The United States Federal Reserve reported that in the first quarter of this year, the net worth of American households grew by $1.6 trillion. This puts the combined wealth of American families to an all time high – $84.9 trillion.

The increase has been attributed to the rising values of property and investments. The housing market rose by $411 billion and the financial holdings of households rose by $1.1 trillion.

Experts are optimistic. Unlike previous booms – such as the Dot.com bubble of the 1990s or the disastrous housing bubble of the early 2000s– the recent growth is not based on consumer debt. Indeed, Americans have been more reluctant than ever to borrow money.

With luck, the added wealth – combined with strong job growth and slow but steady wage increases – will convince consumers to spend more. Expenditure is key to any successful economy. The first quarter of this year was marked with below average economic growth, largely thanks to consumer reticence.

“Household balance sheets should remain an important driver of the U.S. economy’s consumption-led recovery,” said Harm Bandholz, the chief U.S. economist at UniCredit. Bandholz went on to say that the “strong wealth position of private households” will lead to less saving by households in days to come.

The caveat to this good news is that the majority of the household wealth is held in the hands of the ultra-rich. One percent of Americans own over half of the $84.9 trillion, mostly in the form of stocks, bonds, or cash.