Federal Reserve’s “Flow of Funds” Reports Largest Post-Great Recession Quarterly Increase in Q3 2021

According to the latest from the Federal Reserve’s Z.1 Financial Accounts of the United States, i.e., the “Flow of Funds”, the aggregate value of all home mortgages of households and nonprofit organizations in the United States in the Q3 of 2021 registered the largest post-Great Recession numerical quarterly increase. From $11.3 trillion in Q2 of 2021, household liabilities rose by $230 billion to $11.5 trillion. Both the current quarter and the previous quarter’s numerical increases in the aggregate value of home of home mortgages were outsized compared to all previous quarters since June 2009.

Home equity is increasing even faster. On the assets side of the balance sheet, the aggregate market value of all owner-occupied real estate increased to $36.8 trillion from $35.5 trillion the previous quarter. Of note, aggregate owners’ equity — that is, the difference between the market value of all owner-occupied real estate and the aggregate value of home mortgages — increased in the latest quarter to $25.3 trillion, or 69% of all household real estate, the highest share since 1989.

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Flow of Funds: Mortgages Show Outsized Increase