Americans are the richest they've ever been thanks to soaring real estate and stock prices

• Americans' net worth hit a record $163.8 trillion in Q2, driven by a surge in real estate and stock prices.
• Data from the Federal Reserve shows a nearly 2% increase In net worth from Q1, with real estate leading the gains.
• Record highs in Americans' net worth could drive a "wealth effect" that leads to the economy's continued resilience.

New data from the Federal Reserve reveals that Americans are the richest they've ever been.

Americans had a cumulative net worth of $163.8 trillion at the end of the second quarter, according to the Fed's latest Financial Accounts of the United States report released on Thursday.

The record high in Americans' net worth last quarter increased nearly 2% from the first quarter reading of $161 trillion, with the gains driven mostly by continued price appreciation in the US real estate market.

A $1.8 trillion increase in real estate valued and a $700 billion gain in stocks drove the increase.

The stock market hit a record high in June, as did the S&P CoreLogic Case-Shiller U.S. National Home Price Index.

Along with the net worth increase, household debt jumped almost 1% from the first quarter to $20.2 trillion, while cash and cash-like security holdings dropped slightly to $18.44 trillion.

Overall, the data paints a healthy financial picture for the US consumer, who is flush with cash and has plenty of exposure to rising-value assets.

It's one reason the US economy has been so resilient even in the face of the Fed's aggressive interest-rate hikes over the past two years.

Economist David Rosenberg said in a note last month that July's strong spending data was likely buoyed by the "wealth effect," which is the idea that when a consumer sees their net worth rise, they feel confident to spend more money, and vice versa.

The strong July retail sales data was "very likely the product of the "wealth effect" which has kept the high-end consumer chugging right along," Rosenberg said.

It's not just rising net worths that are boosting US consumers, but also rising wages.

Data from the Census Bureau released earlier this week shows the median US household income rose 4% in 2023 to a record high of $80,610.

The sharp rise represented the largest annual jump in inflation-adjusted income since 2019.

Altogether, the US consumer seems to be doing more than fine based on the latest economic data.