July 2016 - Lessons Learned

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56 | TH E M R EP 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 Some Improving, Others Struggling Seven years post-crisis, large numbers of American families are still reeling from the Great Recession. T he economic and financial well-being of American families paints a contradicting picture since the financial crisis. The Federal Reserve Board's latest Report on the Economic Well-Being of U.S. Households found that American families experienced continued mild improvement in their financial well-being in 2015, but many fami - lies were struggling financially and felt excluded from economic advancement. The survey asked more than 5,600 respondents about savings behavior, economic preparedness, banking and credit access, housing and living arrangements, auto lending, education and student debt, and retirement planning. According to the report, 69 percent of respondents said they are either "living comfortably" or "doing okay" in 2015, up 4 percentage points from 2014 and up 6 percentage points from 2013. Meanwhile, American indicated that they are 9 percentage points more likely to say that their finan - cial well-being improved during the prior year than to say that their financial well-being declined. The Fed found that 75 percent of all adults are mostly or com - pletely satisfied with the overall quality of their neighborhood, but only 35 percent of those in very high-poverty census tracts report this level of satisfaction. A total of 51 percent of homeowners believe that their home value increased in the 12 months prior to the survey, while 43 percent expect that home values in their neighborhood will increase in the next 12 months, the report said. "The new survey findings shed important light on the economic and financial security of American families seven years into the recovery," said Federal Reserve Board Governor Lael Brainard. She continued, "It's important to identify the reasons why so many families face continued fi- nancial struggles and to find ways to help them overcome them." On the banking and credit front, the Fed reported that a majority of individuals believe that credit is available to them should they apply for it, but a sizeable minority of those who recently expressed a desire for credit report some difficulty in getting approved. Only 8 percent of those surveyed indicated that they applied for a mortgage loan in the last year, the same percent - age tried to refinance their home in the previous year. Fourteen percent received at least one denial or offer of less credit for a mortgage, and 22 percent got the same response for their refinance. The report found that 75 per - cent of respondents are somewhat or very confident in their ability to obtain a credit card were they to apply for one. Forty-six percent of adults desired additional credit in the prior year, and 40 percent of those who desired credit say that they faced a real or perceived difficulty in accessing credit. In the event of a financial disruption, the Fed found that 46 percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money. "There is little question that, on the whole, the financial well-being of Americans seems to have improved relative to the prior year and relative to the year before that. However, the many pockets of consumers who display elevated levels of financial stress and who are at risk for financial disruption in the case of further economic hardships remain a concern," the report said. "While the three years of data from the SHED cannot determine whether these elevated risks for some consumers are a residual impact from the Great Recession, or reflect the typical state of their finances, the results highlight the need to continue to monitor these populations and track the extent to which they are, or are not, fully benefitting from broader economic growth."

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