WASHINGTON, Dec 10 (Reuters) - The wealth of U.S. households hit a record $123.5 trillion in September as rising stock and home values and an accumulating buffer of cash defied expectations of a pandemic-related crash in household finances, according to new data from the U.S. Federal Reserve. The Fed’s latest report on U.S. household, business and government financial accounts covers the period from July through September, and thus looks backward during a period of potential volatility for family balance sheets. Millions may be losing unemployment insurance in coming weeks, and a steady flow of people into unemployment insurance programs suggests available cash balances may have been tapped through the fall to cover expenses. The release also does not give information on how available cash was distributed between higher-wealth families and poorer ones. But as of September at least, well into a period when initial rounds of pandemic-related benefits were beginning to expire, U.S. households on the whole were holding their own. Rising equity markets added $2.8 trillion to household assets, and rising real estate values added around $400 billion. Perhaps most notable at a time of such high unemployment, balances in cash, checking accounts, and savings deposits rose a combined $473 billion, suggesting that the broad “spend down” of pandemic benefits had, as of September, not yet begun. Household debt rose at an annualized rate of 5.6% compared to 0.8% in the second quarter, driven mostly by home mortgage borrowing. Business debt fell at a 0.9% annualized rate after a rapid 14.2% pace of growth in corporate credit during the April to June period - borrowing that took place as companies drew on credit lines and Federal Reserve programs as a precaution against the pandemic. Growth in government borrowing also slowed to a 9.1% annualized rate, compared to the 58.9% rate in the second quarter, when the CARES Act coronavirus relief package was funded to provide money for enhanced unemployment benefits and the Paycheck Protection Program of loans to small businesses.