Rising home prices lifts US household wealth

by 21 Sep 2015
By Christopher S. Rugaber

WASHINGTON _ Rising home values drove a modest increase in Americans' household wealth to a new high of $85.7 trillion in the April-June quarter.

The Federal Reserve says Americans' stock portfolios climbed $61 billion in value, while housing wealth increased $499 billion.
Americans also stepped up borrowing, a sign of confidence in the economy.

Total mortgage debt grew at the fastest level since the recession ended in 2009. Overall household debt, which includes mortgages, student loans, auto loans and credit card debt, increased at the fastest pace in a year.

The Fed's figures aren't adjusted for population growth or inflation. Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit cards and other debts.

The snapshot comes on the heels of new home sales numbers, which jumped 21.2 per cent through the first half of 2015. The climb was backed by relatively low mortgage rates and solid job growth over the past two years.

Employers added 3.1 million jobs last year and are on pace to add 2.5 million jobs this year. Meanwhile, unemployment has fallen to a seven-year low of 5.1 per cent.

Those factors have helped Americans feel more confident about their economic prospects, causing them to return to the housing market that initially sparked the Great Recession in late 2007. But supplies of new and previously occupied homes have been tight, pushing up prices and limiting choices for would-be buyers.
 
THE ASSOCIATED PRESS

COMMENTS

Poll

Is TILA-RESPA a good or bad thing long term?