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Household net worth in the US hits a new record, but the wealthy reap the benefits

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Michael Conroy/AP/File

(Read caption) An "Under Contract" sign is posted outside a home in Carmel, Ind. U.S. on April 9, 2013. Household net worth jumped $1.4 trillion in the second quarter, fueled by stock values and gains in home.

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On the whole, Americans are richer than ever before. 

Household wealth in the US hit the highest level ever in the second quarter of this year. The Federal Reserve's study on Financial Accounts of the US reports that household net worth increased $1.4 trillion between April and June. The 1.7 percent gain means Americans now hold a record $81.5 trillion in assets, which includes the values of stocks and home value minus debts and other liabilities. The increase comes after a downwardly revised $1.23 trillion in the first quarter.

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"Taken together, the reported growth in household net worth should continue to encourage consumer spending growth through the wealth effect," Barclays said in a statement. "The increases .... are consistent with our outlook for moderate private consumption growth of 2.5% over the next few quarters." 

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The report found that household borrowing rose at an annualized rate of 3.6 percent in the second quarter, the fastest since the first quarter of 2008. In a good sign for the housing market, real estate values were up $230 billion in Q2. Consumer credit, which includes student loans, rose 8.1 percent.

The total value of stocks and mutual funds rose $1 trillion in the second quarter thanks to a high performing stock market. Wednesday, the Federal Reserve announced it would keep interest rates low for the coming months, and the Dow Jones Industrial average closed at an all-time high of 17,156.73. But questions remain about who is actually profiting from the increases in the stock market. 

"Much of the nation's rising wealth also goes disproportionately to the wealthy, who tend to own stocks and save their money, reducing the benefits to the overall economy," wrote The Wall Street Journal. Ten percent of Americans own 80 percent of stocks. 

The Federal Reserve's Survey of Consumer Finances report found that the median household net worth was $81,200, which is down 2 percent from 2010. The top 10 percent of households had an average net worth of $3.3 million, while the lowest 5 percent had an average household net worth of $6,400.

"The financial crisis and the Great Recession demonstrated, in a dramatic and unmistakable manner, how extraordinarily vulnerable are the large share of American families with few assets to fall back on," Janet Yellen, chairman of the Federal Reserve, said in a news conference Thursday.