AgentIndustry News

Fed report: US household wealth hits record high in 2Q

Mortgage debt grows at fastest rate since end of recession, indicating consumer confidence in taking on some debt
  • The net worth of American households hit a new record high in the second quarter and total mortgage debt grew at its fastest level since the recession ended.
  • Rising household wealth can make consumers feel more financially secure and increase their willingness to spend, and during the second quarter more consumers were willing to take on mortgage debt.
  • The value of household real estate also increased to $21.5 trillion in the second quarter, but is still $1 trillion below the peak seen in early 2006.

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In all of the hubbub surrounding the Federal Reserve’s announcement last week that it will put off an interest rate hike until the end of the year, many overlooked an important Fed finding: that the net worth of American households hit a new record high in the second quarter and total mortgage debt grew at its fastest level since the recession ended. U.S. household net worth, which the Fed calculates as the difference between assets such as homes and stocks, and mortgages, credit cards and other debts, rose to $85.7 trillion during the second quarter, the Fed reported during its Open Market Committee meeting last week. Rising household wealth can make consumers feel more financially secure and increase their willingness to spend, and during the second quarter more consumers were willing to take on mortgage debt, the Fed said. Mortgage debt grew 2.2 percent at an annual rate, its fastest rate since 2009. “Mortgage debt has declined by $1.26 trillion from the peak. S...