US household wealth reached a fresh record in the second quarter, fueled by a steady rise in the value of real estate and Americans’ stock holdings.
Household net worth increased $2.76 trillion, or 1.7% from the prior quarter, to $163.8 trillion, a Federal Reserve report showed Thursday. The value of real estate held by households climbed about $1.75 trillion, the most in a year, while the value of equity holdings rose about $662 billion.
The S&P 500 advanced in the April-to-June period to a record on optimism about corporate earnings and prospects for Fed interest-rate cuts. Meanwhile, home values remained lofty amid limited inventory in the resale market.
Even so, persistent inflation has weighed on Americans’ assessment of their personal finances. Wage growth has cooled by several measures and savings have dwindled, leading many — especially those without substantial investments — to feel stretched.
The Fed’s report also showed that consumers and businesses increased their borrowing at a slower pace during the second quarter.
Business debt outstanding grew at a 3.8% annualized rate, while consumer non-mortgage credit increased 1.6%. Meanwhile, mortgage debt accelerated to a 3% pace. In the public sector, state and local government debt grew 6%, or an annualized $196.3 billion — the most since 2007.
Meanwhile, household liquidity, while still markedly robust, fell from a record in the prior quarter. Deposits held by households and nonprofit organizations, which includes savings and checking accounts and money market funds, eased to $18.4 trillion.
This article was provided by Bloomberg News.