Changes in Household Net Worth from 2005 to 2010

Written by: Alfred Gottschalck and Marina Vornovytskyy

Household net worth or wealth is an important defining factor of economic well-being in the United States.  In times of economic hardship, such as unemployment, illness, or divorce, a person’s or household’s financial assets (e.g., savings accounts) are an additional source of income to help pay expenses and bills.  For individuals and households with a householder 65 years and older, wealth is also an important source of post-retirement income.

For all households, median household net worth decreased by 35 percent from 2005 ($102,844 [+/- 2,606]) to 2010 ($66,740[+/- 1,955]) (All comparisons are significant at the 90 percent level.  All dollar figures are in 2010 constant dollars). This decrease in median household net worth reflects the declines in housing values and stock market indices. However, excluding home equity, median household net worth increased by 8 percent from 2009 ($13,859) to 2010 ($15,000).

Compared with those who are older, the young have limited income or savings to acquire various assets, accumulate wealth, and diversify their wealth holdings. Between 2005 and 2010, median net worth decreased for all age groups but more for older householders than for younger ones.  For householders 65 and older, median net worth was equal to $195,890 in 2005 and $170,128 in 2010; for householders under 35, median net worth was equal to $8,528 in 2005 and $5,402 in 2010. When looked at in percentage terms, the story is quite different (see Figure 1).  Median net worth decreased by 37 percent for householders under age 35 compared with a 13 percent decrease for householders 65 and over. Thus, even though the 65 and over population lost more net worth in absolute terms, the younger age groups were disproportionately affected in terms of the share of net worth lost. The group with the largest decrease in percentage terms was the 35- to 44-year-old group, whose net worth decreased by 59 percent.

Figure 1: Percent Change in Median Net Worth of Households, by Age of Householder, from 2005 to 2010

Source: U.S. Census Bureau, Survey of Income and Program Participation 2004 and 2008 Panels

From 2005 to 2010, all educational attainment groups experienced decreases in their median net worth. For example, those with a high school diploma saw their median net worth decrease by 39 percent, and those with a bachelor’s degree saw their median net worth decrease by 32 percent. At the same time, higher levels of educational attainment continued to be associated with higher levels of net worth. In 2010, those with a graduate or professional degree had a median net worth of $245,763, while the median net worth of those with a high-school diploma was $42,223. Over the past decade, those with higher levels of educational attainment also fared better than those with lower levels of educational attainment (see Figure 2).  In 2000, those with a bachelor’s degree had a median net worth value that was 2.4 times as large as those with a high-school diploma; by 2010, this number had risen to almost three and half times as large. The same pattern can be seen when examining the graduate or professional degree to high school diploma ratio; this ratio has increased from 4.3 to 5.8 over the period of 2000-2010.

For additional wealth statistics by select demographic and economic characteristics, please see

Constant Dollars definition

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9 Responses to Changes in Household Net Worth from 2005 to 2010

  1. Michael L. Reynolds says:

    Thank you for your work.

  2. Andrey Repnitsky says:

    It would be nice if you show the comparison between wealthiest and others: the population is very different, and want to know about those changes as well! We want to know, for example, if the richest “1%” of our population is also struggling with income, and how it is going for every class in our country not only during this recession, but also during long period of time…
    Thank you in advance!
    Sincerely, Andrey Repnitsky.

    • Gene Kailing says:

      I have seen statistics that show the incomes of the wealthy (separate from net worth) decline more during recessions than for other income levels. Incomes for poorer individuals and families actually go up during recessions.
      I suspect the wealthy tend to be hit harder by recessions versus the less afluent, but that most of the “1 percent” don’t “suffer” as a result. Would Andrey prefer they suffer along with less afluent?

  3. Tommy Boy says:

    Question – In the last desplay RE networth for each level of education. I get it, the more you spent on an “education” the more money that is in your pocket. But did you take into account the age disparity? The older you are, the longer you had to make money, save, compound interest.. just a gut feeling that the high schoolers are on average a bit younger than the grad students..

    But then yea the grad student today will land a 50k – 250k job that helps too. Just curious if the age is being weighted in your numbers?

  4. Julia Cohen says:

    Question: What percentage of Americans have a net worth above $5,000,000? What percentage above $2,500,000? If you could let me know, I would greatly appreciate.

  5. Pingback: Members Of Congress Are Richer Than Ever | Political Ration

  6. Albatross says:

    If you rotated Figure 1 90 degrees counterclockwise it would be a more compelling picture of our economic plight. People don’t seem to grasp that WE ARE GETTING POORER – maybe a diagram that looks like a picture of a deep hole would help.

  7. Vj Laxmanan says:

    I have a question about another Household Wealth 2000-2011 with Adam Smith as a third co-author.

    I find the following statement on page 2.

    Between 2000 and 2011, U.S. aggregate net worth increased from $28.9 trillion to
    $40.2 trillion.

    I am curious how these aggregate net worths were arrived at. I checked the number of households data and the median and mean net worths for each household, for these two years (from 2011 US Census Bureau Current Population Report, P60-243, Table A-1). When I multiply the number of households by the mean net worth I get $8.44 trillion for 2011 and $8.07 trillion for 2000.

    I would appreciate if you can clarify how the higher figures of $28.9 trillion and $40.2 trillion were arrived at.

    • Mark says:

      The catch is that median is different than average. If you sort all households by wealth, the median is the “middle” household. Note that this says nothing about the wealth of the top and bottom households.

      For example, let’s say there are 3 households where one has $100,000 of debt, one has $100,000 of wealth, and the third has $3,000,000 of wealth. In this example, the average household wealth is a million bucks (the sum of their wealths divided by 3, the number of households). However, the median will be $100,000 wealth, the wealth of the middle household.

      On the other hand, if all 3 households have a million bucks, then the average will still be a million, but so will the median. You can also have wealths of $0, $1M, and $2M to get the same median and average of $1M.

      So while median and average are useful statistics, they can be completely different. They also say almost nothing about the overall distribution.

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