US Household Wealth At $109 Trillion In Q3

Tom Burroughes

17 December 2018

The figure of $30 trillion is often thrown around as the kind of sum expected to be transferred from Baby Boomers to the next generation in coming years. And for wealth managers trying to put that huge figure in context, recent data from the US Federal Reserve shows that the net worth of households and non-profits rose to $109.0 trillion during the third quarter of 2018.

The value of directly and indirectly held corporate equities increased by $1.2 trillion and the value of real estate increased by $0.2 trillion, the central bank said in a recent report.

Domestic non-financial debt outstanding was $51.3 trillion at the end of the third quarter of 2018, of which household debt was $15.5 trillion, non-financial business debt was $15.0 trillion, and total government debt was $20.8 trillion. Domestic non-financial debt expanded by 4.4 per cent at an annual rate in the third quarter of 2018, down from an annual rate of 5.2 per cent in the previous quarter.

Households could face risks from excessive exposure to stocks and real estate in the event of a market downturn. The data reveals that in September, households held 44.4 per cent of assets in houses, and directly and indirectly through retirement plans and other savings, which is the highest level since September 2007, a year before the global financial crisis.