The figure decreased by $1.6 trillion, from $170.9 trillion in the fourth quarter of 2024 to $169.3 trillion, the Federal Reserve said in its “Financial Accounts of the United States” released Thursday (June 12).
This was the first decline since the third quarter of 2023, when there was a 0.9% drop.
During the first quarter, the value of U.S. households’ corporate equities decreased by $2.3 trillion, while the value of their real estate declined by $200 billion.
Bloomberg reported Thursday that the drop in household net worth was due to the stock market sell-off that happened in the first quarter following the announcement of new U.S. tariffs, which investors feared would lead to slower growth.
The subsequent pause or lowering of those tariffs led to a stock market rebound, suggesting that household net worth will recover in the second quarter, the report said.
The decline in the value of households’ real estate reflected a continuing slowdown in the housing market, according to the report.
Reuters also reported that the decline in household net worth was due to the stock market rout that was driven by investors’ concerns about tariffs, and it may turn around. Household wealth hit record highs in the previous quarters.
The report also said that the fall in the value of households’ real estate holdings came as house prices declined for the third consecutive quarter.
The Federal Reserve data released Thursday also showed that household debt increased 1.9% at an annual rate in the first quarter. That figure was down from 3.3% in the previous quarter.
In the first quarter, consumer debt grew at an annual rate of 1.3%, and mortgage debt grew at an annual rate of 2.3%, the data showed.
PYMNTS reported April 11, shortly after the end of the first quarter, that consumer sentiment had fallen to lows not seen since the pandemic and the Great Recession.
The drop at that time was driven by worries over household finances, inflation and the impact of tariffs.
