Investing June 7, 2002

Americans Getting Richer

June 7, 2002 (PLANSPONSOR.com) - US household net worth inched up over the first quarter, as stronger real-estate values cancelled out stock market losses, a report from the Federal Reserve Board shows.
Reported by

The figure, a gauge of total household assets, such as real estate and pensions, less total liabilities, such as mortgages and student loans, increased by 0.7% to $40.2 trillion, compared with $39.9 trillion in the fourth quarter of 2001.

After peaking at $41.7 trillion in 1999 boosted by stellar stock market returns, household net worth declined in both 2000 and 2001.

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According to the report, much of the gain is attributable to the hot housing market – household real estate rose by 1.7% to %12.2 trillion by the close of the quarter
Homeowners’ equity in household real estate edged up by 1.3%, to $6.7 trillion.

Meanwhile, on the other side of the balance sheet, values of corporate equities, excluding mutual funds and pension funds fell by 2.5%, to $5.7 trillion.

In addition, personal savings as a percentage of disposable personal income increased to around 3% over the quarter.

Still, household net worth as a ratio of disposable personal income, slipped to 5.2 times disposable income from 5.4 in 4Q01 and 6.3 in 1999, when rising stock prices gave personal portfolio’s a boost.

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