The Canadian and American central banks are pulling out all the stops to support the economic recovery, with the latest move being their indications that they expect to hold interest rates near zero over the next few years. However, as the COVID-19 pandemic persists, the hoped-for sustained revival in consumer borrowing and spending is anything but certain. In an unprecedented move on Sept. 16, the U.S. Federal Reserve said it doesn’t expect to raise its key interest rate until 2023, providing a very powerful signal that near-zero rates are here to stay for a long time. A week earlier, the Bank of Canada had said, “The Governing Council will hold the policy interest rate at the effective lower bound [0.25 percent] until economic slack is absorbed so that the 2…
Even as a global pandemic is raging, American households, as a group, are the richest they have ever been—driven by increases in value in real estate and other non-financial assets, and despite a 7.5 percent decline in the value of financial assets since December 2019, according to Federal Reserve data.
Households’ non-financial assets—mostly real estate, but also some other assets—have increased in value to $40.89 trillion in June from $39.93 trillion in December 2019. On the other hand, the value of households’ “financial assets” fell to $223.4 billion ($0.22 trillion) from $241.4 billion ($0.24 trillion) during the same period.
For readers of this commentary, this increase in households’ real estate values won’t come to a surprise. We have written extensively and frequently about quickly rising housing prices in Southern California, noting the effects of the combination of housing supply being constrained by tenant and mortgage protection programs as well as by lack of normal job mobility (a major contributor to housing mobility), demand from people moving out of higher-density areas they may think are more susceptible to public health risks, and demand from families seeking more room to work, study, and play at home.
Furthermore, home ownership rates are increasing. According to the U.S. Census Bureau, 67.9 percent of households owned their own home in June, substantially higher than the 64.1 percent rate of the second quarter of 2019 and also the 65.1 percent rate seen at the end of last year.
And even though the value of the financial assets generally owned by wealthy families have gone down recently, the home values for many of the almost 68 percent of households with real estate holdings are going up.
That’s causing U.S. household wealth to reach an all-time high.
Tim Shaler is a professional investor and economist based in Southern California. He is a regular columnist for The Epoch Times, where he exclusively provides some of his original economic analysis.
Focus News: US Household Wealth at All-Time High
Facebook has shut down more than 180 fake accounts, groups, pages, and Instagram accounts that it determined to be run in China, which posted content on the U.S. presidential election and spread Beijing’s talking points on a range of topics, from the South China Sea to Hong Kong protests. The U.S. social media giant announced the takedown in a blog post published on Sept. 22, saying that these accounts were a violation of its rule against “coordinated inauthentic behavior on behalf of a foreign or government entity.” In total, 155 Facebook accounts, 11 pages, nine groups, and six Instagram accounts were shut down. The Instagram app is owned by Facebook. Nathaniel Gleicher, Facebook’s head of security policy and author of the blog post, explained that while people behind these accounts…