US median household net worth (assets minus debts) declined 35% between 2005 and 2010 according to [pdf] the US Census Bureau, which cited both falling stock market prices and a flat housing market. However, advanced education and age continue to be the key determinants in whether a household falls above or below the median. Indeed, despite all educational groups experiencing declines in net worth, between 2005 and 2010, the gap between education levels widened.
Education Gap Pronounced
Per the 2010 figures, median household net worth where the householder holds no high school degree is the lowest, at just $7,270, versus the median of $66,740. Those with a high school diploma are under the median as well, at $42,223. Only at the bachelor’s level does the net worth exceed the median, at $142,518. Those with advanced degrees nearly quadruple the median net worth, at $245,763.
The correlation between education and net worth did not change for this reporting period, but the gap widened significantly. Those with a high school diploma saw their median net worth fall 39%, versus those with a bachelor’s degree, who experienced a 32% decline. Indeed, while in 2000, those with a bachelor’s degree had a median net worth nearly 200% those with a high school diploma only, that percentage rose to almost 350% by 2010. Comparing households with a graduate or professional degree versus a high school diploma, the ratio has jumped from 350% to 580%.
Elderly Suffer Less Precipitous Decline
Median net worth declined in all age groups, but less so in older households, by percentage. For households 65 and older, it decreased from $195,890 to $170,128, or 13%. By contrast, it decreased by 37% in younger households – who had overall far lower net worth – from $8,528 to $5,402. Householders age 35 to 44 had the largest percent decline of all age groups, at 59%.
As younger households see a dramatic decline in their net worth, they also report a struggle to meet their basic needs. According to a March 2012 WSL/Strategic Retail report, 24% of 18-34-year-olds say they do not have enough money to cover their basic needs, compared to 17% of the 35-54 set and 13% of those over 55.
Home Ownership Plays a Large Role
Meanwhile, according to the Census Bureau data, net worth is strongly tied to equity in a home. Equity in their own homes (versus investment properties) accounts for about 83% of net worth in the 65+ age group, at $141,610 of the total $170,128. It accounted for about a third of net worth in the 35 to 44 age group, at $21,255 of a total $33,200. Excluding home equity, median household net worth actually increased by 8% between 2009 and 2010, from $13,859 to $15,000.
About the Data: All Census Bureau figures in dollars. The base is less than 200,000 households. Individual outliers that highly influenced the mean value for asset categories were excluded. The estimates are based on responses from a sample of the population and may differ from the actual values because of sampling variability and other factors. As a result, apparent differences between the estimates for two or more groups may not be statistically significant.