Rising Equities, Increasing Home Values Help Contribute To Rising Net Worth

According to the Federal Reserve, the total net worth of US households rose to a record $84.9 trillion in the first quarter of 2015, up $1.6 trillion from the quarter before.

This rise in net worth was helped largely by two factors - increased home values and rising stock and mutual fund portfolio values. According to the Federal Reserve, the value of US homes increased by $411 billion in Q1/2015, while the value of the country's financial holdings increased by $1.1 trillion.

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The country suffered greatly during the "Great Recession" and saw its total net worth plummet.

In 2009, the total net worth of US households was $59.0399 trillion as the major market indexes crashed at the same time that the nation's real estate market did. Many retirement plans had to be altered as American households had to deal with a triple whammy of depressed home values, a plummeting stock market and a challenging job market.

In 2010, things started to improve, as the nation's households finished the year with a total net worth of $63.4851 trillion. As equities rose throughout 2011, 2012, 2013 and 2014, so did the net worths of US households, and the country is now technically richer than it has ever been.

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The continued rise in household net worth brings about several interesting questions, including:

1) Will US households be more willing to spend in the months and years ahead?

2) How will US households look to invest their money if stock market returns stagnate over the near term?

3) What will be the impact of higher interest rates on the borrowing, investing and spending habits of US households?

Source: Yahoo.com - US Household Net Worth Increases To $84.9 Trillion

Filed under: General Knowledge