6. Household debt finally recedes
In 2013, owner-occupied housing was the most important household asset in the average portfolio breakdown for all households shown in Table 4, accounting for 29 percent of total assets (also see Figure 4). However, net home equity -- the value of the house minus any outstanding mortgage -- amounted to only 17 percent of total assets. Real estate, other than owner-occupied housing, comprised 10 percent, and business equity another 18 percent.
Demand deposits, time deposits, money market funds, CDs, and the cash surrender value of life insurance (collectively, “liquid assets”) made up 8 percent and pension accounts 17 percent. Bonds and other financial securities amounted to 2 percent; corporate stock, including mutual funds, to 13 percent; and trust fund equity to 3 percent. Debt as a proportion of gross assets was 15 percent, and the debt-equity ratio (the ratio of total household debt to net worth) was 0.18.
There were some significant changes in the composition of household wealth over time. First, the share of housing wealth in total assets, after fluctuating between 28 and 30 percent from 1983 to 2001, jumped to 34 percent in 2004 and then declined to 29 percent in 2013. Two factors explain this movement. The first is the trend in the homeownership rate. According to the SCF data, the homeownership rate rose from 63 percent in 1983 to 69 percent in 2004 and then fell off to 65 percent in 2013. The second is the trend in housing prices. The median house price for existing one-family homes rose by 18 percent between 2001 and 2004 but plunged by 17 percent from 2004 to 2013.21
A second and related trend is that net equity in owner-occupied housing (the difference between the market value and outstanding mortgages on the property), after falling almost continuously from 24 percent in 1983 to 18 percent in 1998, picked up to 22 percent in 2004 but then fell again to 17 percent in 2013. The difference between the two series (gross versus net housing values as a share of total assets) is attributable to the changing magnitude of mortgage debt on homeowner's property, which increased from 21 percent in 1983 to 37 percent in 1998, fell back to 35 percent in 2004, and then rose again to 39 percent in 2013. Moreover, mortgage debt on principal residence climbed from 9.4 of total assets in 2001 to 12.7 percent in 2010 before receding to 11.2 percent in 2013. The increase in net home equity as a proportion of assets between 2001 and 2004 reflected the strong gains in real estate values over these years, while its sharp decline from 2007 to 2013 reflected the steep fall in housing prices over those years.
Third, relative indebtedness first increased, with the debt-equity ratio climbing from 15 percent in 1983 to 21 percent in 2010, and then fell off to 18 percent in 2013. Likewise, the debt-income ratio surged from 68 percent in 1983 to 127 percent in 2010 but then dropped to 107 percent in 2013. If mortgage debt on principal residence is excluded, then the ratio of other debt to total assets actually fell off over time from 6.8 percent in 1983 to 4.0 percent in 2013.
The large rise in relative indebtedness among all households between 2007 and 2010 could be due to a rise in the absolute level of debt and/or a fall off in net worth and income. As shown in Table 1, both mean net worth and mean income fell over the three years. There was also a slight contraction of debt in constant dollars, with mortgage debt declining by 5.0 percent, other debt by 2.6 percent, and total debt by 4.4 percent. Thus, the steep rise in the debt to equity and the debt to income ratio over the three years was entirely due to the reduction in wealth and income. In contrast, from 2010 to 2013, relative indebtedness declined. In this case, both net worth and incomes were relatively unchanged, so that the proximate cause was a sizeable reduction in household debt. In fact, average mortgage debt (in constant dollars) dropped by 13 percent, the average value of other debt by 11 percent, and average household debt by 13 percent.
A fourth change is that pension accounts rose from 1.5 to 16.5 percent of total assets from 1983 to 2013. This increase largely offset the decline in the share of liquid assets in total assets, from 17.4 to 7.6 percent, so that it is reasonable to infer that households to a large extent substituted tax-deferred pension accounts for taxable savings deposits.
