June 12, 2012- The average family in the United States saw its net worth drop by nearly 40% from 2007 to 2010 said a report released by the Federal Reserve on Monday. The huge plummet in average net worth was from $126,400 during 2007 to just $77,300 for 2010. The drop indicated the recent recession wiped out nearly 18 years of investment and savings by families.
The study by the Fed is the Survey of Consumer Finances. It offers details about income, debt, savings along with investments and assets American families own. The results are over a year old, but highlight the huge deterioration in finances in the home of Americans that was brought on by the 2007 financial crisis and the recession that followed.
A good part of the drop in family’s net worth, to levels not heard of since 1992, was attributed to a marked decline in the values of homes. Families in the south and west where the housing values suffered the most, suffered more than people in other parts of the country.
Adding to the woes was the income levels that fell during the period, with the average income before taxes falling by nearly 8%. The loss of net worth and savings has impacted the amount of savings, as the percentage of Americans who saved in the prior year dropped from 56% in 2007 to just 52% in 2010.