Defined by Pew as the period between December 2007 and June 2009, the Great Recession hit right as Gen Xers were entering the housing market.
While Generation X may have lost the most wealth of any generation during the Great Recession, it also now holds the distinction of being the only generation to bounce back and recover that wealth, according to Pew Research Center analysis of Federal Reserve data.
Defined by Pew as the period between December 2007 and June 2009, the Great Recession hit right as Gen Xers were entering the housing market. About half of Generation X’s household wealth at the time was tied up in their homes. That generation was also newer to the housing market and more likely to be buying at peak prices, the analysis points out, so Gen Xers took on more mortgage debt to buy their homes and, subsequently, lost more wealth than other generations. In contrast, Baby Boomers and Silent Generation households held more of their wealth in retirement savings and other bank accounts.
Measuring the value difference between a household’s assets and debts is an important marker for household well-being, which determines a household’s ability to absorb abrupt financial changes such as health emergencies or job loss, and to plan for future long-term changes such as retirement.
Of all the generations, Generation X saw the largest drop in home equity during the recession: 42 percent from 2007 to 2010. In dollars and cents, that translates to a loss of a median $28,400 during that period. Beyond 2010, however, the median net worth of Gen-X households grew 115 percent by 2016, according to the most recent available data. The net worth of Gen-X households bounced back higher than its 2007 level of $63,400 to $84,200. Moreover, Generation X has doubled its home equity since 2010, when 15 percent of this cohort’s homeowners owed more on their homes than the homes were worth. In 2016, just 3 percent of Gen-X homeowners were underwater.
Currently, Gen X household median income has grown more than 20 percent since 2007 to $73,200, and since this generation is still in its prime working years, the study concludes that it’s in a better position to withstand another economic downturn.
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