U.S. Household Wealth Rose $2.04 Trillion in Fourth Quarter

Household wealth in the U.S. continued to increase in the fourth quarter as financial assets and real-estate values appreciated, figures from the Federal Reserve’s financial accounts reports, previously known as the Flow of Funds, showed Thursday.

Key Points

  • Net worth for households and non-profit groups rose by $2.04 trillion, or 2.3 percent, to a record $92.81 trillion from the prior three months
  • Value of financial assets, including stocks and pension-fund holdings, rose $1.59 trillion
  • Household real-estate assets climbed by $499.1 billion; owner’s equity as a share of total real-estate holdings increased to 57.8 percent from 57.1 percent 

Big Picture

Household finances are the strongest they’ve been in years, helped by a surge in the stock market, including a 3.3 percent advance in the S&P 500 last quarter, and rising house prices. At the same time, household debt continued to grow at a pace similar to the prior quarter. The report showed companies had $2.08 trillion in liquid assets, which signals they have the means to spend more on capital equipment, raise dividends and boost stock buybacks.

The Details

  • Household debt increased at a 3.8 percent annual rate last quarter after a 3.9 percent pace in the third quarter
  • Mortgage borrowing advanced at a 3.1 percent pace; other forms of consumer credit, including motor vehicle and student loans, climbed at a 6.2 percent rate
  • Total non-financial debt grew at a 2.9 percent annual pace after a 5.8 percent rate in the previous three-month period
  • Federal government obligations expanded 2.9 percent, state and local government debt rose at a 0.2 percent pace, while business borrowing increased 2.6 percent