The average American family lost 38.8 percent of its wealth from 2007 to 2010, with the biggest losses concentrated among households with the most assets tied to their homes, a Federal Reserve study shows.
Median net worth declined to $77,300 in 2010, an 18-year low, from $126,400 in 2007, the central bank said in its Survey of Consumer Finances. Mean net worth fell 14.7 percent to a nine-year low of $498,800 from $584,600, the central bank said today in Washington.
“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,” Fed economists wrote in the report released today.
The Fed has taken unprecedented steps to boost the economy as it battled the recession that lasted from December 2007 to June 2009, the longest and deepest economic contraction since the Great Depression. The S&P/Case-Shiller United States Home Price Index fell 23 percent in the three years through December 2010. The Standard & Poor’s 500 Index dropped 14 percent in the same period.