U.S. households' net worth dropped by $300 billion in the second quarter of 2012, as any gains made from rising real estate values were offset by the falling stock market.
A Federal Reserve report released Thursday showed that households' total net worth fell to $62.7 trillion between April and June of this year.
"The value of corporate equities and mutual funds owned by households declined close to $600 billion, more than offsetting a $355 billion increase in the value of real estate owned by households," the Fed said.
Net worth represents total assets, such as homes and stock portfolios, minus liabilities, such as mortgages and credit-card debt. The stock market declined in the second quarter, with the Dow Jones Industrial Average falling more than 2.5% during the period. Meanwhile, the U.S. housing market has been showing signs of recovery recently, with home sales and prices beginning to stabilize.
The central bank's "Flow of Funds" report presents an overview of U.S. household, business and government debt finances.
It also showed that household debt rose at an annual rate of 1.3%, the largest increase since the first quarter of 2008. That brings the net level of household debt back to near where it was in the third quarter of last year.
In the second quarter, home mortgage debt dropped slightly more than 2.0%, continuing a downward trend that began in early 2008, the Fed said.
Meanwhile, consumer credit rose at an annual rate of 6.3% percent, marking the seventh consecutive quarterly increase.
State and local government debt rose at an annual rate of 0.8% after falling for five straight quarters.
The federal government's debt rose at a slower pace than recent quarters, rising at an annual rate of 10.9% in the second quarter, the Fed said.
Debt held by nonfinancial businesses rose at an annual rate of nearly 5%, after an increase of 3.5% in the first quarter. Corporate bonds outstanding and business loans both saw increases, while commercial mortgage debt continued to decline, the Fed said.
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