US households lost $1.3T during stock market rut this fall

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U.S. household wealth plummeted in the third quarter by the most in a year as a result of deep stock losses, according to a Federal Reserve report released Thursday. 

Household net worth fell about $1.3 trillion, or 0.9%, in the three-month period from July to September to $151 trillion. 

The decline was largely due to a $1.7 trillion drop in the value of equity holdings. That was offset by a rise in the value of real estate held by households, which hit a record high last quarter.

The Fed data comes after a volatile year for the stock market. 

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People walk outside the New York Stock Exchange in New York City.  ((Photo by Spencer Platt/Getty Images) / Getty Images)

All three indexes tumbled in mid-2023 amid fears that the Federal Reserve would raise interest rates higher than previously expected – and hold them at peak levels for longer. 

But they have quickly recouped those losses, with the S&P 500 rising nearly 11% since it hit bottom at the end of October. 

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The Fed's report also indicated that household debt continued to climb in the third quarter, rising at a 2.5% annual rate amid «somewhat slower growth» in both mortgage debt and non-mortgage consumer credit. 

Americans are increasingly turning to credit cards to pay for everyday necessities amid still-high inflation. 

Credit and debit cards (Photographer: Andrew Harrer/Bloomberg via Getty Images / Getty Images)

Credit card debt topped $1 trillion earlier this year,