U.S. Household Wealth Hit Record $96.9 Trillion Last Quarter

U.S. household wealth in the third quarter rose to another record, driven by a stock-market surge and rising property values, figures from the Federal Reserve in Washington showed Thursday.

Net worth for households and non-profit groups rose by $1.7t q/q, or 1.8%, to $96.9t from a downwardly revised $95.2t, according to Fed’s financial accounts report, previously known as flow of funds survey
Value of financial assets, including stocks and pension fund holdings, increased by $1.4t to $78.9t
Household debt increased at a 3.7 percent annual rate after 3.8 percent in the second quarter
Household real-estate assets rose by $444.1b; owner’s equity as share of total real-estate holdings climbed to 58.6% from 58.3%
Key Takeaway

The gain in the value of financial assets reflects a 4 percent rise last quarter in the Standard & Poor’s 500 Index, which is hovering near a record high this month. Households also benefited as house prices climbed 6.2 percent in September from a year ago, the most since mid-2014, based on S&P CoreLogic Case-Shiller 20-city data.

The spike in net worth bodes well for the purchasing power of those Americans who own stocks and homes, which will help underpin household spending, the biggest part of the economy.

The report also showed companies had an all-time high $2.4 trillion in liquid assets, up from $2.3 trillion in the previous quarter and giving them the means to boost investment.

Other Details

Mortgage borrowing advanced at a 2.7 percent pace; other forms of consumer credit, including auto and student loans, climbed at a 4.9 percent rate
Total non-financial debt grew at a 6.2 percent annual pace, the fastest since the fourth quarter of 2015
Federal government obligations jumped an annualized 10.3 percent, the most since the final three months of 2015
State and local government debt fell at a 0.1 percent pace, the third quarterly decline, while business borrowing increased at a 5.4 percent rate
Source: Bloomberg