The recent recession wiped out nearly two decades of Americans\u2019 wealth, according to <\/span>government data<\/span><\/strong> <\/span><\/a>released Monday, with \u00admiddle-class families bearing the brunt of the decline.<\/span><\/p>\n The <\/span>Federal Reserve<\/span><\/strong><\/span><\/a> <\/span>said the median net worth of families plunged by 39\u00a0percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.<\/span><\/p>\n The data represent one of the most detailed looks at how <\/span>the economic downturn <\/span><\/strong><\/span><\/a>altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.<\/span><\/p>\n The findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has seen only a halting recovery.<\/span><\/p>\n \u201cIt\u2019s hard to overstate how serious the collapse in the economy was,\u201d said Mark Zandi, chief economist for Moody\u2019s Analytics. \u201cWe were in free fall.\u201d<\/span><\/p>\n The recession caused the greatest upheaval among the middle class. Only roughly half of middle\u00ad-class Americans remained on the same economic rung during the downturn, the Fed found. Their median net worth \u2014 the value of assets such as homes, automobiles and stocks minus any debt \u2014 suffered the biggest drops. By contrast, the wealthiest families\u2019 median net worth rose slightly.<\/span><\/p>\n Americans have tried to re\u00adbalance the family budget but have found it difficult to reverse the damage.<\/span><\/p>\n The survey showed that fewer families are carrying credit card balances, and those who do have less debt. The median balance dropped 16\u00a0percent, from $3,100 in 2007 to $2,600 in 2010. The Fed also found that the percentage of Americans who have no debt rose to a quarter of families.<\/span><\/p>\n But that progress was undermined by other factors, leaving the median level of family debt unchanged. The report said more families reported taking out education loans. Nearly 11\u00a0percent said they were at least 60 days late paying a bill, up from 7\u00a0percent in 2007. And the percentage of families saddled with debts greater than 40\u00a0percent of their income stayed the same.<\/span><\/p>\n Not only were Americans still facing significant debts, but they were making less money. Median income fell nearly 8\u00a0percent, to $45,800, in 2010. The median value of stock-market-based retirement accounts declined 7\u00a0percent, to $44,000.<\/span><\/p>\n But it was the implosion of the housing market that inflicted much of the pain. The median value of Americans\u2019 stake in their homes fell by 42\u00a0percent between 2007 and 2010, to $55,000, according to the Fed.<\/span><\/p>\n The poorest families suffered the biggest loss of wealth from the drop in real estate prices. But middle-class Americans rely on housing for a larger part of their net worth. For some, it accounts for just more than half of their assets. That means every step downward is felt more acutely.<\/span><\/p>\n Rakesh Kochhar, associate director of research at the Pew Hispanic Center, calls this phenomenon the \u201creverse wealth effect.\u201d As consumers watched the value of their homes rise during the boom, they felt more confident spending money, even if they did not actually cash in on the gains. Now, the moribund housing market has made many Americans wary of spending, even if their losses are just on paper.<\/span><\/p>\n According to the Fed survey, that paper wealth \u2014 or what is officially called unrealized capital gains \u2014 shrank 11\u00a0percentage points, to about a quarter of Americans\u2019 assets.<\/span><\/p>\n The findings track research Kochhar released last year that showed a <\/span>dramatic drop in household wealth<\/span><\/strong><\/span><\/a> <\/span>during the recession, particularly among minorities. That study found record-high disparities between whites\u2019 wealth and that of blacks and Hispanics.<\/span><\/p>\n \u201cIt was turning the clock back quite a bit,\u201d Kochhar said.<\/span><\/p>\n The Fed\u2019s survey is conducted every three years. Although there have been some signs that the recovery has picked up \u2014 housing prices have begun to stabilize and unemployment has fallen \u2014 Fed economists said those improvements largely do not change the survey results.<\/span><\/p>\n