Household Wealth Trends in the US, 1983 to 2010

Abstract

This chapter investigates wealth trends from 1983 to 2010. Median wealth plummeted between 2007 and 2010 by 44%. The inequality of net worth, after almost two decades of little movement, was up sharply between 2007 and 2010. Relative indebtedness continued to expand for the middle class. The sharp fall in median net worth and the rise in its inequality from 2007 to 2010 are traceable to the high leverage of middle-class families and the high share of homes in their portfolio. The racial and ethnic disparity in wealth holdings, after remaining more or less stable from 1983 to 2007, widened considerably between 2007 and 2010. Hispanics, in particular, got hammered by the Great Recession in terms of net worth and net equity in their homes. Households under age 45 were also pummeled by the Great Recession, as their relative and absolute wealth declined sharply from 2007 to 2010.