UPDATE 1-U.S. household wealth increases by $1.3 trillion in 2nd qtr
(Adds details on household debt)
WASHINGTON, Sept 25 (Reuters) - 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 on 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 U.S. central bank has aggressively used ultra-easy monetary policy to foster a recovery in the nation's housing market following 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.
Furthermore, in a possible sign that deleveraging has come to a halt, household debt rose by an annualized 0.2 percent in the second quarter, to $12.97 trillion.
That number has stabilized over the last several quarters, signaling that aggressive steps to pay down debt by households in the aftermath of the recession may have petered out.
The deleveraging had been a headwind for the economy, and a decisive change in borrowing could indicate a lasting improvement in household confidence in the outlook for the U.S. economy, which in turn should spur more spending, investment and hiring.
(Reporting by Alister Bull; Editing by Andrea Ricci)