The June 2012 Federal Reserve Bulletin offers a preview of the much anticipated release of the 2007-2010 Federal Reserve Survey of Consumer Finances. It has more than just economists weighing in on the average American’s money matters. And when it comes to housing, everyone is trying to make cents of the reported 29 percent drop in the median American household’s net worth.
Well, we’re here to let homeowners know: Even after the Great Recession, there’s still no place like home.
The owner renter gap has always been impressive. Over a 10-year span (2001-2010) homeowners have had on average a net worth of $211,150. By comparison, renters during the same period averaged $5,250 – about 2.5 percent of that of the homeowner.
But, at its height in 2007, the median homeowner’s net worth was approximately $246,000 while renters were coming in at $5,400. That’s a wealth gap of more than $240,000.
So, what’s happened to those numbers since the housing market crash? You might be surprised.
Renter’s net worth dropped only $300, where homeowner’s lost a stunning $71,500. But the financial divide between homeowners and renters remains striking. Although property owners lost a much higher dollar amount in the past few years comparatively, they still emerged with nearly 35 times the net worth of renters. And even with the 29 percent loss owners incurred from 2007 to 2010, they still remained $169,400 richer than the average U.S. renter.
Yes, the housing bust has had a massive and ongoing adverse impact on middle America’s financial stature. And sure, homeowners took the brunt of the hit. Homes make up most of the middle class’ wealth. It’s hard to find the silver lining. But if there is one, it’s that the “American Dream” is more resilient than most imagined. Even in the wake of a historic collapse, the numbers still point to own.
So, when you’re lying in bed at night drifting through the tornado of interpretations, just remember: There really is no place like home.