Gap Closes On Net Worth

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    Canadian household net worth per capita reached 77 per cent of the United States’ level in 2012, says ‘Net Worth in the Household Sector, 1970 to 2012: A Canada-United States Comparison,’ a study in Statistics Canada’s ‘Economic Analysis Research Paper Series.’ Canadian household net worth per capita averaged 60 per cent of U.S. net worth between 1974 and 2006. The sharp drop in U.S. home prices after 2007 reduced net worth per capita significantly while, at the same time, Canadian net worth per capita declined only modestly. As a result, Canadian net worth per capita rose to 77 per cent of U.S. net worth per capita by 2009 and it stayed relatively stable until 2012. Relatively stronger Canadian housing values contributed to this increase. The paper says financial assets produce net worth changes that are correlated. As well, non-financial assets can have a major influence such as the collapse of the U.S. housing bubble in 2007. Household debt was not found to be a major source of year-to-year changes in net worth in either country.