Net worth of households nationwide fell by $1.6 trillion in the first quarter of the year, while households debt increased by a 1.9% annual rate in the same period, the Federal Reserve said Thursday.
In releasing its figures for financial accounts of the U.S. in the first quarter 2025 (its Z.1 report), the Federal Reserve noted that the fall in household net worth, seasonally adjusted, was driven primarily by losses on stocks (corporate equity assets). Total net worth, the Fed said, was $169.3 trillion.
However, another part of the decline, the Fed noted, was attributable to a $0.2 trillion decrease in the value of owner-occupied real estate, “as house prices continued to decline for the third consecutive quarter.”
The debt increase, the Fed said, reflected “modest growth” of mortgage debt and slower growth of nonmortgage consumer credit.
Directly and indirectly held corporate equities (at $55.6 trillion) and household real estate (at $47.9 trillion) remain the largest components of household net worth, the Fed noted.
Meanwhile, the Fed reported, nonfinancial business debt grew by a 4.8% (seasonally adjusted) annual rate. The agency said that expansion was driven by “robust issuance of debt securities and continued growth in loans.”
“This acceleration was mainly driven by robust net issuance of debt securities, including corporate bonds and commercial paper, by nonfinancial corporations,” the Fed said. “The debt growth of nonfinancial noncorporate businesses slowed slightly in the first quarter.”
The report also points to a “notable deceleration” in the federal government debt in the first quarter, as it increased at a 2.0% pace. The Fed said that was a result of the Treasury drawing down cash balances and using “extraordinary measures to remain below the statutory debt limit.”
State and local debt, conversely, rose in the first quarter by an annual rate of 4.3%. In the previous quarter, it only rose at an annual rate of 1.3%, the agency said.
Financial Accounts of the United States – Z.1