According to Statistics Canada, household net worth was up 1.3% (or $74 billion) to $6.0 trillion, during the first quarter 2010, as the increase in the value of assets exceeded the increase in liabilities. This follows a 1.8% advance in the previous quarter. Gains in the value of financial assets, especially equities, as well as increases in residential real estate contributed to the advance in net worth.

The Standard and Poor’s / Toronto Stock Exchange composite index rose almost 2.5%, continuing the positive trend started in the second quarter of 2009. This was reflected in the growth in value of equity holdings of households, which have risen over the last three quarters.

Household debt, particularly mortgages, increased, a trend reflecting continuing strength in the real estate market. Consumer credit growth decelerated, reflecting the slowdown in demand for durable goods.

The ratio of household credit market debt-to-income rose to 147.0% from 144.9% in the fourth quarter of 2009. However, household credit market debt-to-net worth has remained largely unchanged since the fourth quarter of 2008.

Borrowing costs increased slightly in the first quarter. The five-year conventional mortgage rate rose to 5.85% from 5.49% in the fourth quarter of 2009. Despite the moderate rise in interest rates and increased borrowing, the household debt-service ratio has remained stable for the last four quarters.

Owner’s equity as a percentage of real estate assets edged down to 67.8% in the first quarter of 2010 from 68.0% in the previous quarter, continuing its downward trend from the second quarter of 2008.

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Tags: household debt, Household net worth