by Ryan Streeter on July 27, 2014. Follow Ryan on Twitter.
It’s been a busy few weeks coupled with some vacation time, so I’ve been away from this for awhile.
What has the trend in household wealth been in the past decade?
This study (pdf) by the Russell Sage Foundation finds that for the median household – i.e., the household above and below which there are an equal number of households – net worth declined from $87,992 in 2003 to $56,335 in 2013 (comparisons in 2013 dollars) – or a decline of 36%.
The authors define household wealth in the standard way: the total value of all financial and real assets minus any debt.
This decline is clearly driven by the collapse in housing values. To drive this point home a bit further, you can see how more affluent households – whose wealth is not tied up primarily in homes but in equities and other assets – have rebounded:
Everyone lost wealth between 2007 and 2009, but the 90th and 95th percentiles were still better off in 2009 than they were in 2003, whereas the 50th percentile was already significantly below where it was in 2003.
These data reinforce the conclusions by some that the American Dream going forward should be bound together more with the capital and other gains that come through entrepreneurship and saving than with homeownership.