csua.org/u/i78 -> news.yahoo.com/s/ap/20070308/ap_on_bi_go_ec_fi/fed_household_finances_1
That marked a 25 percent growth rate from the third quarter, the previous quarterly record high. Stocks gains helped fuel the increase in net worth, although real-estate gains played a role, too. For all of last year, households' net worth rose by 74 percent, a slower pace than the 79 percent increase registered in 2005. The Fed said this deceleration "was accounted for by much slower growth of home mortgage debt." This year's growth in home mortgage debt was the smallest increase in six years. After a five-year boom, the housing market fell into a deep slump last year. So did home prices, which had been galloping ahead, making consumers feel more wealthy and more inclined to spend. Economists said Thursday's report suggest households' finances are holding up fairly well to any strains caused by the troubled housing market and well as some sluggishness in overall economic growth. Analysts said that's because the jobs climate remains in good shape and income growth has picked up. "Slower growth in some of the nation's high-flying housing markets was not enough to send net worth south in the fourth quarter," said Gina Martin, economist at Wachovia. "Instead, household balance sheets continued to improve, as growth in liabilities continued to slow, while growth in assets held steady." One risk facing the economy is that the housing slump will take an unexpected turn for the worse, a development that likely would cause consumers to clamp down.
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