Household net worth climbs with stock market

September 11, 2025

Household net worth jumped $7.1 trillion to a new record level of $176 trillion. The second quarter increase was the biggest gain since 2020 and follows a $1.7 trillion drop in the first quarter when trade tensions and uncertainty prompted investors to sell their equity holdings.

Household net worth recovered strongly on the back of a rising stock market that achieved even higher levels. The S&P 500 gained 10.6% in the second quarter after declining 4.6% in the first quarter. Appreciating home values contributed to the strength in household balance sheets.

Financial assets, comprised largely of stocks, mutual funds and pensions, increased $5.8 trillion. Equity asset values rose $3.7 trillion, pension entitlements gained $1.1 trillion and mutual fund shares $839 billion. With investors rotating out of the safety of Treasury securities and into equities, embracing more risk, debt securities’ holdings were left in the dust. Interest rate bearing assets rose just $93 billion.

On the nonfinancial side, mainly consisting of residential real estate ownership, assets rose $1.4 trillion. Real estate assets held by households ballooned by $1.3 trillion.

Both business and household debt increased at a similar rate. Borrowing by nonfinancial corporate businesses rose at a 3.1% annual rate while households increased borrowing by 3.3%.

Businesses took preemptive action in the first quarter and built inventories ahead of tariff announcements. Holding inventories in bonded warehouses is costly, necessitating debt financing. Some businesses extended the use of bonded warehouses into the second quarter as some tariffs were further delayed. Some kept certain goods stockpiled in the hope that tariffs would be cut, although the administration is beginning to restrict how businesses leverage bonded warehouses to game tariff increases.

Households took on additional borrowing during the second quarter to buoy their spending gains. Spending gains have slowed from the pace of 2024 in 2025 but have not collapsed. Higher inflation will further erode purchasing power along with the slowdown in the labor market. Inequality appears to be worsening, with low- and middle-income households assessing the economy far worse than their affluent counterparts. Today's data reinforces that shift, even though more people hold stocks than pre-pandemic due to the proliferation of 401Ks.

The personal savings rate came in at 4.4%, which is above the lows we saw during the spending spree at the end of 2024, but still historically low. The saving rate has averaged 5.6% since 2000. Consumers continued to rely heavily on their savings and access to debt to buoy their spending.