Household net worth slumps as financial and housing markets weaken
Households were less wealthy in the third quarter as their net worth—the value of all assets minus all liabilities—shrank $301.2 billion (-1.8%) to $16,168.3 billion. Headwinds, in the form of weaker financial and housing markets, dragged on household wealth; the value of real estate declined after two quarters of recovery, while both foreign and domestic equity markets softened, with the Standard and Poor's (S&P) 500 Index falling 3.6% and the S&P/TSX Composite Index declining 3.0%. These market contractions pushed the value of households' total financial assets 2.1% lower (-$196.3 billion), while the value of total non-financial assets fell 0.8% (-$74.5 billion). On the other side of the ledger, financial liabilities, composed primarily of mortgage and non-mortgage debt, increased $30.5 billion from the second quarter. This represented the slowest year-over-year expansion (+3.2%) in household liabilities since 1990.
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