US Household Wealth at All-Time High
Commentary Even as a global pandemic is raging, American households, as a group, are the richest th..
Even as a global pandemic is raging, American households, as a group, are the richest they have ever been—driven by increases in value in real estate and other non-financial assets, and despite a 7.5 percent decline in the value of financial assets since December 2019, according to Federal Reserve data.
In addition to tracking the wealth of businesses and governments, the Federal Reserve also tracks “households.”
Households non-financial assets—mostly real estate, but also some other assets—have increased in value to $40.89 trillion in June from $39.93 trillion in December 2019. On the other hand, the value of households “financial assets” fell to $223.4 billion ($0.22 trillion) from $241.4 billion ($0.24 trillion) during the same period.
For readers of this commentary, this increase in households real estate values wont come to a surprise. We have written extensively and frequently about quickly rising housing prices in Southern California, noting the effects of the combination of housing supply being constrained by tenant and mortgage protection programs as well as by lack of normal job mobility (a major contributor to housing mobility), demand from people moving out of higher-density areas they may think are more susceptible to public health risks, and demand from families seeking more room to work, study, and play at home.
Furthermore, home ownership rates are increasing. According to the U.S. Census Bureau, 67.9 percent of households owned their own home in June, substantially higher than the 64.1 percent rate of the second quarter of 2019 and also the 65.1 percent rate seen at the end of last year.
So homeownership rates are increasing and home prices are going up.
And even though the value of the financial assets generally Read More – Source