The net worth of US households plunged 18 per cent last year as the housing market crisis evolved into a deep economic recession, stripping Americans of wealth at a record pace.

Household net worth declined by 9 per cent in the final quarter, according to the Federal Reserve. They were the biggest drops since the Fed began tracking in 1946. The $5,100bn quarterly decline was worse than economists expected and contributed to a loss of $11,200bn in 2008.