Huge Surge in Household Net Worth

But that was the point of the discussion. Most people’s ‘net worth’ has increased due to the unprecedented increase of housing prices. As I said above, if you have stocks, rentals, etc. this doesn’t apply.

 

What's my net worth to you? I'll volunteer information I determine as relevant.

e.g.--to elaborate on my last post--architects, builders, sky light installers, retail installers....all my clients in construction and building, are ...not getting much new business. Tightening of the belt... getting sued, asking for their bills to be put on payment plans... b/c the cash flow is drying up.

Inflation...interest rates... you know...that kinda of abstract stuff that apparently doesn't matter to Dems.

 

LOL, rich libs telling you how good you've got it...same old shit.

 

I’d argue that it really started during the pandemic when Trump was President. Too much stimulus and low interest rates held for too long. Biden inherited it and was too slow to react by about a year, which enabled the situation to get worse. I don’t think it’s fair to pin it all on Biden, though.

 

it's different for retirees. salaries have certainly increased with inflation.

what is the source of your income? SS went up much more under Biden that at any other previous time in the last 20+ years. stock market is up with dividends going up. i would assume pensions would have cola's but not a pension guy so don't know. so what is your income source that it did not go up?

 

There are always "a lot of people in bad shape", no savings, high debt, etc.

Given unemployment numbers tho, it's rare to find someone that cant find a job if they want one, so how bad is it really. Inflation sucks for most, but on an individual level unemployment is much worse.
As for net worth, I think it is an important number, I've long tracked ours. Of course, I'm a numbers guy.

 

If you live in Florida, real estate taxes are not typically directly correlated with a rise or fall in home values due to the Save our Homes law.

 

That’s good to know.
But I stand by my other point that increased home values isn’t really helping me out.
Someday when my children inherit my home I guess they’ll enjoy that.

 

Housing starts data doesn’t back this up.

The fed would LOOOVE for this to be true. For housing to flatten or even pull back. It’s not happened yet.

If you are talking retail/office construction, that’s a different can of worms due to post-pandemic and work from home changing the dynamics of office space. They’ve (economists) have been putting out articles predicting a “commercial lease apocalypse” for a couple of years now even before rates started creeping up. Not sure “apocalypse” is ever going to happen , but obviously higher rates doesn’t help an area of the market that’s already challenged.

 

It helps if you are retired and want to downsize a primary residence, or have some investment/rental property that suddenly has a lot more equity to possibly cash out. Even if they don’t intend sell, if people feel they have $200k or $500k equity or whatever, they are much more inclined to spend compared to if they had no equity or were underwater. That’s all part of the psychology of consumer behavior (similar to people who are secure in their jobs compared to when there is fear of being laid off)…

Where it hurts is 1st time homebuyers, or people that need a larger home or are forced to move due to job relocation. Obviously renters are also taking it on the chin.

 

There's always a lot of people who are in bad shape. Per the OP, though, there are fewer of them now than there were before the pandemic, as measure by real net worth.

 

Ultimately the increase in wealth is a form of inflation. Inflation of investments. Stocks. Homes. This is not consumer price inflation.

consumer price inflation is politically toxic because people see rises in consumer goods prices and they feel worse off and they can’t get ahead. The corresponding inflation of their wages they feel like they have earned due to their hard work. As to the rise in investments, they tend to feel like those are earned to due to their good decisions.

 

You got this from a government agency. Do you really believe this load of bull? Are you worth 37% more now than before the Pandemic? Before the Pandemic, literally 2 days before the US closed down for 2 weeks, my wife and I went to Nashville for a belated Valentines Day weekend. We had lunch and dinner and together was about $100 with a 20% tip included. Recently the same meals cost nearly $200, up 100% since before the Pandemic. Now I can tell you my income is exactly the same today as it was before the Pandemic and that's without any benefits. So that's a reduction of about 50% in income. My wife's business is also struggling so she is paying herself about $10/hr and banking all her overtime (which most likely will just go poof) and has terminated all the owner draws for 2023. Together, we are seeing about a 70% decrease in income since the Pandemic started.

 

The topic of this thread is “net worth”, it’s a snapshot in time measure. Same diff as looking at a balance sheet vs an income statement in finance. You are looking at two different things.

Aside from that… do you think it’s typical for everyone to have their income down 70%??? Economists like to look at “disposable income” to predict what people have to spend on services and leisure (those $100 meals), and the data on that looks like we are pretty much on normal trend (after some crazy oscillations from the pandemic).

Real Disposable Personal Income

Most Americans have just one major asset, their primary residence. With real estate being what it’s been - 37% seems completely believable. It’s fair to say it’s not the best measure of economic success (compared to something more sustainable like real wages or measures on disposable income), but it also doesn’t seem hard to believe. It’s mostly just driven by that quick spike in home prices. Typical homeowners may have even seen that “net worth” surge greater than 37%, whereas renters missed out on any of those gains.

 

Interesting article on this, as well as Fed source document.

Never Mind the 1%. Mini-Millionaires Are Where Wealth Is Growing Fastest.


https://www.federalreserve.gov/publications/files/scf23.pdf

 

Makes sense. If you have an “upper middle class” house that was bought for $500k 5-6 years ago it could easily be worth $1M. Ta da.. you’re a millionaire.