Rising prices for stocks and homes pushed the net wealth of US households to a record high in the first quarter, providing a hopeful sign for future consumer spending. Net financial wealth grew $3 trillion to $70.3 trillion, the Federal Reserve said on Thursday. It was the biggest quarterly increase since the fourth quarter of 1999.
Stock holdings climbed by about $1.5 trillion, while the value of real estate owned by households rose about $784 billion. Increases in housing wealth make it easier for families to borrow against the equity in their homes, while overall wealth gains make consumers feel generally more comfortable spending their money. Many economists think consumers spend a few cents of every dollar they gain in wealth.
The data, part of the Fed's quarterly report on financial accounts in the United States, also showed Americans continued to shed debt in the wake of the 2007-09 recession and financial crisis. Households cut debt at a 0.6 percent annual rate in the first quarter. Household debt fell $19 billion to $12.8 trillion.