According to a news report, Americans’ financial well-being has declined significantly over the past year report by the Federal Reserve. In 2022, 73% of Americans reported that they were doing “at least well” financially – five percentage points less than in 2021. Only 34% of those who were doing “well” reported “comfortable living.”
Furthermore, a tight housing market and a rise in mortgage interest rates are the reasons why tenants cannot buy a house.
While 36% of renters said they prefer to rent, 65% said they do so because they cannot afford a down payment to buy. In addition, 44% percent said they couldn’t make monthly mortgage payments, and 40% said they didn’t qualify for a mortgage.
Related: Here Average Monthly Mortgage Payments Are the Lowest in the US
One of the report’s most notable findings is that when asked what is the highest amount one could spend on emergency expenses using only savings, 18% said they could only cover an expense of less than $100. Sixty-three percent said they could cover a hypothetical emergency expenditure of $400 (five percent less than the year before).
Persistent inflation has also impacted spending and financial pressures over the past year. Thirty-three percent of Americans said inflation was their top financial challenge in 2022. Nearly two-thirds of people stopped using a product or reported using it less because of inflation, 64% reported switching to a cheaper product, and 51 % saw a reduction in their savings in response to higher prices.
Related: Here are the cities where inflation is rising the most, according to a new report