Fundraisers have been wondering why middle and small donors have been vaporizing for the past several years. A study by the Federal Reserve Board’s Division of Research and Statistics (R&S) might provide answers to some of the questions — and raise a few more.
Changes in median and mean income indicate a within age group widening of the income distribution between surveys. Education, ethnicity and homeownership also played a major role in those who gained most during the period.
According to data contained in the report Changes in U.S. Family Finances from 2019 to 2022 — Evidence from the Survey of Consumer Finances (SCF), the median leverage ratio — that is, a family’s total debt relative to its total assets — declined to a 20-year low of 29.2%. The median payment-to-income ratio dropped to the lowest level ever recorded in the SCF (13.4%).
Families with payment-to-income ratios greater than 40% declined 0.9 percentage points to 6.5%, also the lowest value on record. Some information on stimulus payments that families received from the government when collecting 2021 income are excluded from the income measure in the report.
Families’ ability to stay current on their financial obligations was steady between 2019 and 2022 and remained well below levels in the surveys that followed the financial crisis. Between 2019 and 2022, the share of families that declared bankruptcy in the past five years declined to 1.3%.
Income among families in which the survey respondent identified as white non-Hispanic or Asian — a new grouping in the 2022 survey — are substantially higher than for Black non-Hispanic, Hispanic, and other (non-Asian) and multiple race families. Income is also considerably higher for homeowners and for families living in a metropolitan statistical area (MSA) than for non-homeowners and families living in non-MSAs, according to data in the report.
Between the 2019 and 2022 surveys, real median family income (which is measured for the year before the survey) rose 3%, while real mean family income grew 15%. Increases in income were experienced across the income distribution but were largest at the top, consistent with some increase in income inequality over this period. Indeed, the between-survey growth in mean income was one of the largest three-year changes traced by the SCF.
The data showed increases in median and mean income were relatively broad-based across different types of families, whether grouped by economic characteristics such as usual income, wealth, urbanicity, or homeowner status, or by demographic characteristics such as age or race and ethnicity, and any declines were modest.
The exception is across educational groups, where increases in both median and mean income were essentially fully concentrated among families with a college degree. Families with less education either saw negligible growth or experienced declines in these measures. Declines in median and mean income were largest — 10% and 8%, respectively — among those without a high school degree.
The homeownership rate increased slightly between 2019 and 2022, to 66.1%. For families that owned a home, the median net housing value (the value of a home minus home- secured debt) rose from $139,100 in 2019 to $201,000 in 2022, as home values increased and housing debt was flat, according to the Federal Reserve Board’s data.
But, housing affordability fell to historic lows, as the median home was worth more than 4.6 times the median family income.
Most age groups experienced increases in both median and mean income between surveys. The exceptions are families in which the reference person was either 35 to 44 years old, whose median income was essentially unchanged, or older than 75 years old, whose median income declined modestly. However, the two age groups experienced the largest increases in mean income of 32% and 24%, respectively.
Income was tied to education. Income among families in which the reference person has a college degree tended to be substantially higher than for those with less schooling. Mean income among college-educated families in the 2022 SCF was nearly three times that of families in any other education group.
Go to https://www.federalreserve.gov/publications/files/scf23.pdf to download the data.
