September 16, 2016 11:50:17 pm
US household wealth rose at a solid pace in the April-June quarter, pushed by healthy gains in home values and stock portfolios.
The Federal Reserve said Friday that net worth climbed 1.2 percent to $89.1 trillion, led by a 2.3 percent increase in the value of Americans’ stock and mutual fund holdings to $21.2 trillion. Housing wealth increased 1.9 percent to $25.6 trillion. The value of checking and savings accounts, as well as pension entitlements, also rose.
The report also showed that Americans are willing to take on more debt, particularly mortgages, a sign they are more confident in their economic futures and that their household finances are in better shape.
Mortgage debt rose 2.5 percent during the quarter, the biggest gain in more than eight years. That points to a housing market that is increasingly returning to normal nearly a decade after the housing bubble burst. Sales of existing homes have reached healthy levels this year.
More purchases are also being made by actual homeowners and fewer by investors, who frequently pay with cash.
And even as home purchases and mortgage debt increase, steadily rising home prices are boosting the equity Americans have in their homes.
Owners’ equity rose to 57.1 percent in the second quarter, the highest level since 2006. The figure fell to as low as 36 percent during the recession.
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