April 15, 2010
The wealth owned by households took a big hit during the recession. The Federal Reserve recently released an update on our wealth. Has it made a comeback?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"We now have statistics that go through the end of 2009. The good news is that we saw our wealth continue to rebound. It took a big hit during the recession. We saw wealth continue to rebound, but it is still off. It is off 16 percent from pre-recessionary levels.
"Some other items that came out of that recent survey: Households continue to pay down on their debt. In fact, household debt is now down 5 percent from its peak -- first time in history we have ever reduced debt that much.
"And we have also seen modest improvements in our wealth that is embodied in our home. In fact, owner equity as a percent of the homes value rose to 38 percent; it was in the low 30s, it is now 38 percent, but that is still well below the 60 percent level that we had before the recession.
"So we are making improvements, and we are seeing a rebound in household wealth. But we are certainly not back to where we were."
Posted by deeshore at April 15, 2010 08:28 AM