Solid gains in household net worth

U.S. households continued to enjoy strong gains in net worth in the first quarter of this year, according to just-released data by the Federal Reserve. Thanks mainly to gains in financial assets and rising real estate prices, net worth rose to a new high in nominal, real, and per capita terms. In the 12 months ending March, 2014, household net worth increased almost 11%, or almost $8 trillion. (For purposes of comparison, consider that the market cap of global equities rose by $9 trillion over the same period.)


Household debt has not increased at all in over 7 years. Since their recession lows, real estate valuations have increased by almost $5 trillion, while the value of financial asset holdings have increased by more than $20 trillion.


Real household net worth now stands at a new high, and is on track with its long-term average annual growth rate of just under 4%.


Gains on a per capita basis have been a little less (population has grown by a little more than 1% a year), but are still impressive. Real per capita net worth has now exceeded its 2006 high.

A few trillion here, a few trillion there, and you have the makings of some serious gains in prosperity. Since 1950, real per capita net worth has more than quadrupled.

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