BuzzStoc

Bad news for people who like money — according to a new report for the Federal Reserve, American households lost $1.33 trillion of their wealth in the first three months of the year as the recession took a bite out of stock portfolios and dragged down home prices.

The Federal Reserve reported today that household net worth fell to $50.38 trillion in the January-March quarter, the lowest level since the third quarter of 2004. Net worth represents total assets such as homes and checking accounts, minus liabilities like mortgages and credit card debt. The first-quarter figure marked a decline of 2.6 percent, or $1.33 trillion, from the final quarter of 2008. Ouch.

This release comes following the release of the Fed’s monthly “Beige Book” that details current economic conditions for the country. The beige book showed that the recession may be coming to an end or at least tapering off.

The damage to wealth in the first quarter came from the sinking stock market. The value of Americans’ stock holdings dropped 5.8 percent from the final quarter of last year. Another hit came from falling house prices. The value of household real-estate holdings fell 2.4 percent. Collectively, homeowners had 41.4 percent equity in their homes in the first quarter. That was down from 42.9 percent in the fourth quarter, which needles to day, is not a good thing.

Despite the drop, the speed at which net worth shrunk slowed to start the year. During the recession’s deepest point in the October-December period, Americans’ net worth fell 8.6 percent, according to revised figures.

The latest snapshot of Americans’ balance sheets was contained in the Fed’s quarterly report called the flow of funds and can be read in full below.

Flow of Funds Accounts of the United States -