TheMReport

MReport_July2015

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link: http://digital.themreport.com/i/539233

Contents of this Issue

Navigation

Page 49 of 67

48 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS The LaTesT Financial Prospects gain optimism for Future, Fed survey says Many consumers report living comfortably and expect higher pay in the coming year. i ndividuals' optimism regard- ing future financial prospects increased substantially from 2013 to 2014, while perceptions of current financial well-being im- proved only modestly, according to a survey conducted by the Federal Reserve released in late May. The Fed's 2014 Survey of Household Economics and Decisionmaking, which was completed by about 5,800 indi- viduals last fall, aimed to provide insight into various aspects of Americans' personal finances such as economic security, banking, credit access and usage, housing, household debt (includ- ing education and student loan debt), savings, and preparedness for retirement. The survey found that 65 percent of adult respondents said they were either "doing okay" or "living comfortably" in regards to their personal financial situation, which represented an increase of 3 percentage points from the same survey the previous year. Meanwhile, the percentage of respondents who said they expect their income to be higher in the next year jumped from 21 percent in 2013 to 29 percent in the 2014 survey. "In general, the majority of the population is continuing to re- cover from the financial crisis and the effects it had on their personal finances and financial well-being," the Fed wrote in the report. Despite the reasons for opti- mism, however, the Fed said the survey's findings "highlight that economic challenges remain for a significant portion of the popula- tion." The survey indicated that many Americans are not pre- pared for economic emergencies or for the future. Just more than half of survey respondents—53 percent—said they would be able to cover an emergency expense costing $400 without borrow- ing money or selling something. Nearly one-third of respondents said they have done without some type of medical care they needed in the last year because they could not afford it. Also, 49 percent of part-time workers surveyed and 36 percent of all workers surveyed said they'd prefer to work more hours at the same rate of pay if they could. Further indicating a lack of financial preparedness, the survey found that 31 percent of non- retirees (almost a quarter of them over age 45) had no retirement savings or pension. Less than half of adults who said they were saving for retirement said they were "mostly" or "very" confident they could make the right investment decisions to manage the money they saved. Thirty-eight percent of respon- dents who were not retired said they had no plans to retire, and among households with an income of less than $40,000 per year, 55 percent of respondents said they have no plans to retire or plan to keep working as long as possible. Homeowners generally re- mained positive in their attitudes toward housing; 43 percent of respondents said they believe the value of their house increased in the last year, while 39 percent said they expect home values to rise in their neighborhood in the coming year. Many of the respondents who rent said they wanted to buy a home but could not due to financial barriers; about half said the inability to afford a down payment was the biggest barrier to homeowner- ship, while about 31 percent said the inability to qualify for a mortgage was their main reason for renting. Also according to the survey, 23 percent of adult respondents said they had some form of edu- cation debt, though it was not exclusively student loan debt; 14 percent of those with education debt said that some of the debt was on credit cards.

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport_July2015