Monday, June 11, 2012

Households' net wealth dropped 39% from 2007 to 2010

The Washington Post reports on newly released figures from the Federal Reserve that show that median household net worth dropped by 39 percent from 2007 to 2010.
The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes.

The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.

Sadly, there's little reason to think that the wealth figures have improved much since 2010. Although the stock market has recovered, housing prices continue to drift down. Suppressed wealth will continue to be a drag on the economy.