Lower stocks are blamed.
The US household net worth fell 1.23 trillion in the 3rd quarter. The decline was attributed to a slump in stock prices. However, the report is quick to add that the stock prices have since recovered.
The decline was a 1.4% fall from the previous 3 months to 85.2 trillion.
Equity prices were down as concerns increased about the global economy. This negated a positive effect from higher home prices. As a value of assets declined so too did the pace of borrowing. Household debt rose by 1.5% annualized - the slowest pace in 2 years. The declines in debt were centered in the mortgage loan area. Loans for cars and student loans jumped by 7.2% and 8.5% respectively. The strong auto sales numbers over the last few months support that increase.
Financial assets decreased by 1.7 trillion. The S&P index fell by 6.9% in the 3rd quarter.
Real estate assets climbed by 443 billion. Owner equity as a share of total household real estate holdings increase to 56.7% last quarter from 56.1% in the previous 3 months.
