Jun
12

Drop in Mortgages = Rise in Wealth

June 12, 2011

Here’s a surprising stat: The average U.S. household wealth rose in the first quarter of this year.

Yes, I said rose, not dropped.

According to the Federal Reserve, rising stock prices and debt reductions outweighed sliding real estate prices to increase U.S. household’s net worth by about $943 billion to $58.1 trillion in the first three months of 2011.

That’s the highest level since mid-2008.

It’s also way below its peak of $65.8 trillion in June 2007.

Household wealth includes your home plus stocks, bonds and other assets, but does not include your mortgage and other debts.

Speaking of debt, the report shows that Americans have trimmed theirs for the 12th straight quarter, mainly because of a 3.4 percent drop in mortgages. Household debt fell 2 percent to its lowest level since the first quarter of 2007.

For those Americans who count most of their assets in their homes, the picture isn’t as pretty as real estate values continue to slide.

How about those Americans who want to have children? Wonder what kind of a hole one of those will put you in?

According to the U.S. Department of Agriculture, the cost to raise a child born in the United States in 2010 is $226,920; $286,860 if you account for inflation.

That amount should cover shelter, food and other necessities to raise that child to the age of 18. It’s a 2 percent increase from 2009.

For middle-income families, housing costs are the single largest expenditure on a child, equaling about 31 percent of the total cost over 17 years.

This study has been done for the last 50 years. In 1960, the study’s first year, housing was the largest expense then as well, though the cost to raise a kid back then was $25,230, or $185,856 in today’s dollars.

To see the full report, visit cnpp.usda.gov. You can also enter the number and ages of your children at the site to figure out how much the little stinkers are costing you.

Categories: Economy, Mortgages

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Tracey

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