Americans’ financial situation has declined dramatically over the past year, according to a new report from the Federal Reserve. In 2022, 73% of Americans report that they are “at least well” financially—down five percentage points from 2021. Only 34% of these people report that they are “well.” “Live comfortably.”
Moreover, the housing market is tight and mortgage rates are increasing Reasons why tenants can’t buy a home.
While 36% of renters say they prefer to rent, 65% report doing so because they cannot afford a down payment to buy. In addition, 44% said they couldn’t afford the monthly mortgage payments, and 40% said they didn’t qualify for a mortgage.
Related: Here is where the average monthly mortgage payment is the lowest in the United States
Among the report’s most surprising findings was that when asked how much one could spend on emergency expenses using only savings, 18% reported being only able to cover expenses of less than $100. Sixty-three percent said they could cover a hypothetical emergency expense of $400 (down five percent from the previous year).
Ongoing inflation also affected spending and fiscal pressure over the past year. 33% of Americans said inflation was their biggest financial challenge in 2022. Nearly two-thirds of people stopped using a product or reported using it less often because of inflation, 64% reported switching to a cheaper product, and 51% saw a decrease. into their savings in response to rising prices.
Related: Here are the cities where inflation is rising the most, according to a new report