Chicago • Americans’ wealth rose sharply in the January-March quarter, boosted mainly by the best quarterly gain in stock prices since 1998 and partly by the first rise in home values since 2006.
Household net worth rose 4.7 percent to $62.9 trillion last quarter, according to a Federal Reserve report released Thursday. The main reason was a 12 percent jump in the Standard & Poor’s 500 index, which padded the portfolios of Americans who own stocks.
Home values increased 2.3 percent.
But since March ended, the progress Americans have made to recover the wealth they lost in the Great Recession has hit another bump. Stocks sank 6 percent in May amid rising fears about Europe’s debt crisis and a weakening U.S. economy. And there’s scant evidence of a sustained housing market recovery despite the uptick in home values.
Household wealth, or net worth, reflects the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards. It bottomed during the recession at roughly $49 trillion in the first quarter of 2009. It’s still about 5 percent below its pre-recession peak of $66 trillion.
The Fed report also found that:
• Americans’ borrowing rose at an annual rate of 5.8 percent. It was the first time consumers have boosted their borrowing by at least 5 percent in two straight quarters since mid-2008, just before the financial crisis.
• Household debt dipped 0.4 percent last quarter. Americans have been steadily shrinking their debt loads for the past four years.
• Home mortgage debt, which has been declining since 2008, fell an additional 2.9 percent. But the drop can be deceiving. Mortgage debt is falling mainly because many Americans have defaulted on payments and lost homes to foreclosure — not just because people are paying off loans.
Copyright 2013 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.