The decade-long economic expansion has given the U.S. vast quantities of new wealth driven by a booming stock market and rising house prices.
But that windfall passed by many Americans, The Wall Street Journal reports. The bottom half of all U.S. households, as measured by wealth, have only recently regained the wealth lost in the 2007-2009 recession and still have 32% less wealth, adjusted for inflation, than in 2003, according to recent Federal Reserve figures. In contrast, the top 1% of households have more than twice as much as they did in 2003.
This points to a potentially worrisome side of the expansion: If another recession comes, it could be devastating for people who have only just recovered from the last one. In the U.S., more than 85% of the assets of the wealthiest 1% are in financial assets such as stocks, bonds or stakes in private companies, but slightly more than half of all assets owned by the bottom 50% of households come from real estates, such as the family home.
The catch is that for those who lost a house during the recession or never had one, getting a toehold in homeownership has become more difficult. Builders have focused on higher-end homes for those with good credit and high incomes. As a result, affordable homes have become scarcer and more expensive. Read the full story. And see a related Business Report story on the popularity of what affordable new houses are being built in this market.