06/09/2016 08:03 EDT | Updated 06/10/2017 01:12 EDT

Rising home prices lift US wealth, even as stocks fall

WASHINGTON — Americans' household wealth rose in the first three months of this year as home values increased, offsetting a drop in stock prices.

The Federal Reserve says U.S. household net worth increased 1 per cent to $88.1 trillion in the first quarter. Americans' stock and mutual fund portfolios shrank $160 billion, while home values jumped $498 billion. Savings in certificates of deposit and other bank accounts also rose.

The rise in real estate values likely means the wealth increase was more widely shared than in many previous quarters, because home prices are the primary source of middle-class wealth. Richer Americans rely more on financial assets.

Greater household wealth could boost consumer spending, which drives 70 per cent of the U.S. economy. Americans typically spend more when they fell wealthier.