U.S. Consumers Continue to Shed Debt While Household Wealth Stabilizes

 

• U.S. household net worth rose by US$2 trillion to reach US$ 53.14 trillion in Q2 2009, the first increase in net worth after seven consecutive quarters of decline. However, as of Q2 2009, household net worth remains depressed by 12.28% y/y. The increase was largely driven by financial assets, with the net worth related to corporate equities rising US$1.12 trillion. With home prices showing signs of moderation during Q2 2009, the value of real-estate related household assets rose by US$323.4 billion after declining steadily since Q1 2007. The value of homeowners’ equity as a share of real estate assets rose to 43% in Q2 2009, from the record low of 41.8% in Q1 2009. (Federal Reserve Board)

• Households continued to shed debt at a faster rate as total household debt declined by 1.7% in Q2 2009 after declining 1.1% in Q1 2009. Household mortgage debt fell by 1.4% in Q2 2009 after falling 0.1% in Q1 2009. The decline was the sharpest in consumer credit, which fell by 6.5% in Q2 2009, after falling 3.7% in Q1 2009. (Federal Reserve Board)