Stocks, Real Estate Push US Household Net Worth To $130.2T

The worth of U.S. households hit a new high at the end of 2020, hitting $130.2 trillion, The Wall Street Journal (WSJ) reported.

That happened because of the rising stock prices, real estate and other things, which canceled out the losses from the pandemic.

The number was a 5.6 percent increase from the third quarter, and up 10 percent from the end of 2019, WSJ reports.

As that’s going on, financial assets are rising steadily, particularly corporate equities and mutual-fund shares. Americans have also gotten boosts from rising real estate prices, and many have refinanced mortgages at lower interest rates, taking cash out in order to pay debt or renovate their homes.

The pandemic has seen household balance sheets remain intact as the government has intervened a few times with trillions of dollars of aid, including two previous rounds of direct payments (with a third coming), and more unemployment benefits.

The rising net worth is also a big part of the country’s new optimistic outlook on the economic recovery this year. Household spending accounts for more than two-thirds of the country’s gross domestic product. The $1.9 trillion COVID relief package, finally signed into law as of Thursday (March 11), will help the economy along faster than anything in almost 40 years, WSJ writes.

WSJ, for its part, has lifted the forecast for national growth from 4.87 percent last month to 5.95 percent.

The news of the household worth comes as the country has also faced numerous fiscal issues. A Fed report from September had the household worth as $119 trillion by the second quarter. That came as corporate equities and real estate values shot up and consumer credit shrank.

Debt was also on the rise, with nonfinancial business debt, federal government debt, state and local government debt and household debt all increasing.

The U.S. median income was already increasing prior to the pandemic, and there was a period of time between 2018 and 2019 where all races were seeing improvements in poverty rates.