Household Worth in U.S. Rose by $837.4 Billion in First Quarterby
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