Economics: Recession Reduced Americans Net Worth 20 Percent

The Federal Reserve reported that the average net worth of American households fell 22.7 percent since the recession began in December 2007 through October 2008, when the report was prepared. Lower housing values and a plunging stock market combined to take a big bite out of American’s net worth.

However, it appears that the recession has had a much bigger impact on the wealthy, when the Fed’s numbers are more closely examined. If the values of second homes and businesses, typically owned by wealthier Americans are factored out, then the average household net worth declined by only 12%.

See Recession Reduces Americans Net Worth 20 Percent February 13th, 2009.

A Fed study of U.S. family finances estimates median family net worth fell by 17.8 percent [through October 2008] while mean net worth declined by 22.7 percent.

Relative to 2004, median net worth slipped by 3.2 percent while mean net worth tumbled 12.7 percent.

See U.S. family net worth down since 2007: Fed by Reuters, Feb 12, 2009.