Households Cutting Debt, Increasing Net Worth
The latest Flow of Funds Report from the Federal Reserve points to several positive economic trends.
Household net worth rose by $1.7 trillion to $64.77 trillion. This was a 2.7 percent
increase and was mainly due to higher home prices.
In addition, household debt decreased at an annual rate of 2.0 percent in the third quarter, falling $65.5 billion to $12.87 trillion. This was the largest decline since the second quarter of 2011. It followed a 1.2 percent increase during the second quarter of this year.
Home mortgage debt dropped by 3 percent.
Other forms of consumer credit, such as car loans and student loans, increased at an annual rate of 4 1/4 percent, the eighth consecutive quarterly increase.