Household Net Worth Tumbles By $3.7 Trillion, First Drop In 4 Years | WHAT REALLY HAPPENED


Household Net Worth Tumbles By $3.7 Trillion, First Drop In 4 Years

n the Fed's latest Flow of Funds report released at noon today, the Fed published the latest snapshot of the US "household" sector as of Dec 31, 2018. What it revealed is that with $120.4 trillion in assets and a modest $16.1 trillion in liabilities, the net worth of US households dipped to $104.3 trillion, its first drop after 12 consecutive quarters of increases, and down $3.7 trillion as a result of the near-bear market in the fourth quarter, which wiped out estimated $4 trillion in various financial assets like corporate equities, mutual and pension funds, and deposits after the market tumbled in Q4, offset by a $345 billion increase in tangible assets, of which $280 billion was in real estate values.

Total household assets in Q4 dropped 3.7 trillion to $120.4 trillion, the first drop since Q3 2015, while at the same time total liabilities, i.e., household borrowings, rose by $133 billion from $15.9 trillion to $16.1 trillion, the bulk of which was $10.3 trillion in home mortgages. Homeowners’ real estate holdings minus the change in mortgage debt rose by $223 billion (a positive number means that the value of real estate is growing at a faster pace than household mortgage debt).

The breakdown of the total household balance sheet as of Q4 is shown below.

Webmaster's Commentary: 

This...is officially awful.

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