We're getting wealthier

Largely due to the soaring stock market, U.S. household assets rose in value for the second quarter in row following more than a year of declines, up from $64.8 trillion to $67.5 trillion, per the Federal Reserve's latest Z1 Flow of Funds report released earlier today.
We are still about $11.5 trillion below the peak reached in 2007, about half of the decline a result of plunging real estate prices and the other half due to lower stock prices. Though the total value of real estate has been rising modestly for the last six months, as clearly indicated in the expanding green area above, the recent improvement is all about stocks.

Household net worth also rose again, up from $50.7 trillion in the second quarter to $53.4 trillion at the end of September.

Interestingly, as more evidence of how much more fleeting asset values are than the corresponding debt, while total household assets declined by $11.5 trillion since late-2007, total household debt fell by only about $300 billion.

As for household's real estate assets and liabilities, the picture is improving, but slowly.
You have to wonder where we might go from here, particularly if home prices reverse course and resume their decline as many are expecting. You'd think that, in this case, there would be a similar decline in outstanding mortgages as more bad debt is written off.

Per the data from the graphic above, so far, the dollar amount of outstanding home mortgages has only declined by a little over $200 billion while the overall value of U.S. residential real estate has declined by some $5 trillion.