The net wealth held by US households increased by $5.5tn in the second quarter, according to data released by the Federal Reserve. The total value of assets held by the household sector rose to $174.4tn while liabilities rose just $170bn to $20.1tn, leaving net household worth at $154.3tn.
Rising equity market prices were a key factor with corporate equity and mutual fund holdings rising $2.15tn in the quarter. Meanwhile a partial recovery in home prices, caused by a dearth of supply of homes for sale offsetting the drop in demand in response to surging mortgage rates, meant non-financial asset holdings increased $2.6tn. The value of debt securities, pension and life funds and non-corporate business all increased as well with holdings of cash, checking and time savings deposits the only component to post a decline – of $200bn.
This means that the value of financial assets held by the household sector, after initially being dragged down by a sharp drop in equities in the first quarter of 2020, stands $41.1tn above pre-pandemic levels while the amount of liabilities – primarily mortgages but with consumer credit accounting for more than a quarter – is up $3.5tn on fourth quarter 2019 levels.