Thanks to rising home values and stock market prices, household net worth in the U.S. rose during the second quarter.
According to a report in the Wall Street Journal citing data from the Federal Reserve, the household net worth, which includes all assets including stocks and real estate minus expenses such as mortgage and credit card debt, increased by close to $2.2 trillion in the second quarter, hitting $106.929 trillion, which was a record. It was a 2.1 percent increase from the first quarter. It marked the eleventh quarter in a row in which the wealth among U.S. households increased.
The Wall Street Journal said the data came from the Federal Reserve’s Flow of Funds quarterly report which tracks wealth of all U.S. households and nonprofit organizations. According to the paper, the report showed American households are in a strong financial position as they head into the second half of this year. The data shows that household holdings in the stock market increased by $848.3 billion in the second quarter after declining during the first three months of 2018, reported the Wall Street Journal. Meanwhile, the value of households’ real estate increased by $558.9 billion in the second quarter. That reflects the jump in home values at the same time as demand for homes is high.
Joel Naroff, president of Naroff Economic Advisors, told the WSJ that rising stock prices and home prices are creating a foundation for the economy. At the same time that households are amassing more wealth from their houses and the stock market, the Fed found households have $9.561 trillion in deposits, which covers both checking and savings accounts, as well as CDs. “Households have a lot of net worth,” Steven Blitz, chief U.S. economist at TS Lombard told the WSJ. He noted that still it “hasn’t generated an increase in leveraged spending” when compared to past periods in which net worth rose at such a sharp rate, reported the WSJ.