Vanishing middle class…..
The wealth of American families plummeted by 38.8 per cent between 2007 and 2010, according to fresh data from the Federal Reserve, highlighting the deep damage inflicted by the housing crash, financial crisis and recession on the economic health of US households.
According to the Fed’s survey of consumer finances, which is released every three years, the median net worth of US families declined from $126,400 in 2007 to $77,300 two years ago, as millions of Americans witnessed a sharp drop in the value of their homes, in many cases their main investment.
The fall in wealth due to the mortgage collapse more than offset the gains of the housing boom. In 2004, family median net worth as measured by the same survey was $107,200, while in 2001 it was $106,100, meaning even much of the benefit of the economic expansion of the 1990s was wiped away.
In its report, the Fed noted that families living in the west with a head of household between 35 and 44 years old bore the brunt of the hit to the net worth, since “housing was a larger share of their assets”.
As their wealth plummeted, many Americans also suffered a steep drop in median income, with unemployment and underemployment rising. According to the Fed study, median income fell 7.7 per cent between 2007 and 2010, a sharp acceleration from a small decline in the previous three years.