As the Federal Reserve considers another hike in interest rates, the impact on Americans’ wealth is being felt, with U.S. household net worth falling for a third straight quarter.

U.S. household wealth fell by $400 billion in the third quarter, according to the Fed. Household net worth declined from $143.7 trillion at the end of June to $143.3 trillion at the end of September. Household net worth had fallen a record $6.3 trillion in the second quarter. 

During the time period from June to November, stocks lost almost $2 trillion in market value on concerns about stubbornly high inflation and the Fed raising interest rates. At the same time, the pace of home price growth has slowed, with the housing market bearing the brunt of the Fed’s rate hikes. The value of real estate held by households rose, but only by a modest $820 billion.

Consumers also continued to use their credit cards, with consumer credit not including mortgages rising at a 7% annual rate in the third quarter. While that is still elevated, it did mark a deceleration from the previous three months.

The report showed that household cash stockpiles measured by the sum of balances in checking and saving accounts were effectively unchanged in the third quarter at nearly $184 trillion, down about $134 billion from its peak in the first quarter. Overall, U.S. households have lost nearly $7 trillion in net worth this year, largely due to the stock market selloff. 

U.S. Federal Reserve.

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