Household, Nonprofit Group Wealth Rises $1.59 Trillion in Third Quarter
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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%.