American families got poorer in the first decade of the 21st century.
The wealth of the median U.S. household — the family at the middle of the middle class — fell from $106,000 in 2001 to $77,000 in 2010.
The fall was driven, not surprisingly, by the housing bust. Homes are the single largest asset for many families, and they represent a particularly large share of wealth for the middle class.
What's more, homes tend to be highly leveraged. People borrow lots of money to buy them. That means huge gains when prices rise — and massive losses when they fall.
Median wealth fell for families across the income distribution. Poor, middle class, and upper-middle class families all got poorer. The only group that saw a rise in was families with incomes in the top 10 percent. Homes tend to make up a smaller part of net worth for those families.
The figures are adjusted for inflation and taken from a Fed report (PDF) out today. Wealth is defined as net worth, or assets minus liabilities.
Copyright 2023 NPR. To see more, visit https://www.npr.org.