WASHINGTON — Americans’ household wealth rose in the first three months of this year as home values increased, offsetting a drop in stock prices.
The Federal Reserve said U.S. household net worth increased 1 percent to $88.1 trillion in the first quarter. Americans’ stock and mutual fund portfolios shrank $160 billion, while home values jumped $498 billion. Savings in certificates of deposit and other bank accounts also rose.
The rise in real estate values likely means the wealth increase was more widely shared than in many previous quarters, because home prices are the primary source of middle-class wealth. Richer Americans rely more on financial assets.
Greater household wealth could boost consumer spending, which drives 70 percent of the U.S. economy. Americans typically spend more when they feel wealthier.