WASHINGTON (MarketWatch) — As of a year ago, typical U.S. households still hadn’t recovered all of the wealth they lost in the Great Recession of 2008-09, according to the latest Survey of Consumer Finances released by the Federal Reserve on Thursday.

Median net worth fell 2% (inflation-adjusted) between 2010 and 2013 to $81,200 per family, down about 40% from the $135,400 they had in 2007, just before home prices and stock prices plunged, the Fed reported. (The median means that half of families had more wealth, and half had less. Net worth is the value of all assets minus the value of all liabilities or debts.)

The Survey of Consumer Finances is considered one of the most comprehensive studies on income, wealth and debt. Unfortunately, it’s only produced every third year, and it’s published about 18 months after the survey.

A lot can change in that 18 months, including a 14% increase in home prices and a 30% gain in the stock market.

In the following pages, I’ll discuss other notable findings in the report.

Next: Median incomes have fallen 12%.

The median income of American families has fallen 12% since 2007, according to the Federal Reserve. MarketWatch

If the typical family thinks the Great Recession never ended, here’s a good explanation:

Median incomes have dropped about 12% in real terms since 2007, just before the recession began. In inflation-adjusted terms, the typical family makes only about $200 more a year than it did in 1989.

There was some steady progress in median incomes from 1992 to 2004, but that’s all been wiped away.

Some groups have done better than others: Incomes of the top 10% have risen about 18% in real terms since 1989. But those in the 60th to 80th percentile — the once-prosperous middle class — have seen their incomes rise just 4% in 24 years.

Next: The rich are getting richer.

The richest 10% have about $1.9 million in net worth, on average. The bottom 50% has $31,000.

The group that suffered the largest percentage decline in net wealth was the lower-middle class, those between the 25th and 50th percentile. Their wealth dropped by 9% between 2010 and 2013, largely because home values — where they hold most of their wealth — were rising less than the inflation rate.

The top 3% saw their share of total wealth rise from just over 50% to 54.3%, while the share held by all other groups — even those in the 90th to 97th percentiles — declined.



The share of total wealth owned by the bottom 90% declined from 33% in 1989 to 25% in 2013.

Next: Stock market holdings.

Fewer than half of families own any stock. Of those that do, average holdings were $270,000. For those in the bottom half of the income scale, average holdings were just $54,000, while those in the top 10% had $969,000 on average.

Although the stock market is fully recovered from the 2008 crash, the benefits of the bull market have been unevenly felt.

Fewer families owned stocks in 2013 than they did in 2007. In fact, less than 50% of families owned any shares, either directly or indirectly through a retirement account or mutual fund. The median value of all financial assets (stocks, bonds, bank accounts, mutual funds and life insurance policies) was just $21,200 in 2013.

Fewer American families have retirement accounts. For those between 35 and 64 in the bottom half of the income scale, less than 40% had a retirement account in 2013, and the mean value of their IRA or 401(k) account was only $39,100 for those who had one. By contrast, more than 90% in the top 10% had a retirement account, with an average value of $446,100 in their IRA or 401(k).

Next: The debt burden is easing.

The leverage ratio (debt to assets) has dropped since 2010.

The Great Recession was caused by an explosion of debt that could not be serviced. Fortunately, most households are reducing their debt levels (either voluntarily or not).

The aggregate leverage ratio (the ratio of debt to assets) rose from around 12% in 2001 to around 15% by 2007. The destruction of assets in the recession pushed the leverage ratio to 16.4% in 2010, but it had fallen back to 14.8% by 2013.

The debt-to-income ratio, likewise, has fallen from around 125% of income in 2010 to 105% in 2013. The fraction of families that had to pay more than 40% of their income to service their debt has dropped from more than 11% in 2007 to 8.4% in 2013.

The Survey of Consumer Finances confirms what we suspected we knew: For most families, the recovery from the Great Recession is still incomplete. Most families are falling further behind in terms of income, and their wealth is increasing only because real estate prices have bounced off the lows.

Probably the best news in the report is that debt levels have fallen from the extremely dangerous levels of 2007.