This past Friday, the Federal Reserve released its latest figures on the housing wealth of Americans. Here are some of the findings, as reported by CBS Money Watch.
Rising home values drove a modest increase in Americans’ household wealth to a new high of $85.7 trillion in the April-June quarter.
The Federal Reserve said Friday that Americans’ stock portfolios climbed $61 billion in value, while housing wealth increased $499 billion. Total household wealth is up from $85 trillion in the first quarter.
Rising household wealth can help boost growth by making consumers feel wealthier and more likely to spend. Economists estimate that consumer spending rises 3 cents to 5 cents for every dollar increase in wealth. Household spending across a wide variety of categories drives about two-thirds of the economy
Americans also stepped up borrowing, a sign of confidence in the economy. The jump in mortgage lending reflects the fact that home sales are rising at a solid pace, and that fewer sales are being made to investors and wealthy individuals, who frequently pay cash for homes. Sales of existing homes have risen nearly 10 percent in the past year and have reached prerecession levels.