Fifth, other (non-home) real estate fell from 15 percent of total assets in 1983 to 10 percent in 2013, financial securities declined from 4.2 to 1.5 percent of total assets, and unincorporated business equity held more or less steady over time at around 18 percent. Stocks and mutual funds rose from 9 to 13 percent of gross assets over these years. Its year to year trend mainly reflects fluctuations in the stock market. If we include the value of stocks indirectly owned through mutual funds, trusts, IRAs, 401(k) plans, and other retirement accounts, then the value of total stocks owned as a share of total assets more than doubled from 11.3 percent in 1983 to 24.5 percent in 2001, and then tumbled to 17.5 percent in 2010, before rising to 20.7 percent in 2013. The rise during the 1990s reflected the bull market in corporate equities as well as increased stock ownership, while the decline in the 2000s was a result of the sluggish stock market as well as a drop in stock ownership. The increase from 2010 to 2013 reflected the recovery of the stock market.
6.1. Portfolio composition by wealth class
The tabulation in Table 4 provides a picture of the average holdings of all families in the economy, but there are marked class differences in how middle-class families and the rich invest their wealth. As shown in Table 5, the richest one percent of households (as ranked by wealth) invested almost three quarters of their savings in investment real estate, businesses, corporate stock, and financial securities in 2013 (also see Figure 5). Corporate stocks, either directly owned by the households or indirectly owned through mutual funds, trust accounts, or various pension accounts, comprised 25 percent by themselves. Housing accounted for only 9 percent of their wealth (and net equity in housing 7 percent), liquid assets 6 percent, and pension accounts another 9 percent. Their ratio of debt to net worth was only 3 percent, their ratio of debt to income was 38 percent, and the ratio of mortgage debt to house value was 17 percent.
Among the next richest 19 percent, housing comprised 28 percent of their total assets (and net home equity 20 percent), liquid assets 8 percent, and pension assets another 22 percent. Investment assets -- real estate, business equity, stocks, and bonds – made up 41 percent and 23 percent was in the form of stocks directly or indirectly owned. Debt amounted to 12 percent of their net worth and 97 percent of their income, and the ratio of mortgage debt to house value was 30 percent.
In contrast, over three-fifths of the assets of the middle three quintiles of households was invested in their own home in 2013. However, home equity amounted to only 31 percent of total assets, a reflection of their large mortgage debt. Another quarter went into monetary savings of one form or another and pension accounts. Together housing, liquid assets, and pension assets accounted for 87 percent of the total assets of the middle class. The remainder was about evenly split among non-home real estate, business equity, and various financial securities and corporate stock. Stocks directly or indirectly owned amounted to only 10 percent of their total assets. The ratio of debt to net worth was 64 percent, substantially higher than for the richest 20 percent, and their ratio of debt to income was 125 percent, also much higher than that of the top quintile. Finally, their mortgage debt amounted to about half the value of their principal residences.
Almost all households among the top 20 percent of wealth holders owned their own home, in comparison to 67 percent of households in the middle three quintiles. Three-quarters of very rich households (in the top percentile) owned some other form of real estate, compared to 44 percent of rich households (those in the next 19 percent of the distribution) and only 12 percent of households in the middle 60 percent. Eighty-nine percent of the very rich owned some form of pension asset, compared to 84 percent of the rich and 44 percent of the middle. A somewhat startling 77 percent of the very rich reported owning their own business. The comparable figures are 26 percent among the rich and only 7 percent of the middle class.
Among the very rich, 84 percent held corporate stock, mutual funds, financial securities or a trust fund, in comparison to 60 percent of the rich and only 14 percent of the middle class. Ninety-four percent of the very rich reported owning stock either directly or indirectly, compared to 85 percent of the rich and 41 percent of the middle. If we exclude small holdings of stock, then the ownership rates drop off sharply among the middle three quintiles, from 41 percent to 30 percent for stocks worth $5,000 or more and to 25 percent for stocks worth $10,000 or more.
Table 6 looks at trends in the wealth composition of the middle three wealth quintiles as well as asset ownership rates. Perhaps, the most striking development is with regard to the homeownership rate. After rising almost continuously over time from 72 percent in 1983 to 78 percent in 2004, it plunged by 11 percentage points to 67 percent in 2013. This trend was more pronounced than that among all households, among whom the homeownership rate dropped from 69 percent in 2004 to 65 percent in 2013. A similar trend is evident for the share of home values in total assets. It remained virtually unchanged from 1983 to 2001 but then rose sharply in 2004. This increase was largely a result of rising house prices and secondarily a consequence of the continued gain in the homeownership rate. The share then declined from 2004 through 2013 as housing prices fell and the homeownership rate plummeted.
