Thursday, March 12, 2015

Household Net Worth Rose by $1.5 Trillion

Household net worth increased by $1.52 trillion during the fourth quarter of 2014, a 1.9% increase over the third quarter and the largest increase since 2013. The gain was driven by strong market gains. The S&P 500 rose 4.4% during the quarter, contributing to a $752 billion gain in equities. Real estate also experienced dramatic growth with values increasing by $352 billion.

Domestic nonfinancial debt was $41.4 trillion, a 4.7% increase for the year. Household debt increased to $13.5 trillion (2.9%), as consumer credit grew 6%. Mortgage borrowing rose for the second quarter in a row, growing at an annual rate of 0.7%.

Business debt rose at a 7.2% annual rate, largely due to an increase in corporate bonds. The household savings rate remained at 5.0% for the quarter, but 6 basis points higher on the year.

Federal government debt rose 5.4% on the year, while state and local government debt declined by a half percent.

Read the Federal Reserve release.

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