Rising stock markets and home prices helped lift U.S. household wealth to a record in the first quarter of 2014, the government reported Thursday.
The Federal Reserve (Fed) said household net worth increased $1.5 trillion in the January-March period to $81.8 trillion.
The gain was driven by higher home prices, which increased home values by $758 billion. A rising but volatile stock market pushed up investment holdings by $361 billion. Checking-account balances, pension-plan assets, and retirement savings also rose.
Since the first quarter ended, stock and home prices have risen, further increasing household wealth, though mostly to affluent Americans, as 10 percent of U.S. households own about 80 percent of stocks.
Still, the rise in wealth could benefit the broader economy. Consumers who feel richer because of more valuable stock portfolios or rising home values typically spend more.
The Great Recession dramatically slashed U.S. household net worth. Overall wealth fell to $55.6 trillion in the first quarter of 2009, 19 percent below the pre-recession peak of $68.8 trillion. Since then, a soaring stock market and rising home prices have recovered the lost wealth and pushed it to new highs.