It might seem surprising that despite the steep drop in home prices from 2007 to 2010, housing as a share of total assets actually fell only slightly. The reason is that the other components of wealth fell even more than housing. While the mean value of housing among households in the middle three quintiles fell by 31 percent in real terms, the mean value of other real estate was down by 39 percent and that of stocks and mutual funds fell by 47 percent.
Likewise, despite the modest recovery in housing prices from 2010 to 2013, the share of housing in total assets dropped by 2.3 percentage points. The mean value of housing fell by 7.3 percent. Of this, the decline in the homeownership rate accounted for only 19 percent of the overall decline, while the main culprit was the decline in the mean values of houses, which explained 81 percent. This result seems contrary to the finding that the median value of existing homes rose by 8 percent in real terms according to data from the National Association of Realtors (see footnote 1 for the reference). The most likely reason for the difference in results is that the 8 percent figure is based on data for existing homes only whereas the SCF data includes the value of homes that were owned by the household prior to the current year as well as newly bought homes. Another difference is that the former include all families whereas my figure is based on households in the middle three wealth quintiles. In fact, according to the SCF data, the median value of homes among middle class households was down by 14 percent in real terms from 2010 to 2013. This result, in turn, may be due to the fact that the new homes bought by families in the SCF sample were cheaper than existing homes.
The share of pension accounts in total assets rose by 15 percentage points from 1983 to 2013, while that of liquid assets declined by 13 percentage points. This trend was more or less continuous over time. This set of changes paralleled that of all households. In contrast, the share of middle class households holding a pension account, after surging by 41 percentage points from 12 percent in 1983 to 53 percent in 2007, collapsed by 7.6 percentage points to 46 percent in 2010 and then declined further to 44 percent in 2013. From 2007 to 2010 the mean value of pension accounts fell quite sharply, by 25 percent, though this was less than that of average overall assets, so that the share of pension accounts in total assets rose. From 2010 to 2013, in contrast, mean pension accounts were up by 12 percent, despite the slight decline in the ownership rate, so that the share of pension accounts in total assets strengthened considerably (by 2.2 percentage points).
The share of all stocks in total assets mushroomed from 2.4 percent in 1983 to 12.6 percent in 2001 and then fell off to 8.1 percent in 2010 as stock prices stagnated and then collapsed and middle class households divested themselves of stock holdings. The proportion then rebounded to 9.5 percent in 2013 as the stock market recovered. The stock ownership rate among the middle class also shot up quickly from 17 percent in 1983 to 51 percent in 2001, when it peaked. It then declined steeply to 41 percent in 2010, where it remained in 2013. In similar fashion, the share of middle class households owning either corporate stock, financial securities, mutual funds or a personal trust rose from 22 percent in 1983 to 28 percent in 2001 and then collapsed almost by half to 14 percent in 2013. Much of the decline took place between 2007 and 2010, as middle class households got scared off by the stock market collapse of those years.
6.2 Middle Class Debt
The rather staggering debt level of the middle class in 2013 raises the question of whether this is a recent phenomenon or whether it has been going on for some time. The debt-income ratio peaked in 2010 and then receded in 2013, while the debt-equity ratio peaked in 2007 and then contracted substantially in 2010 and a bit more in 2013.
There was a sharp rise in the debt-equity ratio of the middle class from 37 percent in 1983 to 61 percent in 2007. There was a particularly steep rise between 2001 and 2004, a reflection mainly of a steep rise in mortgage debt. The debt to income ratio skyrocketed from 1983 to 2007, more than doubling. Once, again, much of the increase happened between 2001 and 2004. In constant dollar terms, the mean debt of the middle class shot up by a factor of 2.6 between 1983 and 2007, the mean mortgage debt by a factor of 3.2, and the average value of other debt by a factor of 1.5. The rise in the debt-equity ratio and the debt-income ratio was much steeper than those for all households. In 1983, for example, the debt to income ratio was about the same for middle class as for all households but by 2007 the ratio was much larger for the middle class.
Then, the Great Recession hit. The debt-equity ratio continued to rise, reaching 72 percent in 2010 but there was actually a retrenchment in the debt to income ratio, falling to 134 percent in 2010. The reason is that from 2007 to 2010, the mean debt of the middle class actually contracted by 25 percent in constant dollars. Average mortgage debt declined by 23 percent, as families paid down their outstanding balances, while the mean value of other debt plummeted by 32 percent, as families paid off credit card balances and other forms of consumer debt. The significant rise in the debt-equity ratio of the middle class between 2007 and 2010 was due to the steeper drop off in net worth than in debt, while the decline in the debt-income ratio was exclusively due to the sharp contraction of overall debt.
