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Household Debt Dwindles as Home Prices Increase

debtsAccording to the United States Federal Reserve report, overall national net worth of households rose by 1.7 percent, to $1.7 trillion in the second quarter of 2017, which has been attributed to continued growth in both the stock market and the housing market. In 2007, household net worth stood at $66,738 billion and dropped over $10,000 billion in 2008 when the housing crisis occurred.

Current net worth stands at $96.2 trillion. Equity value increased by $1.1 trillion, and the worth of real estate rose by nearly $600 billion, mostly due to constrained inventory and continually rising home prices.

Of the $47.9 trillion of total domestic nonfinancial debt outstanding, $14.9 trillion of that was household debt, and $13.9 billion was nonfinancial business debt. The remaining $19.1 trillion was government debt. Seasonally adjusted, domestic nonfinancial debt rose by 3.8 percent, which is an increase of 1.7 percent from the first quarter of this year.

Household debt also increased by 3.7 percent, and mortgage debt—minus charge-offs—increased at an annual rate of 2.8 percent.

On the federal level debt increased at a seasonal, annual-adjusted rate of 3.6 percent, which is an increase from the first quarter’s rate of 2.6 percent. State and local government continued to decline this quarter at a rate of 1.0 percent, which was less than the 3.4 percent decline in Q1 2017.

You can view the table of household net worth and growth below, and read the full report here.

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About Author: Joey Pizzolato

Joey Pizzolato is the Online Editor of DS News and MReport. He is a graduate of Spalding University, where he holds a holds an MFA in Writing as well as DePaul University, where he received a B.A. in English. His fiction and nonfiction have been published in a variety of print and online journals and magazines. To contact Pizzolato, email joseph.pizzolato@thefivestar.com.

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