US median family net worth down 40 percent

[elessar78]

Fed report says US median family net worth fell nearly 40 percent from 2007 to 2010

By Associated Press, Published: June 11

WASHINGTON — The Great Recession shrank Americans’ wealth so much that in 2010 median family net worth was no more than it had been in 1992 after adjusting for inflation, the Federal Reserve reported Monday.

Median net worth declined from $126,400 in 2007 to $77,300 in 2010, a Fed survey of family finances found. The median marks the point where half had more and half had less. The recession officially began in December 2007 and ended in June 2009.

Fed report says US median family net worth fell nearly 40 percent from 2007 to 2010 - The Washington Post

I thought this was a misleading report. Most of net worth is based on equities and home value right? Considering 2007, the stock market and home prices in most of the country were over-inflated.

[Mjenn]

That was my first thought, too. Net worth is based on home equity, which was terribly inflated in 2007-2008, so not a huge surprise that when the bubble burst, so did net worth. That said, I would be interested to see a comparison of how much percentage wise a median income family lost compared to a top 10% wealthy family net worth declined. I think that might tell us a bit more....

[MonkeyMama]

Yes, the article said that a lot of it was home equity.

& then it says it might take 5 years to recover.

Our home equity went up 100% "overnight" and then it went down 50% "overnight" to put us slightly lower than where we started. I am not expecting my home to double or triple its value in the next 5 years to get back to where we were. That will probably *never* happen. 5 years? Give me a break!

It just continually amazes me how the losses are yammered on about, with no mention of the giant/fast run up that led to those losses. Some lost, but the majority did not put their life savings in real estate at the peak. Most of the people I know who bought at the peak put $0-down, for example (& have long since foreclosed).

The article does talk about loss of income, too.

[JoeP]

It must be our region of the country is unaffected; we have almost no foreclosures, housing demand has been and remains high, new neighborhoods are still going up, our assessed value has not moved, and house sale prices are steady. We could sell our house, purchased at $173k in 2001, for close to $300k now.

[Joan.of.the.Arch]

JoeP, have incomes gone up in parallel with house prices since 2001? If not, I suspect you are lving in a bubble still.

[JoeP]

JoeP, have incomes gone up in parallel with house prices since 2001? If not, I suspect you are lving in a bubble still.

I can't speak for others, but our household income has increased between 2% and 5% per year since 2001. Housing prices have been increasing as well, but I don't know the rate of increase, or if it has been increasing every single year.