Sep 22, 2020 - Economy

Americans saw biggest increase in net worth ever in Q2

Data: Federal Reserve; Chart: Danielle Alberti/Axios
Data: Federal Reserve; Chart: Danielle Alberti/Axios

U.S. household net worth rose by the most ever in the second quarter, thanks largely to the record-breaking rise in stock prices.

By the numbers: Household net worth increased by $7.6 trillion, or 6.8%, to $119 trillion. The gain was the largest on record dating back to 1952, new Fed data show.

  • The value of equities rose $5.7 trillion from the prior quarter, accounting for a little more than 75% of the total U.S net worth increase.

Where it stands: Americans' net worth is up for the year, after declining by $7.2 trillion in the first quarter, when the value of equities dropped by $8.3 trillion but real estate assets rose by $422 billion and other assets (including physical assets like jewelry) increased by $1.1 trillion.

The intrigue: Increases in stock prices have accounted for an average of 65% of Americans' net worth increases over the past 20 years, according to Axios calculations.

  • Real estate value has added a far smaller percentage of the net worth gain, but have been positive in every quarter since Q1 2012.

Of note: Consumer credit fell at a 6.6% annual pace, the most since World War II, thanks in large part to a decline in credit card balances.

  • That came as the federal government debt rose by 58.9% and businesses continued to ratchet up debt, with domestic nonfinancial debt totaling $59.3 trillion.
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