With a near-zero interest rate leading to an upsurge in borrowing in both corporate alongside individual level and massive Government relief bills injecting fresh influx of billions of dollars into the economy last year, US households had wrapped up 2020 with an all-time high $130.2 trillion worth of assets on record, a US Federal Reserve report had unveiled.
In point of fact, a still-raging pandemic outbreak had stemmed a number of stimulus bills last year including a trillion-dollar rescue package passed in the US Senate on April last year, handing out a one-off $1,200 in pay-checks to most adult Americans alongside an additional $600 per week in state unemployment benefits, while a rock-bottom interest rate led to a uprising in US housing market with long-term fixed home loans hovering to their record lows.
Besides, an unprecedented upsurge in savings due to the pandemic-led restrictions coupled with a high-tide in work-from-home employees, had witnessed a massive influx of fresh capital into US equity markets as tech-savvy growth stocks and mega-cap tech conglomerates had led the Wall Street to record closing highs multiple times.
US households wind up 2020 with record $130.2 trillion worth of assets
On top of that, according to the Federal Reserve report, a tech-boom helped US equity markets add as many as $4.9 trillion to household assets over the fourth quarter of 2020, while a rise in real estate values amid a steep shortage in US housing supplies, largely due to a race towards suburbs and countryside in bids to avoid the densely populated US cities, added another $900 billion in US households’ assets.
Apart from that, balances in fresh liquidities, saving deposits and current accounts jumped to a combined $642.7 billion to a record $14.1 trillion over Q4, 2020, however, overall household borrowings grew at an annualized rate of 6.5 per cent over the fourth quarter which followed a rise in household debts by 5.7 per cent a quarter earlier, while total mortgage debts spiked to a record $10.9 trillion and credit card debts had rounded off the year at a lump-sum of $974.9 billion.