[March 07, 2014]WASHINGTON (Reuters) — U.S. household
net worth jumped to a new high at the end of last year, as the value
of real estate and share holdings rose and bank accounts swelled.
The Federal Reserve said on Thursday net worth increased 3.8 percent
to $80.66 trillion in the fourth quarter, eclipsing a previous
record high.
The value of households' property, consumer goods, bank deposits and
stocks all increased in the quarter, with share portfolios jumping
10.5 percent and real estate up 2.1 percent.
The Fed said household net worth rose 14 percent in the full year,
driven by a $5.6 trillion rise in the value of shares and a $2.3
trillion increase in the value of real estate.
The value of share portfolios almost doubled since 2009 to $13.86
billion at the end of 2013, and the 34 percent rise last year was
more than twice as big as the gain notched in 2012. Real estate
holdings rose 11.6 percent in 2013.
The U.S. central bank has used ultra-loose monetary policy to
encourage a recovery in the nation's housing market following a
severe 2007-2009 recession, which has also helped drive U.S. stocks
to record highs.
The Standard & Poor's 500 Index <.SPX> hit a record high on Tuesday
as investors shrugged off the impact of severe weather across much
of the U.S., suggesting further strong gains in net wealth ahead.
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.
Still, the figures showed growth in household debt slowed to an
annual rate of 0.4 percent in the fourth quarter, from 3.0 percent
previously, as home mortgage debt fell. Net debt hit $13.11
trillion.
Companies also resisted piling into new loans, with business debt
rising 7.1 percent in the quarter, a slowdown from the previous
period.
Businesses were cashed-up as never before, with $1.98 trillion in
liquid assets on hand in the fourth quarter, up from $1.91 trillion
in the third quarter, the data showed.
(Reporting by Krista Hughes; editing by
Paul Simao and Meredith Mazzilli)
