The value of financial assets owned by U.S. households grew by $784.4 billion in the fourth quarter and by nearly $3.8 trillion over all of 2012. An improving housing market helped considerably. The value of real estate owned by households grew by about $450 billion in the fourth quarter and by $1.4 trillion over the year. Americans' household equity—the portion of their home values that they own, rather than their mortgage lender—rose to 46.6 percent at the end of 2012, up sharply from 40.5 percent at the end of 2011.
(More from Fiscal Times: Forget Spending Cuts, the US Economy Really Needs a $2 Trillion Stimulus)
The Federal Reserve, with its quantitative easing program, has been looking to spur consumer demand by creating just such a wealth effect.
Yet while the gains illustrated in the chart above indicate that the improvement in household balance sheets continues, the long slog back to break-even isn't as nearly strong as the "We're in the Money" headlines at sites like The Huffington Post make it seem. For one thing, we've lost years of potential wealth accumulation.
"Even when consumers recover all of their lost wealth," writes Moody's Analytics economist Scott Hoyt, "they will have gone nearly six years without any gain."
On top of that, the Fed data don't account for inflation and population growth since the end of 2007, and those factors make a big difference.
Moody's Analytics economist Scott Hoyt notes that real per capita wealth plunged 27 percent and has recovered less than half of that loss—so while gaining back the $16 trillion lost during the recession is great, household balance sheets on average remain much weaker than they had been before the recession.