Net Worth Implosion: It’s Not Just HousingJune 19, 2012
Americans’ net worth collapsed in recent years, but don’t blame the housing market for it all.New Census Bureau data shows that median household net worth, excluding home equity, fell by 25% between 2005 and 2010. That decline was driven largely by the plummeting stock market, which devastated Americans’ portfolios and retirement accounts.
Overall, median household net worth declined 35% to $66,740 in 2010.
The median worth of stock and mutual fund portfolios fell 33%, while the median home equity value dropped 28%.
“One of the significant factors is housing, of course, but it’s not that alone” said Alfred Gottschalck, an economist with the Census Bureau. “It’s how business conditions affect stock and retirement accounts.”
The estimates are generally in line with what other government reports have found. Last week, the Federal Reserve released its triennial study that showed median family net worth overall dropped nearly 40%, between 2007 and 2010. The Fed study surveys a smaller number of people.
The Great Recession — including the housing and stock market collapses — wiped out nearly 30 years of net worth gains for the typical household.
“The median household is no wealthier than they were in 1984,” said Scott Winship, economic studies fellow at Brookings Institution.