U.S. Household Wealth Rose $1.59 Trillion in Third Quarter

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Household wealth in the U.S. accelerated in the third quarter, driven by higher financial assets and real-estate values, figures from the Federal Reserve in Washington showed Thursday.

Key Points

  • Net worth for households and non-profit groups rose by $1.59 trillion, or 1.8 percent, to a record $90.2 trillion in July through September from the previous three months, according to Fed’s financial accounts report, previously known as flow of funds survey
  • Value of financial assets, including stocks and pension fund holdings, rose $1.16 trillion
  • Household real-estate assets climbed by $499 billion; owner’s equity as a share of total real-estate holdings increased to 57.3 percent from 56.8 percent

Big Picture

Stock market gains, including a 3.3 percent advance in the S&P 500 Index in the third quarter, and household wealth due to rising house prices, have strengthened household finances. Meanwhile, companies had a record $2.1 trillion in liquid assets, indicating businesses have plenty of wherewithal to boost outlays on capital investment, dividends and stock buybacks.

The Details

  • Household debt increased at a 4 percent annual rate last quarter after a 4.3 percent pace in the second quarter
  • Mortgage borrowing advanced at a 2.9 percent pace; other forms of consumer credit, including auto and student loans, climbed at a 7.5 percent rate, which was the most since 2Q 2015
  • Total non-financial debt grew at a 5.8 percent annual pace after 4.3 percent in the previous three-month period
  • Federal government obligations expanded 8.2 percent, state and local government debt advanced at a 0.8 percent pace, while business borrowing increased 6 percent