In a study (pdf) released today, the Federal Reserve reports that Americans saw a record drop in their wealth between the years 2007 to 2010. Driven primarily by plummeting home values, families' median net worth dropped 38.8 percent, to levels last seen 18 years ago.
"The median net worth, which is the value of assets minus debt, plunged to $77.3 trillion in 2010 from $126.4 trillion in 2007. Net worth in 2010 was at levels last seen in 1992.
"'Although declines in the values of financial assets or business were important factors for some families, the decreases in median net worth appear to have been driven most strongly by a broad collapse in house prices,' the Fed said.
"The survey's findings shine a harsh light on the devastation inflicted on the economy by the 2007-09 recession and could help to explain the frustratingly slow pace of the recovery."
The Washington Post says that this survey is conducted every three years and "one of the most exhaustive looks to date at the greatest economic upheaval in a generation."
The New York Times says the report is "full of grim news." That includes the fact that Americans are saving less for the future and aren't making much progress paying off their debts.
"The share of households reporting any debt declined by 2.1 percentage points over the last three years, but 74.9 percent of households still owe something and the median amount of the debt did not change," the Times reports.