Federal Reserve: Americans lost one-third of wealth during Great Recession
A study by the Federal Reserve found that American families lost more than a third of their wealth during the Great Recession.
The median net worth of American families dropped by an average of 38.8% between 2007 and 2010, according to the Federal Reserve’s report on “Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances.”
“Although declines in the values of financial assets or business were important factors for some families, the decreases in median net worth appear to have been driven most strongly by a broad collapse in house prices,” stated the report released on Monday.
The Federal Reserve found that people who invested most of their money in their homes saw the biggest decline in their wealth when the housing market crashed.
Among those most affected are Americans between ages of 35 to 45 who, on average, saw their assets plummet by 54.4%, and families that live in the West, where the housing crash wiped out 55.3% of the average household’s net worth.
In addition, the report also found that the median income for most Americans dropped by 7.7% between 2007 and 2010. Those who are highly-educated, under the age of 55, living in the South and the West saw the “most pronounced” drop in earnings.
- Federal Reserve: Changes in U.S. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances – June 2012 (PDF)
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