The median decline in household net worth was 18 percent, driven by foreclosure or a decline in home prices, loss of value of financial assets or businesses, and the drawing down of savings during periods of unemployment. Addition of debt was less of a factor in pulling down overall net worth.
But the study underlined that there was no common experience for Americans in the Great Recession. While some households suffered wealth losses much greater than the median 18 percent, others held steady or gained. Altogether, about 38 percent of people said their wealth had not suffered at all.
Many Americans do not own homes or the kinds of financial assets that took a dive during the two-year period.
Paradoxically, people were more likely to decline in wealth if they were already wealthy. Among people ranking in the top 10 percent by wealth, 77 percent reported a wealth decline. For those in the bottom 20 percent, the figure was 49 percent.
Western region lost more
There were major regional differences, too. In the West, where home values dropped the most, the median loss of wealth was 28 percent. In the Northeast it was 10 percent.
Overall, the study found that the experience of 2007-2009 left Americans more cautious. "A large proportion of all wealth groups and across the range of changes in wealth expressed the need for greater precautionary savings," the researchers reported. Even people who managed to come out better were more worried for the future.
John Burgess is an associate editor at the AARP Bulletin.