FILE PHOTO: Grocery store in Washington
(Reuters) -U.S. household wealth rose to a record of roughly $156.2 trillion at the end of 2023 thanks to a surging stock market that offset a drop in property market values, the Federal Reserve said on Thursday.
Household net worth rose about 3.2% in the period from October through December from $151.4 trillion at the end of the third quarter, the Fed said in its quarterly snapshot of the balance sheets of households and businesses.
The value of equities held directly or indirectly through mutual funds, life insurance policies or retirement accounts rose by $4.7 trillion to $47.6 trillion from $42.9 trillion, the Fed said. In the fourth quarter of 2023, the benchmark Standard & Poor’s 500 Index delivered a total return, including reinvested dividends, of 11.7% and market gains have continued into the start of 2024 with stocks closing out February at record highs.
The stock market gains offset real estate values that declined by $0.6 trillion to about $49 trillion after rising in the two previous quarters.
Meanwhile, households cottoned onto the higher interest rates offered on savings and certificates of deposit accounts and money market mutual funds. Total “deposit” account balances rose by nearly $270 billion to $18 trillion and snapped a record long six-quarter streak of declines.
Still, deposits as a share of overall household net worth fell to 11.5% – the lowest in four years – as stocks’ share rose above 30%.
(Reporting By Dan Burns; Editing by Chizu Nomiyama)
About the Author
