Household Net Worth Exceeds $100 Trillion – Domestic Economy

Posted on Posted in Finance

Every quarter the Federal Reserve releases its flow of funds survey, a report measuring the net worth of households. The report includes a “balance sheet” of assets such as real estate, financial assets, bank accounts, as well as outstanding debt. The net worth of U.S. households and nonprofit organizations rose in the first quarter of 2018 to $100.7 trillion, making it the highest on record. Rising home prices in addition to an increase in the equity markets has helped propel household net worth.

Real estate makes up the single largest component of household wealth, representing about 30%. Corporate equities (individual stocks) make up another 15% of net worth. The components making up household wealth fluctuate in value and are affected by different factors, including monetary and fiscal policy. All in all, a rise in the overall value of these
assets is of benefit to economic well-being. Some economists that follow consumer behavior believe that increases in wealth could make consumers feel more comfortable spending their money, thus contributing to economic growth. (Source: Federal Reserve)