Net Worth News: U.S. Household Wealth Hits a High

Net Worth News: U.S. Household Wealth Hits a High

News about the post-recession U.S. economy is rarely worth cheering about. Median income is still lower than it was in 2007; wage growth is basically stagnant.

There is, however, one bright spot among the ho-hum headlines: New government data reveals that household net worth has now officially surpassed pre-recession levels by 20%.

All told, U.S. households were worth some $81.5 trillion in the second quarter of 2014—a 10% uptick over the year-ago period, the Fed reported earlier this week.

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So what's behind the boost? One major factor has been the bull market: Investors are reaping the benefits of the run-up in stock prices. U.S. households now hold $21 trillion in stock and mutual fund shares, an almost 160% increase since 2009— although the primary beneficiaries are the wealthy, who have more money invested in the markets.

Property values, meanwhile, haven’t completely recovered, The New York Times reports. But real estate owned by households is up a hearty 27% since the bottom of the market in 2011, and mortgage debt has declined, particularly due to a decrease in home equity loans.

While household net worth is on the rise, total household debt is still barely changed from pre-recession levels. The one thing that has changed, however, is the makeup of the debt. Overall, households owe less in mortgages, but educational debt has more than doubled since 2007. In fact, student loan debt now makes up 40% of consumer debt, and is greater than what Americans owe in credit card balances or auto loans.

If you’re looking to increase your personal net worth and tackle some college debt of your own, check out this comprehensive guide to paying off student loans.

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