- US household net worth climbed by $2.76T in 2Q24, reaching a record $163.8T, with real estate contributing $1.75T.
- Stock market gains added $662B to household wealth, driven by optimism around corporate earnings and Fed rate cut prospects.
- While wealth rose, inflation and slower wage growth have strained finances for households without substantial investments.
U.S. household wealth surged to an all-time high in Q2, with net worth spiking up by $2.76T, according to a Federal Reserve report.
As reported by Bloomberg, the rise was fueled by serious gains in real estate values and stock market growth, even as inflation and dwindling savings placed financial pressure on many Americans.
Record-Breaking Quarter
Specifically, U.S. household net worth grew by 1.7%, reaching a new high of $163.8T. These gains were largely thanks to the rising value of real estate, which added $1.75T (the highest increase in a year).
Equity holdings also made a significant contribution, up by $662B, as the stock market rallied on corporate earnings optimism and the potential for Federal Reserve interest rate cuts very soon.
Slowing Wage Growth
Despite the rise in net worth, many Americans without substantial investments still felt the pressure of persistent inflation, slowing wage growth, and dwindling savings.
The report also showed that both consumer and business debt increased at a slower pace.
Business debt rose at an annualized rate of 3.8%, while consumer non-mortgage credit grew by 1.6%. Mortgage debt, however, accelerated to a 3% pace.
State and local government debt also saw notable growth of 6%—the highest rate since 2007.
Lower Liquidity
Although household liquidity remained robust, deposits in savings and checking accounts, as well as money market funds, fell to $18.4T, down from the record high reached in Q1.
Despite the drop, liquidity levels are still considerably strong by historical standards.
In summary, while U.S. household wealth is at an all-time high, the benefits so far have been uneven, with inflation and slower wage growth continuing to negatively impact many American households.
