The recession helped to wipe out nearly two decades' accumulation in families' median net worth, according to new data.
The Federal Reserve's latest Survey of Consumer Finances, a triennial survey of American families, said U.S. families' median net worth fell by 38.8 percent from 2007 to 2010, or from $126,400 to $77,300. The Fed report says that the levels are near where they were in a 1992 survey. Average net worth is much higher than the median, at $498,800, pulled upward by higher-net-worth people at the upper end of the spectrum. Families' average net worth fell by 14.7 percent.
The declines come in stark contrast to the two prior surveys. From 2004 to 2007, median net worth grew by roughly 18 percent, and from 2001 to 2004, it was nearly flat, growing by around 1 percent.
Housing was a key factor in driving net worth downward. Median home equity—the difference between a home's value and debts secured against it—fell by 42.3 percent over the period studied, from $95,300 in 2007 to $55,000 in 2010, for families with home-secured debt.
However, those losses were not even; certain states bore the brunt of the home price declines, as the report notes.
"The decline in house prices was most rapid in the states where the boom had been greatest," says the report. "For example, California, Nevada, Arizona, and Florida saw declines of 40 to 50 percent," the report states, while Iowa saw a decline of only about 1 percent."
Of course, it wasn't just dips in home values that took a bite out of Americans' economic well-being. Incomes fell, as well: median, inflation-adjusted family income fell 7.7 percent between 2007 and 2010.
That burden also fell unevenly by several measures: for nonwhites or Hispanics it dropped by over 10 percent, while for white non-Hispanics it fell by less than 3 percent. Likewise, self-employed workers suffered. Families headed by self-employed workers saw their median incomes drop by nearly 19 percent, as opposed to around 6 percent for families headed by workers employed by someone else.
Those cumulative blows to families' income and wealth may make for longer-term financial problems. The share of families that saved in the preceding year has also declined, from 56.4 percent to 52 percent—the lowest levels since the survey began in 1992. Additionally, the share of families with retirement accounts fell from 53 percent in 2007 to just over 50 percent in 2010.
There were a few bright spots in the area of household debt. The survey found that families have begun digging out of the red by several measures. While 46.1 percent of households carried credit card debt in 2007, with a median balance of $3,100, only 39.4 percent carried such debt as of 2010, with a much lower median balance, of $2,600.
Likewise, 74.9 percent of households carried any debt in 2010, a small decline down from 77 percent in 2007.
Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at firstname.lastname@example.org.