This makes no sense. The average home cost over $300,000 and the average salary is around $70k so how can the average household only be worth $56K?
Well you remember back in the prosperous era of 2007?
The prosperous family had a McMansion with negative real equity and two leased luxury SUVs.
Sometimes things aren’t what they appear to be. Just like the financial condition of our fedgov.
“This makes no sense. The average home cost over $300,000 and the average salary is around $70k so how can the average household only be worth $56K?”
I think a far lower percentage own their own homes.
“This makes no sense. The average home cost over $300,000 and the average salary is around $70k so how can the average household only be worth $56K?”
...and average income is in the 30k’s...and falling too...
They don’t own the home - the bank does.
And apparently they don’t save much.
Sad.
People save nothing, they leverage these houses with 5% down payments and then borrow more against ‘equity’ from inflated appraisals.
The new ‘America’. I’ve got to have it NOW, and when the plan derails I’ll get a bailout.
Credit. The average homeowner has a mortgage. His equity fluctuates in a levered fashion with real estate values.
A 300K house with a 280K mortgage = 20K net worth
50K student loan debt, 30K car note, 10K in bank and 20K house equity is a negative net worth.
My home is water front on Galveston Bay, it is worth maybe 200k, your 300k is BS.
Because lots of people don’t own homes, lots have zero or negative equity in their homes and don’t save a dime.
This is data for households — which includes young singles living alone who are scraping by on several part-time jobs and have no real assets, single mothers with children on the dole (likewise on the asset front), each counted as a household, the same as a well-off couple with two children — and is about net worth, not cash-flow, so mortgage balances count against the value of a home, and student loan balances count in the minus column. A newly minted brain surgeon fresh out of surgical residency might be bringing in $300K a year, but still be in the bottom half of the household net worth statistics due to student loan balances and a mortgage.