Fed: Crisis Destroyed Two Decades of Wealth

The median American family’s net worth has dropped to early-1990s levels according to the Federal Reserve's Survey of Consumer Finances, which was released Monday. The New York Times reports:

A hypothetical family richer than half the nation’s families and poorer than the other half had a net worth of $77,300 in 2010, compared with $126,400 in 2007, the Fed said. The crash of housing prices directly accounted for three-quarters of the loss.

Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation. …

Families with incomes in the middle 60 percent of the population lost a larger share of their wealth over the three-year period than the wealthiest and poorest families. … Those middle-income families also lost a larger share of their income.