Rising home prices lift US wealth, even as stocks fall

WASHINGTON (AP) – Americans’ household wealth rose in the first three months of this year as home values increased, offsetting a drop in stock prices.

The Federal Reserve says U.S. household net worth increased 1 percent to $88.1 trillion in the first quarter. Americans’ stock and mutual fund portfolios shrank $160 billion, while home values jumped $498 billion. Savings in certificates of deposit and other bank accounts also rose.

The rise in real estate values likely means the wealth increase was more widely shared than in many previous quarters, because home prices are the primary source of middle-class wealth. Richer Americans rely more on financial assets.

Greater household wealth could boost consumer spending, which drives 70 percent of the U.S. economy. Americans typically spend more when they fell wealthier.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s