Household wealth in America reached a record high of $1.7 trillion in the second quarter of 2017 due to rising property values and gains in financial assets, according to a Federal Reserve report released Thursday.
The report showed that low inflation and a strong job market contributed to Americans’ improved purchasing power, which in turn, helped drive household spending and boosted the economy.
Gains in the stock market also enabled companies to invest more of their resources. Companies had nearly $2.3 trillion in liquid assets that could be put toward investment, according to the report.
Much of this increase in household wealth reflects the steady increase in home prices, which went up 5.7 percent in June from 2016, Bloomberg Markets reported.
As households increased their assets, borrowing rates for mortgages and other consumer loans also increased.
Mortgage borrowing went up 2.8 percent while other consumer loans such as car and student loans increased by 4.6 percent.
The increase in mortgage borrowing is especially prevalent among first-time home buyers who can obtain money from family or friends to help with the down payment.