The net wealth of U.S. households rose in the third quarter to its highest since late 2007, providing a hopeful sign for future consumer spending.
Net financial wealth grew $1.72 trillion to $64.77 trillion, the Federal Reserve said Thursday.
That left household wealth $1.2 trillion short of where it stood in the fourth quarter of 2007, just as the economy was sinking into a severe recession . Wealth peaked at $67.3 trillion in the third quarter of that year.
Rising home prices helped drive the increase in the latest quarter. The value of real estate owned by households rose about $300 billion, the Fed said. Stock holdings climbed by about $520 billion.
Increases in wealth could make consumers feel more comfortable spending their money. Many economists think consumers spend a few cents of every dollar they gain in wealth.
The data, part of the Fed's quarterly Flow of Funds report, also showed Americans continued their 4-year-old effort to shed debt.
Households cut debt at a 2 percent annual rate in the third quarter, the steepest drop since the second quarter of 2011.