Both the debt-equity and the debt-income ratios fell from 2010 to 2013. The proximate cause was a decline in overall mean debt, which fell by 8.2 percent in real terms over these years. This, in turn, was due to a decline in average mortgage debt, which dropped by 10.4 percent. The average balance on other debt actually increased slightly, by 1.6 percent.
As for all households, net home equity as a percentage of total assets fell for the middle class from 1983 to 2013 and mortgage debt as a proportion of house value rose. The decline in the former between 2007 and 2010 was relatively small despite the steep decrease in home prices, a reflection of the sharp reduction in mortgage debt. There was virtually no change from 2010 to 2013. On the other hand, the rise in the ratio of mortgage debt to house values was relatively large over years 2007 to 2010 because of the fall off in home prices. This ratio actually contracted somewhat from 2010 to 2013 as outstanding mortgage debt fell.
6.3 Concentration of assets by asset type
Another way to portray differences between middle class households and the rich is to compute the share of total assets of different types held by each group (see Table 7). In 2013 the richest one percent of households held about half of all outstanding stock, financial securities, trust equity, and business equity, and a third of non-home real estate. The top 10 percent of families as a group accounted for about 85 to 90 percent of stock shares, bonds, trusts, and business equity, and over three quarters of non-home real estate. Moreover, despite the fact that 46 percent of households owned stock shares either directly or indirectly through mutual funds, trusts, or various pension accounts, the richest 10 percent of households accounted for 81 percent of the total value of these stocks, though less than its 91 percent share of directly owned stocks and mutual funds.
In contrast, owner-occupied housing, deposits, life insurance, and pension accounts were more evenly distributed among households. The bottom 90 percent of households accounted for 59 percent of the value of owner-occupied housing, 33 percent of deposits, 35 percent of life insurance cash value, and 35 percent of the value of pension accounts. Debt was the most evenly distributed component of household wealth, with the bottom 90 percent of households responsible for 74 percent of total indebtedness.
The concentration of asset ownership by asset type remained remarkably stable over the three decades despite the dramatic changes in the economy over this time period discussed in Section 2. However, there were three exceptions. First, the share of total stocks and mutual funds held by the richest 10 percent of households declined from 90 to 85 percent from 1983 to 2004 but then rose back to 91 percent in 2013, while their share of stocks directly or indirectly owned fell from 90 percent in 1983 to 77 percent in 2001 but then rose to 81 percent in 2013. Second, the proportion of total pension accounts held by the top 10 percent fell from 68 percent in 1983 to 51 percent in 1989, reflecting the growing use of IRAs by middle income families, and then rebounded to 65 percent in 2013 from the expansion of 401(k) plans and their adoption by high income earners. Third, the share of total debt held by the top 10 percent declined from 32 to 27 percent between 1983 and 2013.
6.4. The “middle class squeeze”
Nowhere is the middle class squeeze more vividly demonstrated than in their rising debt. As noted above, the ratio of debt to net worth of the middle three wealth quintiles rose from 37 percent in 1983 to 46 percent in 2001 and then jumped to 61 percent in 2007. Correspondingly, their debt to income rose from 67 percent in 1983 to 100 percent in 2001 and then zoomed up to 157 percent in 2007! This new debt took two major forms. First, because housing prices went up over these years, families were able to borrow against the now enhanced value of their homes by refinancing their mortgages and by taking out home equity loans (lines of credit secured by their home). In fact, mortgage debt on owner-occupied housing (principal residence only) as a proportion of total assets climbed from 29 percent in 1983 to 47 percent in 2007, and home equity as a share of total assets fell from 44 to 35 percent over these years. Second, because of their increased availability, families ran up huge debt on their credit cards.
Where did the borrowing go? Some have asserted that it went to invest in stocks. However, if this were the case, then stocks as a share of total assets would have increased over this period, which it did not (it fell from 13 to 7 percent between 2001 and 2007). Moreover, they did not go into other assets. In fact, the rise in housing prices almost fully explains the increase in the net worth of the middle class from 2001 to 2007. Of the $16,400 rise in median wealth, gains in housing prices alone accounted for $14,000 or 86 percent of the growth in wealth. Instead, it appears that middle class households, experiencing stagnating incomes, expanded their debt in order to finance normal consumption expenditures.
