The Fed’s quarterly z1 Flow of FUnds report is out, and its none too pretty:
Household net worth—the difference between the value of assets and liabilities—was an estimated
$56.5 trillion at the end of the third quarter of 2008, $2.8 trillion dollars less than in the preceding quarter.
Peter Boockvar notes that this is another record low in Owners Equity as a percentage of Household Real Estate at 44.7%, down from 46% in Q2, 50.9% in Q3 ’07. The recent peak was 59.6% in 2001.
The value of Household Real Estate fell $557b sequentially and $2.086 trillion y/o/y.
The key stat in the data I believe in light of the strain that the US consumer is under and its huge influence on GDP is that of household debt (home mortgages + consumer credit) as a percentage of disposable income. For Q3 it was 123% up from 122% in Q2 but down from 126% in Q1. It peaked at 127% in 2006 and is still well above its level of 83% in 1995.
Flow of Funds Accounts of the United States
Flows and Outstandings
Third Quarter 2008