Generation X was apparently the only group to recover the wealth lost from the housing market crash despite facing the most economic hardships when compared to other generations.
Pew Research Center conducted the study using data from the Federal Reserve, where researchers found Gen X progressed in the areas of wealth, home equity and income recovery despite experiencing the hardest hits. Pew defined the following years of birth for each generation as such: silent generation (born 1928-1945), boomers (1946-1964), Gen X (1965-1980) and millennials (1981-1996).
Gen Xers were between ages 27 and 42 at the time of the Great Recession, when unemployment was highest between 2007 and 2009. Many of the people in this group were new to the housing market and were most likely to buy houses at peak prices, resulting in taking out more mortgages than they could afford, according to the study.
Stock prices also plummeted after 2007, which meant financial assets declined. While silent and boomer generations saw “modest declines” in financial assets, Gen X saw a 20-percent decrease in its financial holdings, according to Pew.
As a result, Gen X lost more wealth than any other generation. The median net worth of Gen X households declined from $63,400 to $39,200 between 2007 and 2010. Home equity also took a hit for Gen X, with the median home equity falling by 43 percent.
The study acknowledged that older millennials who were beginning to gain wealth and form households suffered from the Great Recession, but they had little to no wealth destruction because they had little wealth to lose.
Silent and boomer households were not hit as hard as Gen X, with median wealth loss by 14 and 26 percent, respectively. Median home equity loss for the silent generation was also 15 percent, while boomers faced a 28-percent loss.
Gen X made a comeback in the post-recession era, however, due to being at prime working ages, as well as fluctuations within the market. While silent generation members and boomers were exiting the job market due to retirements and deaths, Gen Xers remained, allowing them to rebuild household incomes, going from $67,100 in 2007 to $73,200 in 2016.
“Higher household income tends to boost wealth because it enables families to save and add to wealth,” the study found. (RELATED: Tariffs Making Houses More Expensive For Many Americans)
The median net worth of Gen X households rose by 115 percent, whereas silent and boomer generations were unable to recover the wealth they had in 2007, though the wealth levels were still higher than Gen X households in 2016.
Gen X was also the only group to fully recover home equity levels. In fact, it doubled median home equity levels due to “lenders foreclosing on homeowners as well as appreciating home values and mortgage modifications,” Pew reported.
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