The large build-up of debt set the stage for the financial crisis of 2007 and the ensuing Great Recession. When the housing market collapsed in 2007, many households found themselves “underwater,” with larger mortgage debt than the value of their home. This factor, coupled with the loss of income emanating from the recession, led many home owners to stop paying off their mortgage debt. The resulting foreclosures led, in turn, to steep reductions in the value of mortgage-backed securities. Banks and other financial institutions holding such assets experienced a large decline in their equity, which touched off the financial crisis.
6.5. The housing market
It is perhaps no surprise that the housing sector took an especially large hit in the financial crisis — the prime culprits in this crisis were the mortgage industry and the creation of faulty financial instruments by the financial sector that were tied to the fate of the housing market. The housing bubble in the early part of the last decade, which artificially inflated home prices to unprecedented levels, certainly set the stage for a major market ‘correction’. Indeed, as noted in Section 2 above, from 2007 to 2010, the median price of existing homes plummeted by 24 percent in real terms. Because housing makes up over 30 percent of total assets for all households and over 60 percent of the assets for the middle class, any economic downturn that affects the housing market will naturally hurt the wealth of the middle class.
As discussed above, the overall home ownership rate declined from 68.6 percent in 2007 to 67.2 percent in 2010 according to the SCF data, for a drop of 1.4 percentage points (see Table 8). This seems pretty modest, given all the media hype about home foreclosures over these years. Percentage point reductions were sharper for African-American and Hispanic households (1.9 percentage points) than for white households (almost no change); for single males (2.6 percentage points) than for married couples or single females (actually a net increase); for high school graduates (4.3 percentage points) than other educational groups; younger age groups in comparison to age group 75 and over (a large net increase); and for households with annual incomes below $25,000 and, surprisingly, above $75,000 than for middle income households.
The collapse in home values led to a surprisingly modest uptick in the number of families “underwater,” or with negative home equity. In 2007, only 1.8 percent of homeowners reported that their net home equity was negative on the basis of the 2007 SCF. By 2010, according to the SCF data, 8.2 percent of homeowners were “underwater.” As discussed above, though housing prices dropped by 24 percent in real terms from 2007 to 2010, there was also a substantial retrenchment of mortgage debt, which accounts for the relatively small share of home owners underwater in 2010.
Normally, we might think that the poorest households had the greatest incidence of being underwater but this was not always the case. Minorities did have a somewhat higher incidence of negative home equity than (non-Hispanic) whites but the differences were quite small. Somewhat surprisingly, single females, the poorest of the three family types, and single males had a somewhat lower incidence of negative home equity among homeowners than married couples. The reason for this is likely the lower mortgage debt of single females and single males (that is, they had less expensive houses to begin with). Also, again somewhat surprisingly, the lowest educational group, those with less than 12 years of schooling, had the smallest incidence of negative home equity among their homeowners, only 5 percent.22 In contrast, the incidence ranged from 8 percent to 11 percent among high school graduates, those with some college, and college graduates.
The age pattern is more consistent with expectations. Homeowners in the youngest age group, under age 35, had by far the highest incidence of negative home equity, 16 percent. The incidence of negative home equity declined almost directly with age, reaching only 3 percent for the oldest age group, 75 years and older. This reflects the fact that mortgages are generally paid off as people age. Moreover, the overall ratio of debt to net worth also declined directly with age (see Table 15).
However, the pattern by income class is again unexpected. The overall pattern is U-shaped, with the lowest incidence of negative home equity being for the lowest income class (under $15,000 of annual income) and the highest income class ($250,000 or more). The incidence of negative home equity among homeowners peaked at the $50,000 to $75,000 income class. Thus, the middle class was hit hardest by the collapse in housing prices. The reason is that they took out much higher mortgage debt, through re-financing, secondary mortgages, and home equity lines of credit, relative to their home values than the poor or the rich (see Table 5 above).
I also show the percentage decline in the average value of home equity among home owners from 2007 to 2010. For all home owners, the average decline was 29 percent (in constant dollars). This, again, is a surprisingly low figure given the 24 percent decline in real housing prices. The reason is that if average mortgage debt had remained constant over the three years, average home equity would have dropped by 37 percent.23 It was only the contraction of average mortgage debt over these years that kept the percentage decline in home equity at 26 percent instead of 37 percent.
