The steady rise in home prices has bolstered U.S. household wealth to a new high in the second quarter, while mortgage debt is growing at the fastest pace since 2009, according to new data from the Federal Reserve.
The data amounts to a strong signal that consumers have been helping drive the economic recovery since the recession ended six years ago.
Net worth for households and non-profit groups increased by $694.8 billion from April through June, or 0.8 percent from the previous three months, to $85.7 trillion, the Federal Reserve said Friday in its update of finances previously known as the flow of funds report.
In the second quarter of this year, rising property values and a growing job market bolstered consumer spending , which makes up about 70 percent of the economy.
Low interest rates are a big reason for the increased mortgage debt, as Fed policy makers deciding Thursday to keep its benchmark short-term rate near zero amid market turmoil and global concerns.
Overall household debt, which includes mortgages, student loans, auto loans and credit card debt, increased at the fastest pace in a year. Consumer credit, including auto and student loans, rose at an 8.1 percent pace, while mortgage borrowing advanced at a 2.2 percent rate.