Across the nation, the economic condition has eased. Recent reports state that the combination of continued home price increases and rising stock prices have put $16 trillion in wealth which was lost during the Great Recession back into the hands of Americans. The gains have helped to ease the economic stress and they have helped to lead Americans to more spending and growth.
The majority of recipients are richer Americans who have profited from higher stock prices. Home equity is the main source for middle class wealth, which has experienced a slower surge.
The Federal Reserve announced that at the end of 2012, $66.1 trillion was the figure for total household wealth. When these statistics are compared to the previous three months, there is a jump of $1.2 trillion. It also shows 98 percent of the pre-recession peak.
According to private economists a climbing rise in home prices and stock has brought the net worth of Americans past the pre-recession peak of $67.4 trillion. In early 2009, wealth was down to $51.4 trillion.
Senior economist at Moody’s Analytics claims that it is almost a sure thing that the nation will surpass that peak in the year’s first quarter.
Household wealth aka net worth is measured in a combination of asset values such as homes, bank accounts and stocks, less debts such as credit cards and mortgages. Across the nation an increase in home prices has occurred. Surging stock prices have also resulted accord in the Standard & Poor’s 500 index. Economists have mixed opinions as to whether the recovery will spur more consumer spending than that which occurred before the recession.
Some economists, such as, Credit Suisse’s Dana Saporta state that with the decline of 90 percent in home equity in the past six years, the result will likely be a slimmer chance that Americans will fuel spending with the equity from their home. Saporta claims that the terrible impact the housing bust had on Americans has kept many Americans cautious, and therefore they may not necessarily look at the recovery as a new trend, but, rather with skepticism, which will not result in their spending more.
Lastly, the main recipients of the nation’s recovered wealth- the upper-income Americans do not tend to be as free with spending their money as that of Americans overall.
These are the Americans who have gotten richer. Dow Jones reports a record high since 2009 since the stock market bottomed out. The industrial average climbed 119 percent. Among stocks held, 80 percent are held by the richest 10 percent of households.
New York University economist, Edward Wolff states that among middle-class assets homes accounted for two-thirds of assets before the recession.
Across the nation, the homes accounted for one-third of assets. To date, home values nationwide remains roughly 30 percent under their peak, but are making an incredible comeback in many neighborhoods.
There is a mix, however. Many Americans are benefiting. A less stressed economic state has increased the spending as a result. Overall, the picture is bright. This past year has brought a new wave of enthusiasm, and the projection is things will continue to soar.