WASHINGTON – The net wealth of American households rose in the third quarter of 2005 as real estate and financial assets gained value, but household debt grew at the fastest rate since 1987, the Federal Reserve said on Thursday.
In its quarterly "Flow of Funds" report, the central bank said household balance sheet values rose to $51.09 trillion in the quarter, up from a revised $49.77 trillion in the second quarter.
The 2005 second-quarter net worth was originally reported at $49.83 trillion. The data is not seasonally adjusted.
Household real estate assets grew by $615 billion in the third quarter, while financial assets rose by $959.3 billion.
At the same time, household liabilities rose $338 billion, with mortgage debt climbing $289.5 billion to $8.2 trillion.
The Fed said borrowing outside the financial sector rose at an annual rate of 9.1 percent in the third quarter.
Borrowing outside the federal government and excluding the financial sector rose at a 10 percent annual rate, the steepest rise since the first quarter of 1999, as household and state and local government borrowing picked up.
Household debt grew at an annual rate of 11.6 percent, the steepest climb since the second quarter of 1987, when it rose 12.2 percent, the Fed said.
Growth in business borrowing slowed to a 7.4 percent annual rate from 9.1 percent in the preceding quarter.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox