Visual Capitalist: Visualizing The Size Of U.S. Asset Markets In 2024
Visualizing the Size of U.S. Asset Markets in 2024
Today, asset valuations remain elevated across various sectors of the U.S. economy, fueled by investor optimism as the Federal Reserve begins its monetary easing cycle.
The S&P 500 has climbed 28% year-to-date as of December 6, repeatedly setting new record highs. Similarly, corporate bonds and residential real estate markets are showing signs of stretched valuations. In several asset classes, growth rates are surpassing historical norms, reflecting a heightened risk appetite in certain areas.
This graphic shows selected U.S. assets by nominal value, based on data from the Federal Reserve
Breaking Down U.S. Assets by Size
Below, we show the size of U.S. asset markets along with their growth rates as of Q2 2024:
| Asset Type | Value Q2 2024 | Growth Q2 2023-Q2 2024 | Average Annual Growth 1998-Q2 2024 |
|---|---|---|---|
| Equities | $64.4T | 20.5% | 8.7% |
| Residential real estate | $59.8T | 6.0% | 6.4% |
| Treasury securities | $26.9T | 8.6% | 8.4% |
| Commercial real estate | $21.8T | -10.8% | |
| Investment-grade corporate bonds | $7.8T | 6.2% | 5.8% |
| High-yield and unrated corporate bonds | $1.6T | 6.6% | 7.9% |
| Farmland | $3.5T | -1.6% | 5.8% |
| Leveraged loans | $1.4T | -0.1% | 12.4% |
The U.S. equity market, with a $64.4 trillion market cap, surged 20.5% in value since Q2 2023—more than twice its average growth rate since 1998.
Like much of the past two years, big tech companies have powered the bull run, bolstered by earnings growth and a resilient U.S. economy. This has pushed the price-to-earnings (P/E) ratio of the S&P 500 higher than the 15.7 median level since 1989, suggesting that companies remain overvalued. As of Q2 2024, the S&P 500 P/E ratio reached 27.9.
When it comes to the residential property market, valuations hover near mid-2000 peaks. While nominal home price growth continues to rise, it is growing at a slower rate than the highs seen in 2022. Overall, the U.S. housing market expanded by 6% year-over-year, falling just under historical averages.
In contrast, the size of the U.S. commercial real estate market declined by 10.8%, pressured by rising office vacancy rates and slow rental growth. Moreover, capitalization rates, a key measure for analyzing the income earned by commercial properties compared to their valuations, stands significantly below historical averages, suggesting deteriorating fundamentals.
Source: https://www.visualcapitalist.com/size-of-u-s-asset-markets-in-2024/