Americans' net worth hits all-time high

WASHINGTON - Americans' wealth reached an all-time this summer, buoyed by record-setting stock prices and a healthy recovery in home values.  

The Federal Reserve says U.S. net worth, a measure of household wealth, rose 2.6 percent to $77.3 trillion in the July-September quarter. Net worth reflects the value of homes, stocks, bank accounts and other assets minus mortgages, credit cards and other debts.  

Rising stock prices boosted Americans' net worth $917 billion. Higher home values added another $428 billion. Greater net worth can create a "wealth effect," which boosts economic growth by encouraging more households to spend.  

But the gains haven't been equally distributed. The wealthiest 10 percent of households own about 80 percent of stocks. And home ownership has declined since the recession, particularly among lower-income Americans.

Growth in Americans' income, while rebounding from the impact of the recession, also remains subdued. Median household income in October was $52,299, only 2.7 percent higher than in August 2011, according to Sentier Research.

Household debt is also on the rise, mostly in the form of credit card and other bank loans. It is unclear what impact that could have on families and on the economy.

"The question is whether this is a positive or negative development for the economy," said Paul Edelstein, director of financial economics at IHS Global Insight. "A lower debt/income ratio could make it easier for households to spend. But the declining ratio could also be a sign that households are now less willing to maintain high debt loads after the crisis."