“We won’t be rebuilding wealth so quickly,” says Christian Weller of the American Progress and the University of Massachusetts, who specializes in retirement income security.
Weller says the decline in wealth is the greatest on record.
Housing prices are expected to bottom out until mid year at the earliest. Thus far, the median price of a home is down more than 20 percent from $219,000 at the market peak in 2007 to $170,000 in January.
Stock prices, however, have fallen twice as much, some 50 percent, from their October 2007 peak.
And while a greater percentage of Americans are homeowners than investors and thus the average household’s wealth is more defined by real estate than investments, the investment outlook is still a major force.
“There are more people involved in the equity market and have wealth tied up in it than the 1980s and 1990s,” says Christopher Rupley of Bank of Tokyo-Mitsubishi.