- Surging stock prices and home prices push household wealth to record…
- Stimulus checks boost spending power of Americans…
- Household debt rises as mortgage activity booms…
U.S. household wealth hit a record high in the first quarter as stock prices and home prices surge.
The Federal Reserve’s quarterly Financial Accounts of the United States report shows the worth of all households was $136.9 trillion at the end of April.
That was up $5 trillion from the fourth quarter of 2020.
The increase comes as higher stock prices added $3.2 trillion to household assets, while real estate values rose by $1 trillion.
The balance of cash, checking accounts, and savings deposits also hit a record-high $14.5 trillion in the quarter as more stimulus checks were sent out in December and March.
That was an increase of about $850 billion from Q4.
The data supports expectations for a strong rebound in spending this summer as Americans now have more spending power than before the pandemic.
The Fed’s report also showed total household debt rose 6.5% year-over-year in the first quarter, up from the 6.2% annualized rate in the fourth quarter.
That was led by an increase in mortgage borrowing as the U.S. housing market continues to boom.
Total mortgage debt jumped at an annualized rate of 5.4% in the quarter while consumer credit rose just 3.0%.
The Fed data also detailed business activity in the quarter with non-financial business borrowing up 4.4% annually vs 1.1% at the end of December.
Federal government borrowing rose 6.5% year-over-year, down from an annualized rate of 10.9% in Q4 2020.
State and local government debt rose 3.8% annually compared to 1.6% in Q4.
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