The S&P 500 remains 21 percent below its 2007 highs. Still, many analysts foresee higher stock prices as the economy improves further.

"We expect household net worth to keep its momentum," said Gregory Daco, senior economist at IHS Global Insight. "Financial gains should offset real estate losses resulting from lower housing prices and very weak sales."

The stagnant values of homes and other real estate holdings are limiting the improvement in Americans' wealth, the Fed's report showed. The value of those holdings fell 3.7 percent last quarter. That followed a scant 0.5 percent rise in the prior three months.

The outlook for housing remains dim. Homes are most people's biggest asset. But their values are still depressed in many markets. Most economists expect home prices nationally to decline 5 percent to 10 percent by the middle of next year. In some markets, declines will likely be steeper