U.S. households' 2006 financial profile shows a marked recovery from the previous years' market doldrums. Despite a record increase in average total debt (jumping by 32% from $68,000 in 2004 to $90,000 in 2006), households' average net worth still gained 39% during this two-year period. This improved household financial status stems largely from the strong economy and the financial markets' reaching new record highs overall.

U.S. households appear to have regained confidence in stocks (outside retirement accounts): Ownership is up by 27%, from 15% in 2004 to 19% in 2006. But mutual funds have yet to show recovery: The 2006 incidence (20%) remains below that of 2004 (23%) and 2002 (28%). U.S. households also strengthened their cash position: More households now own CDs and money market accounts than owned them in 2004, attracted by the higher returns that these products now offer. Overall, households appear to be regaining their confidence in investing. The proportion of households that view the stock market as too risky for them has significantly declined, from 48% two years ago to 43% in 2006.

Other selected highlights from the 2006-07 MacroMonitor survey include:

• Retirement. The incidence of owning any type of retirement account continues its upward curve: More than six in ten U.S. households currently own some type of retirement product, excluding pensions, compared to fewer than half ten years ago.
• Planning and advice. Although households are slightly more likely to turn to a bank or S&L advisor than to any other type of professional for financial advice in 2006, accountants still outrank bank or S&L advisors in terms of trust. Almost one-quarter of all U.S. households say that they trust accountants a great deal, compared to 17% for bank and S&L advisors.
• Credit cards. Overall, credit-card ownership essentially has plateaued, with 77% of all U.S. households owning some type of credit card in 2006. Intriguingly, credit-card debt increased by only a modest amount, with the average credit-card debt (including $0) among owners staying below $5,000-from $4,031 in 2004 to $4,686 in 2006.
• Real estate debt. More than two in five U.S. households (42%) have a firstmortgage loan on their primary residence, up by 14% from the previous two years (37%) and the highest incidence in the past decade. Among homeowners, six in ten have a first-mortgage loan, up from 53% in 2004. The low introductory interest rates prevalent during the hot real estate market have spurred more homeowners to take on equity debt. First-mortgage balances continue their upward trend, with the average balance for first-mortgage loans up by 25%, from $110,000 in 2004 to more than $137,000 in 2006.
• Online financial services. While interest in online banking continued its upward trend, the number of households conducting online investing significantly declined (from some 24 million households in 2004 down to just 16 million in 2006: a 33% drop), reflecting the general pullback in individual investor activity. Contraction among users of other Internet financial services is even more severe: The number of households obtaining a loan, insurance, or some other financial product or service over the Internet dropped by half during this period (from 36 million down to 18 million).
• Insurance. Insurance incidences overall continued to remain stable in the past two years. Seven in ten households have some type of life insurance in 2006: 46% have group life, and 47% have individual coverage. Health insurance trends show no signs of decline: The percentage of households with any type of health insurance remained the same in the past two years-66%-but reflect a decline of 7% from ten years ago. Incidences of owning most types of property insurance-homeowner's, renter's, mortgage, and credit insurance-show no change; the incidence of having vehicle insurance slightly declined (from 77% in 2004 to 74% in 2006), correlating to the reported decline in vehicle ownership.