Saul Loeb/AFP via Getty Images
The finances of American families have generally improved in recent years, despite the economic upheaval caused by the pandemic, according to a new survey from the Federal Reserve.
The average family’s net worth jumped 37% between 2019 and 2022. This is the largest three-year increase since the Fed began conducting the survey more than three decades ago.
The survey also reveals that the wealth gap between rich and poor has narrowed somewhat during this period. The government’s temporary pandemic-related relief measures may have contributed to these broad-based gains.
Job losses or COVID bonuses have changed family financial dynamics
Median family income also increased during the survey period, but only by 3%, and much of this increase was concentrated among those on the upper rungs of the income ladder.
However, it was not the same for everyone. The income portion of the survey focused on 2021, when more than one in four families said their income was significantly higher or lower than usual. At the start of the pandemic, many people lost their jobs or left the workforce, while many others who continued to work saw their wages and bonuses increase.
The central bank has conducted a survey of consumer finances every three years since 1989.
Fewer bankruptcies, more owners
Debt levels in the 2022 survey showed little change since 2019. But families were in a better position to cover those debts than before, and the share of families filing for bankruptcy in the past five years fell to just 1.3%. compared to 2% in 2019 and 3% in 2016.
Nearly two out of three families were homeowners in 2022, a slight increase compared to three years earlier. Rising home values contributed to the increase in household wealth over the period. But they have also made housing less affordable for those looking to enter the market.
In 2022, the median home price was more than 4 1/2 times the median family income. Affordability has deteriorated this year as housing prices have remained high and mortgage rates have continued to rise.
USA News Gb1