American households saw the third consecutive decline in net worth during Q3, Fed data show.
Low-interest rates giveth, high-interest rates taketh away.American households saw the third consecutive quarterly decline in net worth during Q3, asHousehold net worth — which includes the value of assets such as 401s and residential real estate — is a ballpark estimate for the aggregate wealth of Americans.rising wealth levels help people feel more confident about spending money.
The sharp decline in stocks drove the downturn, with the value of corporate equities falling 21% — to $24.33 trillion — compared to the third quarter of 2021.The Federal Reserve helped lead government efforts to insulate the economy from the pain of the pandemic, axing interest rates to near zero and pumping trillions of dollars into financial markets.
Such programs did help ward off a deep downturn, but they also were widely seen as helping ignite the stock market and residential real estate booms, which briefly supercharged levels of wealth among Americans.worth, which in reality, is spread unequally over the U.S. populace.— the most affluent have borne the brunt of the recent decline in wealth.
Home prices have stopped rising, but an expected pullback due to high mortgage rates is taking some time to work its way through the system: Housing values were still up 13% compared to Q3 2021, the Fed said.
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