Family savings rates don’t match beefed-up down payment requirements

U.S. family net worth dropped to 1990 rates in 2010, according to the Federal ReserveThe central bank in control of regulating the U.S. financial and monetary system.’s (the Fed’s) Survey of Consumer Finances. The report focuses on middle-income families, who have suffered greater financial losses than low-income and high-income families during the Great Recession and Lesser DepressionThe period from 2009-2016, characterized by persistent slow job growth and low home sales.. To compare apples to apples, all figures in the report are adjusted for inflationThe price changes over time in consumer goods and services, quantified in the consumer price index (CPI). to better judge the standard of living.

According to the Federal ReserveThe central bank in control of regulating the U.S. financial and monetary system.:

• the national median family income dropped from $49,600 in 2007 to $45,800 in 2010;
• median family net worth dropped from $126,400 in 2007 to $77,300 in 2010; and
• 75% of lost net worth resulted from the housing bust.

Surprisingly, consumer spending did not fall with family income during these 20 years. The reason? Savings rates declined during this period and the rate of debt repayment slowed. The percentage of families saving money dropped from 56% of families in 2007 to 52% of families in 2010.