Household net worth continued to increase in the third quarter, hitting a fresh all-time high as the upward trend in stocks boosted Americans’ wealth and offset a pullback in savings.
Household net worth increased by $3.8 trillion, or 3.2%, to $123.5 trillion in the July to September period, according to a Federal Reserve report out Thursday. Meanwhile, household debt increased at an annual rate of 5.6%, driven by the biggest quarterly increase in mortgage debt since 2007, according to data compiled by Bloomberg.
The U.S. economy has largely recovered faster than many analysts had expected, but that recovery has been uneven. Record-low mortgage rates have spurred a surge in demand in the housing market and the S&P 500 recovered to pre-pandemic levels quickly before surging to fresh highs. At the same time, unemployment remains elevated.
The report showed the value of equities rose by $2.8 trillion while the value of real estate held by households increased about $430 billion. Mortgage debt grew at an annual rate of 5.6%, reflecting the boom in the housing originations.
Business debt decreased by more than $38 billion from the prior quarter, or at an 0.9% annualized rate, in the July-September period to a total outstanding $17.5 trillion. It marked the first decline since the end of 2010. Federal debt outstanding rose about $511 billion, or an annualized 9.1%, to almost $23 trillion.
Consumer credit not including mortgage debt rose by almost $20 billion in the third quarter after declining in the previous three-month period for the first time since 2015.
This article was provided by Bloomberg News.