Fed Says Total U.S. Household Net Worth Rose in 2Q -- Update
September 21 2017 - 5:48PM
Dow Jones News
By Eric Morath
The total net worth of U.S. households pushed further into
record territory, propped up by improving home values and stock
prices.
The net worth of U.S. households and nonprofits, defined as the
total of all assets minus all liabilities, rose by $1.7 trillion in
the second quarter of 2017 to $96.2 trillion, according to a report
Thursday from the Federal Reserve.
The increase was smaller than the $2.3 trillion advance in the
first three months of the year, but marked the seventh straight
quarter overall wealth rose in the U.S.
Meanwhile, total household liabilities rose by a modest $146
billion to $15.2 trillion. Household liabilities relative to net
worth is at the lowest share since 2000, RBC Capital economist Tom
Porcelli said.
"The healthy state of the U.S. household balance sheet continues
to be one of the key themes underpinning our broad economic view
that the current expansion is far from over," he said.
Household wealth in the stock market climbed by $1.1 trillion in
the second quarter. While a slightly smaller increase than in the
first quarter, the improvement still reflected a steady upward
trend in equities prices supported by solid business and consumer
confidence and broad economic growth around the globe.
The value of real estate rose by $564 billion last quarter, a
better gain than the prior quarter, showing that home prices are
rising at time when demand for housing is high and unemployment is
low.
"Nationwide, we're seeing an increase in home values due to
chronically low inventory of homes for sale," said Cheryl Young,
economist at real estate website Trulia. "Homeowners generally
should feel pretty good and that might have some spillover effects
in terms of consumer spending."
But Ms. Young said that just more than a third of all homes have
recovered their prerecession peak values, so in many cases
homeowners may still feel as if they've lost equity.
Thursday's report showed owners' equity in real estate, or
values less debt owed on mortgages, was up about 3% to $1.4
trillion in the second quarter.
During the 2007-09 recession, when the housing market and stock
market both fell, households lost nearly $12 trillion in wealth.
But net worth fully recovered by the second half of 2012, and has
risen most quarters since.
The figures are from a quarterly Fed report, known as the Flow
of Funds, which tracks the aggregate wealth of all U.S. households
and nonprofit organizations. The report provides no details of how
that wealth is distributed between households. The figures aren't
adjusted for inflation.
Write to Eric Morath at eric.morath@wsj.com
(END) Dow Jones Newswires
September 21, 2017 17:33 ET (21:33 GMT)
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