U.S. Household Net Worth Falls 18%

Not very good: The Federal Reserve reported that “Americans’ net worth fell in 2008, erasing four years of gains, as the value of their houses and stock market portfolios decline, according to new data from the Federal Reserve.”

The specifics ain’t pretty:

• Household assets as a whole fell 15% to $65.7 trillion, unadjusted for inflation.

• Household liabilities a declined less than 1% to $14.2 trillion.

• Net worth for households and non-profit groups decreased $5.1 trillion in Q4 2008;

• Real-estate-related household assets declined by $937.1 billion;

• Net worth of American households (difference between assets and liability) was $51.5 trillion, down $11.2 trillion or nearly 18% from 2007.

• Americans’ total wealth is now back to levels prior to 2004.

• Mortgage credit fell to $10.5 trillion, the first decline since the Fed started keeping track in the 1950s.

• Non Mortgage consumer credit rose nearly 2% to $2.6 trillion.

• Household debt increased by 0.5% , 6.25 percentage points less than the 2007 increase.

• Americans’ homeowners’ equity as percentage of the value of their homes fell to 43% in 2008. (Includes both homeowners with mortgages and those who have paid their mortgages off.)

• Americans’ stock market holdings — both direct holdings, mutual funds and retirement plans — fell to $12.1 trillion a year-end 2008 from $20.6 trillion the year before, the lowest level since 1997.

• Total bank deposits rose nearly 5% to $7.7 trillion in 2008.

Makes me think of those Capital One ads: What do you have in your wallet ?

Answer: A lot less than last year  . . .

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Sources:
Q4 2008 Flow of Funds.
Federal Reserve, March 12, 2009
http://www.federalreserve.gov/releases/z1/current/default.htm

See also:
The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble
David Rosnick and Dean Baker
CEPR February 2009
http://www.cepr.net/documents/publications/baby-boomer-wealth-2009-02.pdf

U.S. Household Net Worth Tumbled Last Year
S. MITRA KALITA
MARCH 12, 2009, 5:05 P.M.
http://online.wsj.com/article/SB123687371369308675.html

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