The latest sign of a recovering economy?American household wealth has reached a new record, a recent Fed report finds.
Buoyed by surging stocks and a restored real estate market, the nation’s wealth surpassed $77 trillion in the third quarter—an increase of 2.6% between July and September. That’s the highest household net worth has been since records first started back in 1945.
With these recent gains, Americans have almost recovered all the wealth lost during the recession, when household net worth sank to a low of just over $57 trillion in 2008. (In nominal dollars, those losses were already recouped about a year ago, but when adjusted for inflation, net worth is still about 1% below America’s pre-recession peak.)
The Fed’s report also indicated another sign of a healthy economy: Americans are now more willing to borrow money—which signals they are more confident in their jobs and in the economy as a whole.
Unfortunately, the recovery hasn’t been evenly distributed by demographic: The bulk of the gain went to the wealthier Americans who hold the majority of stocks. (Currently, just 10% of American households hold about 80% of all stocks.) Homeownership since the recession also fell among lower-income Americans, though economists predict that the housing market—which has seen rising home sales and fewer mortgage defaults—will continue to gain ground.
Still, experts warned against reading too much into the new record. Jacob Oubina, a senior economist at RBC Capital Markets, told Reuters that for now, the boost in net worth will largely be limited to those holding equities. “Americans still have a long way to go to get to full financial health,” he said.