Households’ Balance Sheets: Q4 2020


According to the Federal Reserve Flow of Funds report, as of the fourth quarter of 2020, the market value of all real estate assets held by households stood at $32.0 trillion. On the other side of the balance sheet, their liabilities, i.e., the mortgages held on said assets, totaled $10.9 trillion. As a result, total owners’ equity, defined as the difference between households’ assets and liabilities, equaled $21.1 trillion or 66% of household real estate, increasing by 0.4% from the prior quarter.

The latest quarter’s year-over-year percent increase in the aggregate value of home mortgages is the largest it has been since the start of the Great Recession, when it had exhibited a year-over-year increase of 5.5%. For Q4 2020, this percent gain was 4.3%, having increased since Q4 2010, when it had reached a low % YoY gain of -4.3%.

The explanation for the increase in the aggregate value in home mortgages is twofold: not only are there more originations of mortgages occurring but also outstanding mortgage balances are not being paid down as quickly due to the 2020 downturn. Meanwhile, households’ increasing market value has been aided by strong house price appreciation in 2020.

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