The pattern by demographic group in the change in net home equity tends to be different than that of the fifth column, the share of households who were underwater in 2010. Hispanic home owners suffered by far the largest percentage decline in home equity – 47 percent – of the three racial/ethnic groups. Black households experienced a somewhat larger percentage decline than white home owners. Single female households experienced a somewhat larger decline than single males or married couples. The less schooled households suffered a larger decline than college graduates (only 26 percent for the latter). There is tremendous age variation, with older households more immune to the housing price collapse. The youngest age group experienced a 53 percent fall in home equity while the oldest age group had “only” a 19 percent decline.
There is a U-shaped pattern with regard to household income, with the lowest income class experiencing only a 0.6 percent depreciation in home equity, income class $75,000-$99,999 suffering the greatest percentage decline – 32 percent – and the highest income class undergoing a 18 percent loss. It is likely that this pattern is due to the fact that Hispanic, black, and younger households came later into the home buying market and therefore were more likely to buy when prices were peaking. Indeed, during the early 2000s mortgage companies and banks were using all kinds of devices to permit households with low income and low credit ratings to get into very risky mortgages. This particularly affected minorities and low income whites.
Generally speaking (though not always) the groups with the highest ownership rates -- non-Hispanic whites, married people, people with higher education, older people (over age 64), and people with higher income -- also had the lowest share of homeowners with negative home equity and the lowest percentage loss in home equity. Here, too, the difference likely reflects when the families in these groups bought their home. Of those who were home owners, minorities, married individuals, those with some college education, younger people and people with incomes between $50,000 and $100,000 had the highest percentages with negative home equity. Likewise, among home owners, Hispanics, single females, those with less than a high school degree and those with some college, younger households, and those with incomes between $75,000 and $990,000 suffered the largest percentage declines in home equity. Young homeowners under the age of 35 (16.2 percent with negative home equity and a 59 percent decline in net home equity) were the hardest hit by the recession.
An update to 2013 is also provided in Table 8. Did the housing situation change by 2013? The overall home-ownership rate, as noted above, fell by 2.1 percentage points between 2010 and 2013. Blacks and Hispanics suffered larger declines than whites but declines were about equal among family types. Those with some college, middle aged families, particularly age group 45- 54, and middle income families, especially income class $25,000 to $49,999, experienced the largest drops in home-ownership. On the other hand, the home-ownership rate picked up among age group 65-74, the lowest income class, and income class $75,000-$99,999.
There was a modest reduction in the overall share of homeowners underwater between 2010 and 2013, from 8.2 to 6.9 percent. The share fell among white households but continued to rise among black and Hispanic households, by 5.0 and 2.9 percentage points, respectively. By 2013, 14 percent of black homeowners had negative home equity, the largest of the three groups. The “underwater rate” fell among the three family types – most strongly among single females – It declined among the educational groups except the lowest one, where it showed a very modest uptick. There was a sizeable decline in the underwater rate among the youngest age group, bringing it down to 9.4 percent from 16.2 percent, and more modest decreases for age groups 35-44 and 75 and over. For the oldest group, the underwater rate was down to 0.4 percent. There were relatively small changes among the other age groups. Changes were also relatively minor by income class, except for middle income ones which experienced very substantial declines in their underwater rate (decreases of 4.7 percentage points for income class $50,000-$74,999 and 2.9 percentage points for income class $75,000-$99,999).
Overall, mean home equity declined by 3.8 percent in real terms from 2010 to 2013. Among African-Americans, it fell by 20 percent, compared to 3.4 percent for whites, and among Hispanics a slight increase was recorded, offsetting the steep falloff in the previous three years. Home equity among single males rose by 4.8 percent but dropped by 1.6 percent among married couples and almost 10 percent among single females, compounding the previous precipitous decrease. Net home equity recovered somewhat among those with less than a high school education but fell sharply among high school graduates. Some recovery in net home equity was found for the two youngest age groups but it continued to fall among middle age (45-54 and 55- 64) households and among the oldest age group. The record is mixed by income classes, though the middle income group ($25,000-$49,999) showed the steepest fall-off in home equity.