US Household Wealth Touched Record High by the End of 2020
A recent report by the Fed reveals that, despite the global coronavirus pandemic and ensuing downturn, households across the US earned
A recent report by the Fed reveals that, despite the global coronavirus pandemic and ensuing downturn, households across the US earned around $130.2 trillion in wealth through 2020. The ultra-low interest rates and multiple rounds of fiscal support helped ease the financial distress driven by the pandemic.
The rally in equity markets contributed an increase of household assets by around $4.9 trillion during Q4 2020 even as the increase in real estate property values added around $900 billion of wealth. Meanwhile, cash balances, money in checking accounts and saving deposits registered a rise by $642.7 billion to touch a record high of $14.1 trillion in the last quarter of the year.
On an even more encouraging note, household wealth improved by $12 trillion YoY in Q4 while consumers managed to pay off $118.3 billion worth of credit card debt during the period. Despite the improvement in paying off debt, households also accrued a higher amount of debt between October and December, rising by 6.5% YoY against Q3’s rise of 5.7% YoY, driven higher by increased home mortgages.
While these numbers look promising, the Fed’s report does not offer a deeper insight into how these numbers breakdown across high income and poor households. However, the report does point to the various fiscal and monetary support unleashed by the government and Fed helping US families with almost $3 trillion worth of aid when the pandemic initially impacted the US.
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