U.S. Total Household Net Worth Rises Above $70 Trillion

The Federal Reserve has submitted its Household Net Worth report for the first quarter of 2013 and there is good news. Total household net worth reached $70.3 trillion, up about $3 trillion from the end of 2012. Driving factors behind the gains came from the value of investments and from housing. Today's report showed that the corporate equities and mutual funds owned by households expanded $1.5 trillion, while the residential real estate values gained by some $784 billion.

The Fed also showed that domestic non-financial debt outstanding was $40.6 trillion. This was broken down as being $12.8 trillion in household debt, $12.9 trillion in non-financial business debt, and $14.9 trillion in total government debt. Domestic non-financial debt growth was up by 4.6% and was about one-quarter of a percentage point lower than in 2012.

Household debt managed to tick downward as well by 0.6% in the first quarter. Home mortgage debt was down 2.3% as consumer credit rose at an annual rate of 5.7%. Non-financial business debt was up by 5.3% as corporate bond issuance brought that figure higher, likely based upon companies capturing and locking in extremely low interest rates for the next generation.

State and local government debt was up 1.9% on an annualized basis, while federal government debt was up 10.3% on an annualized basis.

The household net worth report is the difference between the values of the total household assets and liabilities in America. What you need to know is that this was the first reading above $70 trillion seen versus any of the prior year-end reports, although the actual year-end data is too soon to predict other than us saying that house price and equity values have risen since the end of the first quarter in 2013. The pre-recession peak year-end was $66.86 trillion in 2007, but this fell a whopping 19% in one year to $54.16 trillion at the end of 2008 when the recession was in overdrive.

Six consecutive quarterly gains is impressive enough, but what is not discussed here is that much of America still lives as though it is in or close to being in a recession.

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