Households Cutting Debt, Increasing Net Worth

December 6, 2012, Written By Bill Hardekopf

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.



The information contained within this article was accurate as of December 6, 2012. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.