The net wealth of US households rose to $57.86 trillion in the second quarter of 2007, as financial asset gains outpaced slowing increases in real estate values, the Federal Reserve said on Monday. In its quarterly "Flow of Funds" report, the Fed said US household balance sheets rose $1.206 trillion over an upwardly revised $56.65 trillion for the first quarter.
The net worth data is not adjusted for seasonal variations. Total US debt, excluding the financial sector, rose at an adjusted 7.1 percent annual rate in the second quarter to $29.88 trillion, below the upwardly revised first-quarter growth rate of 7.9 percent. The Fed attributed the deceleration in the second quarter debt accumulation rate largely to the federal government, where debt fell by 1.4 percent after rising 6.4 percent in the first quarter.
Household debt grew 7.1 percent in the second quarter, the same pace as the first quarter. Home mortgage debt growth slowed four-tenths of a percentage point to a 7.3 percent pace in the second quarter - its slowest rate since mid-1998, the Fed said. Household consumer debt grew at a 5.0 percent pace in the second quarter, just above the 4.9 percent pace in the prior three-month period.
Non-financial business debt grew at an annual pace of 10.6 percent in the second quarter, compared to 8.9 percent growth in the first quarter. The Fed report showed the value of real estate held by households rose just $189.4 billion, or 0.9 percent, to $20.998 trillion. This compares to a 1.1 percent rise in the first quarter and a 1.2 percent rise in the fourth quarter of 2006.
Meanwhile, household mutual fund assets rose $328.9 billion, or 6.9 percent, in the second quarter, to $5.13 trillion. Pension reserves held by households and non-profit groups rose by $420.2 billion, or 3.4 percent, to $12.61 trillion during the period.
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