Aw hell yeah.
Posted on 03/08/2007 2:40:50 PM PST by Nachum
WASHINGTON - The net worth of U.S. households climbed to a record high in the final quarter of last year, boosted mostly by gains on stocks, the Federal Reserve reported Thursday.
Net worth — the difference between households' total assets, such as houses and bank accounts, and their total liabilities, such as mortgages and credit card debt, totaled $55.6 trillion in the October-to-December quarter.
That marked a 2.5 percent growth rate from the third quarter, the previous quarterly record high. Stocks gains helped fuel the increase in net worth, although real-estate gains played a role, too.
For all of last year, households' net worth rose by 7.4 percent, a slower pace than the 7.9 percent increase registered in 2005.
Household debt, meanwhile, grew by 8.6 percent in 2006, down from a 11.7 percent increase in the prior year. The Fed said this deceleration "was accounted for by much slower growth of home mortgage debt."
Home mortgage debt growth slowed to a 8.9 percent last year, compared with a 13.8 percent increase in 2005. This year's growth in home mortgage debt was the smallest increase in six years.
After a five-year boom, the housing market fell into a deep slump last year. Sales cooled. So did home prices, which had been galloping ahead, making consumers feel more wealthy and more inclined to spend.
Economists said Thursday's report suggest households' finances are holding up fairly well to any strains caused by the troubled housing market and well as some sluggishness in overall economic growth. Analysts said that's because the jobs climate remains in good shape and income growth has picked up.
"Slower growth in some of the nation's high-flying housing markets was not enough to send net worth south in the fourth quarter," said Gina Martin, economist at Wachovia. "Instead, household balance sheets continued to improve, as growth in liabilities continued to slow, while growth in assets held steady."
One risk facing the economy is that the housing slump will take an unexpected turn for the worse, a development that likely would cause consumers to clamp down. That could spell trouble for overall economic activity.
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Thank you, Nancy!
/sarc
Aw hell yeah.
Why doesn't the article state the average values per household? These data would be more valuable if the article stated, "The average household net worth is $105,000 up 5% from last year's $100,000
You mean we should add assets and liabilities to get net worth? Don't tell Willie Green.
If you listened to the media at the end of last year you would have thought the end of the world was near.
Rock on America!
We're doomed.
Another poll where I wasn't consulted. Oh, well.
All that consumer debt and the negative savings rate is sure killing us. LOL!
Buy more gold!
Not sure if it was January or February issue of Money Magazine, but check both for some very good stats on household net worth, by age category.
Good point. The article should have made the point that household net wealth in the U.S. is at an eye-popping, never-seen-in-world-history level of over $500,000 each.
That's American homes, private businesses, personal stocks, bonds, savings, checking, et al minus all debt...and the American **average** household is half a million Dollars ahead.
Nation of millionaires. 300,000,000 people strong.
If it has been growing at a compounded rate of 4% per year, it would be close to $70,000 in 2006.
"he difference between households' total assets, such as houses and bank accounts, and their total liabilities"
Did you miss the "difference" word?
I think that I should give my "Man Servant" a raise. I'm sure John Kerry will too.
"Nation of millionaires. 300,000,000 people strong."
A million dollars used to be a lot of money. It has shrunk enormously, yet people continue to use it as a benchmark of wealth. Today a millionaire is still someone who has a lot of work left to keep his head above water.
No, did you?
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