Median Household Wealth Takes Big Dip
Median Household Wealth Takes Big Dip
From 2007 to 2010, American households lost nearly 39 percent of their wealth, reaching 1992 levels (when adjusting for inflation), the Federal Reserve reports.
How much households were affected depended on how they spread out their investments, where they lived, and how much they earned, analysts say.
"Richer people owned more bonds that didn't get killed," Scott Hoyt, an economist at Moody’s Analytics, told USA Today. "For middle-income households, their primary asset is their house, and the government stimulus backstopped incomes at the low end."
Americans lost about $7 trillion in home equity during the housing crisis, starting in 2006, the Fed notes.
The overall losses in median households’ wealth wiped out any gains households that had been seen in the late 1990s during the technology and Internet boom and the post-2000 housing boom, the Fed noted in its report.
While incomes started improving somewhat in 2011, economists note that incomes began regressing again this year.
"Incomes went down more during two years of this recovery than during the recession itself," Gordon Green, co-founder of Sentier, told USA Today. "I don't think we've seen anything like this."
Source: “Fed: Recession Kicked Median Household Wealth to 1992 Level,” USA Today (June 11, 2012)
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