Family net worth falls by 40%
In just 3 years, median household wealth took a deep dive -- from $126,400 to $77,300, mostly because of the housing crash.
The Federal Reserve's new Survey of Consumer Finances -- an important and extremely detailed report issued every three years -- confirms what many American families already know: The Great Recession walloped the middle class.
This description of the report in The Washington Post is chilling:
Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.
Post continues below.Consider:
- Median net worth dropped from $126,400 in 2007 to $77,300 in 2010 (adjusted for inflation). "That puts Americans roughly on par with where they were in 1992," says the Post.
- In that same time, median household income fell from $49,600 to $45,800.
- The damage to the middle class was worse than to people on either end of the income scale. The New York Times explains:
One basic reason for this disproportion is that the wealth of the middle class is mostly in housing, and the median amount of home equity dropped to $75,000 in 2010 from $110,000 in 2007. And while other forms of wealth have recovered much of the value lost in the crisis, housing prices have hardly budged.
Among the report's other depressing stats:
- From Bloomberg: "The proportion of families with retirement accounts decreased 2.6 points to 50.4% during the period, wiping out much of the 3.1 percentage-point increase over the prior three years, the report said."
- The percentage of families adding to savings fell from 56.4% in 2007 to 52% three years later.
In 2010, 19.2% of families had education debt, up from 15.2%. "Among families with education debt, the mean increased 14.0% (from $22,500 in 2007 to $25,600 in 2010), while the median rose 3.4% (from $12,600 in 2007 to $13,000 in 2010)," the report said.
"The Fed noted that education loans made up a larger share of the average family's obligations than loans to buy automobiles for the first time in the history of the survey," The New York Times said.
- Bing: Median vs. mean
Many families with credit cards do not carry a balance. Of the 68.0% of families with credit cards in 2010, only 55.1% had a balance at the time of the interview; in 2007, 72.9% had cards, and 61.0% of these families had an outstanding balance on them. The number of credit cards held by families also decreased. In 2007, 35.0% of families held four or more cards, and that level of ownership fell to 32.7% by 2010. Between 2007 and 2010, the fraction of families with three cards fell from 12.1% to 10.6%, the fraction with two cards fell from 12.7% to 12.2%, and the fraction with one card fell from 13.1% to 12.5%.
Does the content of the report match your life experience in those critical years?
More from MSN Money
Now, I wonder if we can begin to predict the roller coaster DOW? - Let's see, it was way up today, so I'm going to guess it will go down tomorrow.
the main problem is the unemployment! jobs for people to be able to earn a living!
when a crisis gets to the point of causing everything to cra**** time to fix the problem.
LEAVE THE TAX CUTS IN PLACE FOR ANOTHER YEAR OR TWO do not cut spending as much as planned this next year, only cut spending a little, and try to eliminate waste, then require everyone to pay cash money on the budget deficit, millionaires, banks, oil companies, insurance companies drug companies, etc, everyone on a sliding scale, to raise two trillion dollars, really fast, and pay the budget deficit off in full, use the money left over, to do infrastructure, in the country, then pay all the unemployed around 17 million of them 600.00 dollars per week tax free for two years, and let them find work, but tax the work they find, then take 28% from the top of the 600.00 dollars, and give that to the states every week for two years, this will stabilize the states, and create jobs, and bring in tax revenues, cut these 17 million off of any subsidies for two years, do this even if the debt ceiling needs to be raised to do it the economy will take off like a rocket, the debt will come down, because of the millions of people working, and paying taxes, the country will save on everything, food stamps, etc. and lower crime, it would help to fund medicare, and SS, the soldiers returning could all find work, the ones paying the cash could get tax breaks to get a lot of their money back but they should be proud to refuse those tax cuts, as part of doing their patriotic duty, they would not suffer any hardship for doing it, [example if a millionaire paid fifty thousand dollars, or a billionaire paid a million dollars, a bank, , the country is facing a crisis the congress, and the President should do this and worry about elections later!!! It would probably help the real estate markets to, I know small business would recover, manufacturing would go through the roof, what are we waiting for we have the means to fix this problem overnight???
If 2000 people banned together, and started pooling 500 dollars per month it would be easy to buy the land, build warehouses, stock them with survival supplies, and build housing, and even some luxury things, like swimming pools, tennis, basket ball courts, a club house, 500.00 by two thousand would be a million per month, it would not take long to pay for all this, and try to prepare for a crisis if it were to come, the worst that could happen is they would own it, and not need it, but it would be good to have it if needed, it seems like it would be interesting anyway!!!
I think it was on [discovery] about the doomsday people!!!
given that obozo wants to destroy america...he was being honest with his comment that the private sector is doing well...
Why say anything about peoples net worth? why should anyone be concerned ?
Why give advice to people as to what they should do to prepare for the future?
When it happens to these people its important, when it happens to others its not important!
who ask anyone ? when people are up and everything is going their way they seek privacy, I've got mine type attitudes, now its what happened to mine attitudes, waiting for a hand out, well respect the privacy of others, they don't want to know how much someone lost, get up and start over, like others did for years while most walked by and could not care less, or drove by in their luxury cars, and did not even notice!!!
How many people squandered their money for years? now want a hand out?
Eggs in one basket...
Untrue. People invested in homes because banks made mortgages on them based on solid evidence of value and sustainability as collateral. There is a constant attempt to point the finger at the borrower homeowner. Sorry... this is entirely the fault of bankers and greed. IF, in 2008, We the People had a real Congress that recognized- what the future would like like with re-occurring irresponsible lending and stopped it, by now here in 2012, we would just be repairing the economic damage. Instead, the adverse agenda of the Party of No and the lame attempts by Obama's team to help borrowers but not fix the employment issues first has prolonged repair while exponentially expanding the damage. JOB RECOVERY as a Stimulus could begin that healing while nipping a lot of future catastrophes, but without a cooperating government, we stand no chance of it.
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