Drop in Net Worth Also Accompanied By Drop in Income
According to the US Federal Reserve, the median American family saw their net worth drop by nearly $50,000 in just three years.
In 2007, the median American family had a total net worth of $126,400. As we all know, the "Great Recession" started in December of 2007, house prices tanked, the markets crashed and a startling amount of global net worth was wiped out.
Just how bad was it?
According to the Fed, the median US family had a total net worth of $77,300 in 2010, down nearly $50,000 from 2007. The majority of this decrease (approximately 75%) was the result of plummeting house prices. The Fed estimates that the median amount of home equity dropped to just $75,000 in 2010, down from over $100,000 in 2007.
To make matters worse, this drop in household net worth was also accompanied for a sharp drop in income, as the median American family saw their earnings fall by 7.7% between 2007 and 2010.
Source: FederalReserve.gov - Changes in U.S. Family Finances From 2007 to 2010: Evidence from the Survey of Consumer Finances
Filed under: The Economic Meltdown