The New York Times‘ Annie Lowrey reports today, “Pearl Brady has a stable job with good benefits and holds two degrees, a bachelor’s and a master’s. But despite her best efforts, she has no savings, and worries that it will be years before she manages to start putting away money for a house, children and eventually retirement. … Ms. Brady has plenty of company. A new study from the Urban Institute finds that Ms. Brady and her peers up to roughly age 40 have accrued less wealth than their parents did at the same age, even as the average wealth of Americans has doubled over the last quarter-century.”
But don’t worry. If you are already wealthy then the quantitative-easing-led Obama Recovery is going great for you.
Under the header, As stocks rise, more join the ranks of millionaires, The Washington Post reported Saturday: “The stock market has roared back to record-high territory — and the number of U.S. millionaires is not far behind, according to a new report. The number of U.S. households worth $1 million or more, excluding the value of their homes, surged to nearly 9 million in 2012. That is just below its pre-recession peak of 9.2 million, according to a report by the Spectrem Group, a Chicago area financial consultant firm.”
And existing homeowners are also doing great too. Under the header, Home equity continues to grow fast, The Washington Post again reports, “Home equity is back! And it’s growing fast: According to the latest data from the Federal Reserve, Americans’ net equity holdings in their houses jumped by nearly half a trillion dollars during the last three months of 2012 and have increased by $1.7 trillion since the spring of 2011.”
Of course, if you don’t own stocks or a home, like most young people, then you are out of luck. As Federal Reserve vice chairman Janet Yellen recently explained, you’ll just have to be patient and wait till the “wealth effect” from the Federal Reserve’s printing press trickles down to you as all those wealthy home and stock owners spend more.
In the meantime, the young can keep writing monthly rent checks to their new hedge fund landlords. The percentage of young adults who own their own home fell sharply during the recession and has not recovered. But investor purchases of single-family homes are at an all time high.