- Rising real estate values drive gain as stocks little changed
- Mortgage borrowing climbs for fourth consecutive quarter
Household wealth in the U.S. increased in the first quarter as rising real-estate values propped up Americans’ finances, figures from the Federal Reserve in Washington showed Thursday.
- Net worth for households and non-profit groups rose by $837.4 billion, or 1 percent, to $88.1 trillion in January through March from the previous three months, according to the Fed’s financial accounts report, previously known as the flow of funds survey
- Value of financial assets, including stocks and pension fund holdings, increased by $299.5 billion
- Household real-estate assets climbed by $477.5 billion; owner’s equity as a share of total real-estate holdings increased to 57.8 percent from 56.9 percent
With the Standard & Poor’s 500 Index up just 0.8 percent in the first quarter, household wealth was mostly supported by steadily increasing real-estate values as housing continues to recover from the financial crisis. However, a re-acceleration in job growth that also brings a significant pickup in wages will be needed to strengthen balance sheets further, especially for those without access to assets like stocks and homes.
- Household debt increased at a 2.7 percent annual rate in first quarter
- Mortgage borrowing rose at a 1.6 percent pace, the fourth consecutive gain; other forms of consumer credit, including auto and student loans, climbed at a 6.1 percent rate
- Total non-financial debt rose at a 4.8 percent annual pace
- Federal government obligations increased 4.6 percent, state and local government debt advanced at a 2.2 percent pace, business borrowing rose 7.9 percent