Americans' Total Wealth Hits Record, Fed Report Says

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Rising home prices helped push Americans’ wealth to a record in the first quarter, according to the Federal Reserve’s ‘Flow of Funds’ report released Thursday. The U.S. homeownership rate is 63.7%, so an increase in home prices is likely benefiting many middle-class households. Photo: Michael Short/Bloomberg News

The wealth of Americans reached a record of $88.1 trillion in the first quarter, with rising home values offsetting stock-market wobbles at the start of the year.

The boost to wealth was driven by a $498 billion increase in residential real-estate values around the U.S., while the overall value of equities declined by $160 billion, according to a Federal Reserve report released Thursday.

The report underscores just how much American fortunes have changed since the housing bubble and stock-market crash of the last decade. U.S. households and nonprofit organizations lost more than $12 trillion during the twin housing and financial busts, and net worth fell to $55 trillion. Since then, wealth has risen by more than $33 trillion.

The figures aren’t adjusted for inflation, but with inflation generally low in recent years, wealth has rapidly outpaced inflation.

The Fed report, known as the “Flow of Funds,” tracks the aggregate balance sheet of U.S. households, to show how the components of wealth shift over time. It provides no breakdown of the distribution of these assets among households or different demographic groups.

Many assets such as stocks and bonds are disproportionately held by the wealthiest U.S. households. Homes, however, are owned broadly by middle-income households. The U.S. homeownership rate is 63.7%, so an increase in home prices is likely benefiting many middle-class households.

One key difference between the increase in asset values today versus a decade ago is that Americans aren’t taking on as much debt. Total liabilities rose only $17 billion in the first quarter, and remain lower than their level during the financial crisis.

In recent years, mortgage balances have grown slowly, while home prices have increased steadily. The total home equity that Americans have in their real estate has almost recovered to its level at the housing bubble’s peak. The total value of homeowner real estate surpassed $13 trillion in the latest report.

Josh Zumbrun at Josh.Zumbrun@wsj.com





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