Posted by lindsay on May 4, 2014
In the middle of last year, an amazing $US66.1 trillion in household wealth was reported for the period ending 2012. That was an increase of $1.2 trillion over the previous quarter and 98 per cent of the pre-recession peak.
This is good news when it comes to discussing the country’s recovery, as these increases help support its overall economy. Home prices, in response, have extended their gains, and brought current net worth in 2013 (or household wealth) to a level that tops the $67.4 trillion pre-recession peak.
“Household wealth, or net worth, reflects the value of assets like homes, stocks and bank accounts, minus debts like mortgages and credit cards.” Some economists suggest this regained wealth will contribute to further economic recovery, as it should, “boost consumption,” said US economist Dana Saporta. “As people feel wealthier, they tend to spend more.”
Further, higher home values and easing credit requirement may lead more Americans to cash out additional home equity, which will further aid the economy. However, even if they didn’t, forecasts show that improving home values alone could provide a continued, much welcomed, boost.