A new analysis from Pew Research Center has found that Gen X is the only generation to have recovered the wealth it lost in the Great Recession. Based on an examination of data from the Survey of Consumer Finances (from the Federal Reserve), the Pew analysis shows that Gen X was the hardest hit by the Great Recession, but has recovered the best.
(The following analysis looks only at Gen Xers, Boomers and Silents. Millennials were hit by the Great Recession, but not in terms of Net Worth, which they had little of to begin with.)
Between 2007 and 2010, Gen X household’s average net worth dropped by 63% from $63,400 to $39,200. Pew attributes this to the housing crisis, as Gen Xers were more likely to be newer to buying homes and taking on mortgage debt. In fact, half of the assets owned by Gen Xers in 2007 (when they were ages 27-42) were caught up in the value of their primary residence.
By contrast, households headed by Baby Boomers or members of the Silent Generation had higher percentages of their assets tied up in checking or retirement accounts, so they were less affected by the housing crash.
Moreover, declines in median home equity values between 2007 and 2010 were higher for Gen Xers (-43%) than for Boomer (-28%) and Silent Generation (-15%) homeowners.
Gen Xers have recovered at a much faster rate than their older counterparts, though. Between 2010 and 2016 their median household net worth more than doubled, to $84,200. That puts them at a higher level than in 2016 ($63,400).
It’s worth noting that while Gen X is the only generation to have recovered to (and exceeded) earlier levels, their median household net worth remains less than half that of Baby Boomers ($184,200) and less than one-third that of the Silent Generation ($253,800).
Gen X’s recovery is attributed by Pew to several factors. They are the only generation whose home equity has recovered to pre-recession levels (though not without some “borrower distress”). Their financial assets have also recovered at a stronger pace, and they’ve been able to add to their wealth due to their still being of prime working age.
Indeed, Gen Xers’ median household income has recovered faster than older generations, and in 2016 surpassed that of Baby Boomers.
These trends are important for marketers, as sometimes members of this generation (particularly Gen X parents) feel ignored by advertisers. After all, they are now the largest generation of affluents…