The stock and housing markets helped Americans get richer in the first quarter of 2012.
June 8, 2012- Stock gains and an increase in the value of homes during the first quarter, helped to increase the net worth of Americans during the first quarter of 2012. However, in May stocks started to drop on European debt fears and the U.S. economy. That helped to eat into nearly all the gains in personal wealth from the first quarter.
Household personal net worth increased 4.7% in the first quarter to $62.9 trillion. The biggest reason attributing to the increase was a 12% spike in the S&P 500 index, which helped increase American’s wealth. Also during the same period, values of homes increased by 2.3%.
Net worth or household wealth is the value of assets such as stocks, bank accounts, and homes, less debts from credit cards, mortgages and any others. During the most recent recession personal net worth bottomed out at $49 trillion in 2009 during the first quarter. Gradually Americans have recovered wealth that they lost during the recession, but it is still about 5% off its peak of just before the recession.
Americans borrowed more during the first quarter of 2012 by 5.8%. It marked the first time that Americans had boosted borrowing by as much as 5% in any two straight quarters since 2008, just prior to the financial crisis.
Last quarter overall household debt dropped by 0.4%, as Americans have steadily shrunk debt for the last four years.
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