MarketWatch, July 24, 2018: Only one generation of Americans has fully recovered from the housing crash
The generation that likely had the most to lose during the crash in the housing market appears to have gained the most household wealth since 2007.
During the economic downturn a decade ago, Generation X homeowners — born between 1965 and 1980 — experienced the largest decline in home equity, according to a new report by the Pew Research Center, a Washington, D.C.-based think tank. Home equity for that generation of homeowners fell 43% from $66,000 in 2007 to $37,600 in 2010. The median value of the financial assets owned by Generation X households fell 20% from 2007 to 2010.
Since 2010, the median net worth of Generation X households has risen 115% and, since 2016, the net worth of a typical Gen X household had surpassed what it was in 2007 ($84,200 versus $63,400). “As of 2016, the median wealth of households headed by Boomers and the Silent Generation remains below 2007 levels, though their household wealth still exceeds that of Generation X,” wrote Richard Fry, a senior researcher at Pew.
“Wealth or net worth — the difference between the value of a household’s assets and debts — is an important dimension of household well-being because it is a measure of a family’s nest egg, resources that can sustain members through job layoffs or emergencies as well as provide income during retirement,” Fry writes. “For many American households the bulk of their wealth is in their home, and this was especially the case for households headed by Gen Xers in 2007.”
Generation Xers were hit hard during the Great Recession. From 2007 to 2010, the median net worth of Gen Xers fell by nearly half (45%), according to Pew, with declining home equity accounting for much of the drop. However, Gen Xers are in their late 30s and 40s now, and they are — at least in theory — nearing their peak income and spending power. Gen Xers make more money than the average millennial, by virtue of being older and farther along the pay scale.
