The net worth of households and nonprofit organizations dropped $0.5 trillion to $149.3 trillion in the first quarter, according to Federal Reserve Bank data released Thursday. That’s a notable turnaround from the robust gains in wealth that began in mid-2020, fueled by skyrocketing prices of homes and equities.
The ratio of household net worth to disposable income remained near its record high and continues to be far above its pre-pandemic level in 2019.
Meanwhile, household debt grew at an annual pace of 8.3%, reflecting strong growth in both home mortgages and consumer credit, the Fed said.
The continued rise in home prices prompted an 8.6% increase in mortgage debt. Americans also borrowed more on their credit cards and took out more auto loans, leading consumer credit to jump 8.7%.