Posted By RichC on June 11, 2012
How challenging has it really been for families these past few years?
Well if you’re in college or just starting out and able to pay the bills, finding work or able to keep borrowing for school … then you might not notice much (can you tell I’m talking with my college age son while he is home this summer?) If you’re a homeowner or someone trying to create equity, then it is very noticeable. The numbers crunchers at the Federal Reserve as reported by a WSJ blog post points out just how much impact is being felt … and probably for years to come.
Families’ median net worth fell almost 40% between 2007 and 2010, down to levels last seen in 1992, the Federal Reserve said in a report Monday.
As the U.S. economy roiled for three tumultuous years, families saw corresponding drops in their income and net wealth, according to the Fed’s Survey of Consumer Finances, a detailed snapshot of household finances conducted every three years.
Median net worth of families fell to $77,300 in 2010 from $126,400 in 2007, a drop of 38.8%–the largest drop since the current survey began in 1989, Fed economists said Monday. Net worth represents the difference between a family’s gross assets and its liabilities. Average net worth fell 14.7% during the same three-year period.
Much of that drop was driven by the housing market’s collapse. Families whose assets were tied up more in housing saw their net worth decline by more. Among families that owned homes, their median home equity declined to $75,000 in 2010, down from $110,000 three years earlier.