UPDATE 1-U.S. net household wealth rose in 3rd quarter-Fed

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WASHINGTON, Dec 6 (Reuters) - The net wealth of U.S. households rose to $58.60 trillion in the third quarter from a revised $57.98 trillion in the second quarter as financial asset gains outpaced slowing real estate values, a Federal Reserve report on Thursday showed.

The U.S. central bank's quarterly "flow of funds" report showed that households continued to see the value of their total assets grow as the second quarter figure was revised up from an originally reported $57.86 trillion. The net worth data is not adjusted for seasonal variations.

Total U.S. debt, excluding the financial sector, rose at an adjusted 8.9 percent annual rate in the third quarter, up from a revised 7.2 percent rate of increase in the second quarter.

The Fed said the pickup in third-quarter debt accumulation occurred primarily in the federal government and business sectors, while households and state and local governments brought down their rates of debt growth modestly.

A slowdown in the housing market likely was responsible for some of the slowdown. Home mortgage debt increased at an annual rate of 6-3/4 percent during the third quarter -- the slowest quarterly growth rate since mid-1998.

By contrast, consumer credit increased at annual rate of 6 percent in the third quarter, faster than in recent prior quarters, which may indicate consumers were turning to their credit cards more frequently to support spending as home equity values slow.

The Fed report showed that the value of real estate held by households rose just $119.2 billion in the third quarter to $23.25 trillion, down from the $265.1 billion by which real estate values increased in the second quarter.

Household mutual fund assets rose $112.1 billion to $5.21 trillion in the third quarter and pension fund assets were up $119.7 billion to $12.83 trillion during the period. (Reporting by Glenn Somerville; editing by Gary Crosse)