Household, Nonprofit Group Wealth Rises $1.59 Trillion in Third Quarter
Household wealth in the United States accelerated in the third quarter, driven by higher financial assets and real estate values, figures from the Federal Reserve showed Dec. 8.
Key Points
• Net worth for households and nonprofit groups rose by $1.59 trillion, or 1.8%, 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% from 56.8%.
Big Picture
Stock market gains, including a 3.3% 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% annual rate last quarter after a 4.3% pace in the second quarter.
• Mortgage borrowing advanced at a 2.9% pace; other forms of consumer credit, including auto and student loans, climbed at a 7.5% rate, which was the most since 2Q 2015.
• Total nonfinancial debt grew at a 5.8% annual pace after 4.3% in the previous three-month period.
• Federal government obligations expanded 8.2%, state and local government debt advanced at a 0.8% pace, and business borrowing increased 6%.
