In 1995, U.S. households held similar amounts of assets in home equity and corporate stocks: US$4.3 trillion in stocks and US$4.7 trillion in home equity. (See: Federal Reserve Flow of Funds Table B100.)

Over the decade, the situation changed dramatically, so that by 2004, households held US$4.8 trillion more in home equity than in corporate stocks, as the graph shows.

	Home Equity vs. Stock Holdings

This difference came about because of the crash in the stock market in 2000-2001 and because of the steady increase in home values throughout the decade.

[Note: ‘Home Equity’ is calculated by subtracting home mortgages from the market value of residential property owned by this sector.]

American households, as of December 2004, had accumulated $3,475.1 billion in tax-deferred Individual Retirement Accounts (IRAs), according to the Federal Reserve Flow of Funds Accounts.

The largest portion of these savings were held as “self-directed accounts”, in which a wide diversity of investment are permissible (according to Equity Trust Company), such as:

• Real Estate (apartments, single-family homes, and duplexes);
• Commercial property, developed or undeveloped land;
• Mortgages or Deeds of Trust;
• Publicly traded stocks, bonds, and mutual funds;
• Private limited partnerships;
• Private stock offerings, private placements;
• Private limited liability companies;
• Secured and unsecured notes;
• Judgments, Structured Settlements;
• Tax Sale Certificates;
• Car Paper;
• Factoring;
• Accounts Receivable;
• Commercial Paper; and
• Equipment Leasing.

The graph shows the distribution of individual retirement accounts, by type of custodian:

	Growth of IRA Accounts

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The Federal Reserve Flow of Funds Table F211 for Municipal Securities and Loans, shows that state and local government are issuing long-term bonds at record levels.

The main purchasers of municipal bonds are domestic individual investors that benefit from tax exemptions on municipal bond interest. The largest institutional purchasers are property-casualty insurance companies and money market funds.

The graph shows that total liabilities have increased since 1995 with much of new municipal debt being financed by the household sector.

	Individuals Hold Government Debt

The rate of increase in borrowing by State and Local Governments has more than tripled since 2000.

Foreign investors are not significant players in this market.