Legal News

New Report Shows Family Net Worth Fell 40 Percent During the Recession
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

The Survey of Consumer Finances, a three-year study of America’s finances, has been released Monday, confirming what so many of us have felt and experienced: between 2007 and 2010 the family’s average net worth has slipped about 40 percent, mostly due to house depreciation.

The latest depression, resulting mostly from the housing bubble’s burst, has lead the unemployment to jump from 5 percent to 9.5 percent, while meanwhile people are on average earning 7 percent less than before.

But the biggest loss of the median net worth–a sum calculated by combining the value of homes, automobiles, and stocks, subtracting debt–was due to home depreciation. Houses depreciated by 42 percent between 2007 and 2010, to $55,000.

  
What
Where


The report also noted that families have been taking out more education loans, and families are up from 7 to 11 percent with those who report they were at least 60 days late paying a bill.

“It’s hard to overstate how serious the collapse in the economy was,” said Mark Zandi, the chief economist for Moody’s Analytics. “We were in free fall.”

Said the fed: “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 the broad collapse in house prices”–and the families specifically effected were the middle class.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Most drastically hit were the middle class in the West. Median net wealth “fell dramatically in families living in all regions of the country, but especially for those living in the west — a 55.3 percent decline,” the Feds reported. “This pattern reflects the effect of the collapse on housing values in several parts of the West region. Median wealth in every other region fell 28.2 percent or more.”

And, as we already know, the culprit was rhetoric, spread by politicians and media, that homes were the safest investment, and that homes in the West were sure to appreciate. This mindset, coupled with a reduction of lending standards in banks, opened us up for the housing bubble, which we will yet be recovering from for some time.





 

RELEVANT JOBS

Executive Director, MDC Foundation

USA-FL-Miami

All applications must be submitted online at http://www.mdc.edu/jobs/ Job Opening ID: 1001435  ...

Apply now

Legal Assistant

USA-WV-Huntington

Qualifications High school or equivalent (Preferred) Microsoft Office: 1...

Apply now

Experienced Municipal/Land Use Attorney

USA-NY-White Plains

Mid-sized White Plains law firm seeks attorney with minimum 4-7 years’ experience in municipal...

Apply now

Staff Attorney - Eviction Prevention Unit | Multiple locations in WA

USA-WA-Wenatchee

Northwest Justice Project (NJP) is a not-for-profit statewide law firm that pursues its mission of C...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Commercial Litigation Attorney

USA-CA-Los Angeles

Los Angeles office of a BCG Attorney Search Top Ranked Law Firm seeks commercial litigation attorney...

Apply Now

SEC Attorney

USA-MA-Waltham

Waltham office of our client seeks SEC attorney with 3-5 years of experience to assist with all aspe...

Apply Now

Mid to Senior-level Real Estate Associate Attorney

USA-FL-Miami

Miami office of a BCG Attorney Search Top Ranked Law Firm seeks mid to senior-level real estate asso...

Apply Now

SEARCH IN ARCHIVE

To Top