Homeownership Makes Most Americans Poorer | Bedford Corners Real Estate
From 2009 to 2011, the mean net worth of the top 7 percent of American households rose by 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent, largely because wealthy Americans have the bulk of their holdings in stocks and bonds while most Americans rely heavily on home equity for their personal wealth.
According to a Pew Research Center analysis of newly released Census Bureau data, from 2009 to 2011, the mean wealth of the 8 million households in the more affluent group rose to an estimated $3,173,895 from an estimated $2,476,244, while the mean wealth of the 111 million households in the less affluent group fell to an estimated $133,817 from an estimated $139,896.
Because of these differences, wealth inequality increased during the first two years of the recovery. The upper 7 percent of households saw their aggregate share of the nation’s overall household wealth pie rise to 63 percent in 2011, up from 56% in 2009. On an individual household basis, the mean wealth of households in this more affluent group was almost 24 times that of those in the less affluent group in 2011. At the start of the recovery in 2009, that ratio had been less than 18-to-1.
During the period of the study, the S&P 500 rose by 34 percent (and has since risen by an additional 26 percent), while the S&P/Case-Shiller home price index fell by 5 percent, continuing a steep slide that began with the crash of the housing market in 2006. Housing prices have slowly started to rebound in the past year but remain 29 percent below their 2006 peak.
Comments