While household income declined in 2001, household wealth
increased, according to a study by the University of Michigan
Institute for Social Research (ISR), the world’s largest academic
survey and research organization.
The study analyzed 2001 data on household wealth, including real
estate, stocks, IRAs and vehicles, in a nationally representative
sample of 6,241 U.S. families, compared to 1999.
Overall, the analysis showed that average household net worth
increased from U.S. $206,000 in 1999 to $226,200 in 2001.
"While wealth growth in the form of stocks and IRA holdings had
stalled out before the close of last year, home ownership rates rose from 67 percent of families in 1999 to 72 percent in 2001," said economist Frank Stafford, who directs the ISR Panel Study of Income Dynamics, the source of data for the analysis.
During that same period, average net equity of those who owned homes rose from $81,400 to $91,700, according to Mr. Stafford, who noted that all figures cited are in 1999 dollars. The analysis was funded by the National Institute on Aging.
Mr. Stafford and ISR colleague Elena Gouskova also found that among households with short-term debt, including unpaid balances on credit cards, student loans and medical or legal bills, average debt rose from $11,500 in 1999 to $12,300 per family in 2001. "As we headed into the recession, some families clearly had short-term debt burdens that are difficult to sustain if economic weakness continues," Mr. Stafford said.
Finally, Stafford and Gouskova noted that the biggest gains in wealth from 1999 to 2001 were among households headed by those with a college degree or more.
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