Household wealth plummets in Q1 2008
Calculated Risk is reporting a huge decline in household wealth due to the deflating housing bubble.
“The Fed released the Q1 2008 Flow of Funds report today: Flow of Funds. The Fed report shows that household real estate assets decreased from $20.046 trillion in Q4 to $19.717 trillion in Q1 2008. That is a decline of $328.9 billion. When we subtract out new single family structure investment and residential improvement, the value of existing household real estate assets declined by $431.”
-Calculated Risk, 5 Jun 2008
It will be interesting to see the timing and strength of the wealth effect that comes from these downward housing valuations.
Update: MarketWatch has an article on the same story. The article quotes:
U.S. households lost $1.7 trillion in wealth during the first quarter, as the collapse in the housing market and a weak stock market took their toll, the Federal Reserve reported Thursday.
The net worth of U.S. households and nonprofits dropped at an annual rate of 11.3% in the quarter to $55.97 trillion. It was the biggest drop in wealth since late 2002.Net worth had grown by more than $20 trillion from 2002 through the end of 2007, as home values and the stock market boomed.-Households’ net worth falls 11.3%, MarketWatch 5 Jun 2008
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