Pew Research Center analysis found Generation X was the only generation to recover its wealth following the housing crash between 2007 and ...
 |
| Pew Research Center analysis found Generation X was the only generation to recover its wealth following the housing crash between 2007 and 2010. File Photo by Valeri Ptapova/Shutterstock |
By Daniel Uria, UPI
Members of Generation X were the only generation to recover wealth lost during the Great Recession, Pew Research Center analysis of Federal Reserve data found.
Gen Xers experienced the greatest decline in home equity and net worth among any generation between 2007 and 2010, but saw the median net worth of their households rise by 115 percent as of 2016 and their home equity levels double since 2010, according to the research.
"Through first-hand experience Gen Xers learned the painful consequences of economic contractions," Pew senior researcher Richard Fry wrote. "At least in terms of wealth, they are now better positioned to weather the next one."
[post_ads]The median net worth of Gen X households declined 38 percent from $63,400 the start of the Great Recession in 2007 to $39,200 in 2010 after it ended and the median home equity of Gen X homeowners dropped 43 percent from $66,000 to $37,600 in the same time period.
During this period members of Generation X were between the ages of 27 and 42, meaning they were newer to the housing market and more likely to buy houses at peak prices and take more mortgage debt to do so, Pew said.
"About half of the assets they owned were in the value of their primary residence, whereas households headed by a member of the Baby Boom or Silent generation had a higher share of their money in financial assets such as checking or retirement accounts," Fry wrote.
Comparatively Baby Boomers saw their net worth drop 26 percent and their home equity decline by 28 percent, while members of the Silent Generation saw a 14 percent decline in net worth and a 15 decrease in home equity.
Millennials -- the oldest of whom were 26 at the start of the Great Recession -- experienced losses in employment and earnings, but were just beginning to form households and accumulate their own wealth, leaving them with little wealth to lose.
However, a number of factors allowed members of Generation X to fully recover their wealth since the Great Recession. The net worth of an average Gen X household reached $84,200 by 2016, surpassing its pre-Great Recession number of $63,400.
[post_ads_2]
"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 Gen X," Fry wrote.
Their home equity doubled since 2010 due to lender foreclosures appreciating home values and mortgage modifications and their financial assets assets also nearly doubled from $11,300 in 2010 to $21,600 in 2016, while financial assets for Baby Boomer and Silent Generation Households remained the same.
Additionally, Gen Xers remain in prime working age and their median adjusted household income increased more than 20 percent to $73,200 in 2016.
"Gen X's ability to rebuild its wealth may reflect its relatively robust household income growth since 2010," Fry wrote. "The oldest Gen Xer was 51 as of 2016, meaning that Gen X workers are still approaching their peak earning years. The number of Gen Xers in the labor force has remained stable since 2008, whereas the Boomer and Silent labor force has shrunk through retirements and deaths."
COMMENTS