MarketWatch (05/28/13) Ruth Mantell
If home prices continue to increase, American households will see their net wealth rise by at least $1.8 trillion this year. The U.S. Federal Reserve reports that household real estate assets jumped more than $1 trillion from the end of 2011 to nearly $18 trillion at the end of last year. According to Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities, “Rising home prices will encourage more construction, as builders and buyers become more confident that the assets will increase in value. Higher home prices also lift household net wealth, a very important indirect positive economic factor.” He believes consumer spending could surge by $180 billion.