Household wealth rises $1.3 trillion on home prices
U.S. household net worth was lifted in the second quarter by higher home prices and an increase in the value of stocks and mutual funds, the Federal Reserve said Wednesday, in a hopeful sign for the nation's economy.
Net worth gained $1.3 trillion to $74.8 trillion between April and June, with the value of residential real estate mounting by $525 billion and corporate equities and mutual funds up by around $300 billion over the period, the Fed said.
The central bank has aggressively used ultra-easy monetary policy to foster a recovery in the nation's housing market after a severe 2007-2009 recession, which has also helped propel U.S. stocks to record highs.
Increases in housing wealth make it easier for families to borrow against the equity in their homes, while overall wealth gains make consumers feel generally more comfortable spending their money. Many economists think consumers spend a few cents of every dollar they gain in wealth.
Household debt, in a possible sign that deleveraging has come to a halt, was up by an annualized 0.2 percent in the second quarter, to $12.97 trillion. That number has stabilized in a narrow range over the past several quarters.