealthy would not be poorer as a result -- they likely would not miss a single meal. Meanwhile, those who are less-than-wealthy would gain a greater stake in our expanding economy, something that on many levels would benefit us all.

The Common-Sense Mortgage

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