The latest report from the Federal Reserve is out showing that total household net worth rose again in the second quarter of 2013. The main gains were from real estate and stocks, with a small drop in the value of fixed incomes. This appears to be a record in higher net worth but it is not necessarily translating to higher income. America's household net worth is now approaching $75 trillion.
Wednesday's Federal Reserve data showed that the net worth of $73.479 trillion in the first quarter of 2013 grew to some $74.82 trillion by the end of the second quarter. The value of financial assets rose from $61.179 trillion in the first quarter to $61.853 trillion by the end of the second quarter.
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Non-financial assets rose from $25.846 trillion up to $26.516 trillion by the second quarter. Households values of real estate holdings rose from $18.103 trillion up to $18.631 trillion. Liabilities rose only marginally, from $13.547 trillion up to $13.548 trillion.
Total assets rose from $87.026 trillion in the first quarter up to $88.369 trillion by the end of the second quarter. If you think that bond prices did not get hit by and large under rising interest rates, guess again because that part of the drop was only getting started by the end of the second quarter. The value of all credit market instruments (Treasury, muni, corporate, agency, and more) fell from $5.5358 down to $5.5057 trillion.
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The report on household corporate equities saw their values rise from $11.2508 trillion up to $11.4617 trillion. Keep in mind that stock markets have hit new all-time highs since the end of the second quarter as well.
Keep in mind that this Federal Reserve report measures household and non-profits in its calculations. It also includes domestic hedge funds, private equity funds, and personal trusts.
The question to ask is whether this is helping all the country or only a small part of it. Last week's Census Bureau data showed that median household income remains under its peak from more than a decade ago, and it is even worse if you adjust for inflation. With so much of America unable or unwilling to own real estate or equities, this report is going to paint only a portion of the picture for years and years.
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