Americans' wealth took a nosedive early this year as the stock market plummeted.
The net worth of households and nonprofit organizations dropped $0.5 trillion to $149.3 trillion in the first quarter, according to Federal Reserve Bank data released Thursday. That's a notable turnaround from the robust gains in wealth that began in mid-2020, fueled by skyrocketing prices of homes and equities.
The first-quarter decline reflects the earlier this year, which slashed $3 trillion from the value of directly and indirectly held corporate equities. The total value of these holdings was $46.3 trillion in the first quarter, making it one of households' largest assets.
The and the each dropped nearly 5% in the first three months, while the plummeted nearly 9%. It was the worst quarterly performance for the markets since the first quarter of 2020 when the Covid-19 pandemic upended the US economy.
Weighing on the market this year have been , , soaring , by the Federal Reserve and continued concern about the .
But the decline in equities was partially offset by a $1.7 trillion increase in the and a continued high rate of personal saving, the Fed said. Households and nonprofits held $44.1 trillion in real estate assets.
The ratio of household net worth to disposable income remained near its record high and continues to be far above its pre-pandemic level in 2019.
Meanwhile, household debt grew at an annual pace of 8.3%, reflecting strong growth in both home mortgages and consumer credit, the Fed said.
The continued rise in home prices prompted an 8.6% increase in mortgage debt. Americans also borrowed more on their credit cards and took out more auto loans, leading consumer credit to jump 8.7%.
The-CNN-Wire
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