Household wealth down 23% in 2 years - Fed By Charles Riley, staff reporter

NEW YORK (CNNMoney) -- The average American family's household net worth declined 23% between 2007 and 2009, the Federal Reserve said Thursday.

A rare survey of U.S. households, first performed in 2007 but repeated in 2009 in order to gauge the effects of the recession, reveals the median net worth of households fell from $125,000 in 2007 to $96,000 in 2009.

Titled "Surveying the Aftermath of the Storm," the report offers a broad look at how the financial crisis impacted individual households.

It is widely known that the 2008 financial crisis resulted in the vaporization of trillions of dollars in household wealth. But Federal Reserve officials said Thursday the new report offers a look at exactly how hard the recession hit families, and how they reacted.

The numbers paint a stark picture.

Families that owned stock saw their portfolios drop by more than a third to $12,000 from $18,500, on average. The value of primary real estate holdings decreased by an average of $18,700.

And families took on more debt, pushing median total debt levels to $75,600 from $70,300. They also made less money. Median household income dropped to $49,800 from $50,100.

Interestingly, families below the median national income in 2007 actually saw their earnings increase by 2009. Meanwhile, families that started above the national average in 2007 saw their incomes decline.

Families in the top 10% of net worth in 2007 saw their incomes decline by 13% on average, a phenomenon the Fed attributed to large declines in capital gains and in business, farm or self-employment income.

The report also reveals that some families are doing quite well.

"Although over 60% of families saw their wealth decline over the two-year period, a sizable fraction of households experienced gains in wealth," the report says.

But it's hard to pin down what made those families successful. "Shifts in wealth do not appear to be correlated in a simple way with families' characteristics," the authors write.

The report's authors also make the point that Americans appear to be reacting to the recession in a counterproductive way.

"[F]amilies' behavior may act in some ways as a brake on reviving the economy in the short run," the report says.

The data shows that Americans have increased their savings rate across the board, regardless of how they are weathering the storm. That means less money is being pumped into the economy. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed4.30%4.34%
15 yr fixed3.72%3.76%
5/1 ARM4.08%4.26%
30 yr refi4.28%4.31%
15 yr refi3.69%3.73%
Rate data provided
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 24,946.51 72.85 0.29%
Nasdaq 7,481.99 0.25 0.00%
S&P 500 2,752.01 4.68 0.17%
Treasuries 2.85 0.02 0.78%
Data as of 6:50am ET
Company Price Change % Change
Chesapeake Energy Co... 3.06 0.04 1.32%
General Electric Co 14.31 -0.05 -0.35%
Bank of America Corp... 32.17 0.07 0.22%
Ford Motor Co 11.15 0.08 0.72%
Micron Technology In... 60.58 1.74 2.96%
Data as of Mar 16


The European Union has published a long list of American products that it could target if President Donald Trump moves forward with new tariffs on steel and aluminum. More

"It's like competing in an Olympic race wearing lead shoes," Elon Musk, referring to trade rules with China, tweeted to President Donald Trump. More

Good news for procrastinators: You get two extra days to file your federal income taxes. April 15 falls on a weekend and April 16 is a public holiday in the District of Columbia. More