WurfWhile

[Hat tip Doug May]

The Center for Economic and Policy Research (CEPR) study by Dean Baker and David Rosnick, “The Impact of the Housing Crash on Family Wealth.” shows that over the last two decades (from 1989 to the projected 2009) median wealth for people age 35 - 54 was flat or declining assuming another 10% drop in housing prices by 2009. Housing prices are currently declining about 2% a month. The authors blame the housing bubble, the stock bubble, stagnant wages and the decline of defined pensions for causing the losses - with housing being a major component of accumulated wealth during the period until the bubble’s recent burst. An older cohort, those 55 - 64 did a bit better with the housing collapse reducing their median wealth to levels just above what they had a decade earlier in 1998.

Sadly none of this is surprising, but now we have figures and charts to go with the news stories.

The press release announcing the study ties it to Social Security and Medicare policy, noting that

“due to the collapse of the housing bubble, the vast majority of Americans have accumulated little or no wealth. This means that they will be almost completely reliant on Social Security and Medicare to support them in their retirement years.
….
This analysis should also prompt serious re-examination of policy proposals to cut Social Security and Medicare for near retirees. Baker commented, ‘policies that perhaps could have been justified at the peak of the housing bubble make much less sense now that tens of millions of near-retirees have just seen most of their wealth disappear.’”