Do You Feel Wealthier Than Five Years Ago?

After the most hated stock-market rally in history and a bounce in home prices, household wealth in the United States is almost back to pre-crisis levels. However, consumers are still under financial stress.

Net worth for American households increased $1.2 trillion in the fourth quarter of 2012 to $66.1 trillion, compared to the previous quarter, according to the Federal Reserve’s latest flow of funds report. This was the highest level since the fourth quarter of 2007. The calculation considers the value of homes, stocks, and other investments minus debts and other liabilities.

The value of financial assets owned by households rose $784.4 billion, with the value of stocks rising over $150 billion. Real estate holdings boosted household wealth by almost $450 billion, as owners’ equity as a percentage of household real estate reached 46.6 percent, the highest since the beginning of 2008.

Although the Federal Reserve has been able to juice financial markets higher with “highly accommodative” monetary policy, household wealth is still $1.3 trillion below its peak of $67.4 trillion in the third quarter of 2007.

Furthermore, the retirement picture still looks dismal…