WASHINGTON (Reuters) - The net worth of U.S. households rose in the first quarter as a boost in real estate values offset a fall in stock market prices, a report by the Federal Reserve showed on Thursday.Families' net worth increased to $88.1 trillion over the quarter, up from a revised $87.3 trillion in the previous period.

The S&P 500 <.SPX> dropped almost 10 percent from January through mid-February on fears over China's economic rebalancing, a global growth slowdown and low oil prices.

It had almost recouped the losses by the end of March and stock prices have since risen further, suggesting that households will see their net worth continue to rise through the second quarter.

Household borrowing rose at a 2.7 percent annual rate, the report also showed, down from 3.7 percent growth in the fourth quarter of 2015.

The housing market has continued to gain steam so far this year and consumer spending has been strong, underpinned by an economy near full employment.

However, the U.S. central bank is expected to decide against an interest rate increase next week amid a sharp weakening in job gains last month and renewed global risk fears.

(Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)