by Calculated Risk June 7, 2024 12:36 PM
The Federal Reserve Board today released its Q1 2024 Flows of Funds Report. United States Financial Statements.
The net worth of households and nonprofit institutions increased to $160.8 trillion in the first quarter of 2024. The value of corporate stocks held directly and indirectly increased by $3.8 trillion, and the value of real estate increased by $0.9 trillion.
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Household debt increased at an annualized rate of 2.9% in the first quarter of 2024. Consumer credit increased at an annualized rate of 1.8% and mortgage debt (excluding provisions for loan losses) increased at an annualized rate of 2.1%.
Click on the graph to enlarge the image.
The first chart shows the net worth of households and nonprofit organizations as a percentage of GDP.
Net worth increased by $5.1 trillion in the first quarter, a new record. As a percentage of GDP, net worth increased in the first quarter but remains below its 2021 peak.
This includes real estate and financial assets (stocks, bonds, pension funds, deposits, etc.) minus liabilities (mainly mortgages), but does not include public debt.
The second chart shows homeowner equity rates since 1952.
When home prices plummeted in 2007 and 2008, household equity ratios (as measured by the Fed) plummeted.
The household equity ratio (household real estate equity ratio) was 73.8% in the first quarter of 2024, up from 73.4% in the fourth quarter of 2023. This is close to the highest equity ratio since the 1960s.
Note: Includes households with no mortgage debt.
The third chart shows household real estate assets and mortgage debt as a percentage of GDP.
Mortgage debt increased by $38 billion in the first quarter.
Mortgage debt has increased by $2.38 trillion since the peak of the housing bubble, but its share of GDP has fallen since the fourth quarter to 46.3% and is down from a peak of 73.3% when the housing bubble burst.
Property values increased in the first quarter as a percentage of GDP, but remain below their peak in Q2 2022 and well above the average for the past 30 years.
