With the pandemic and growing financial pressures drawing the attention of consumers, many are putting off homebuying plans and other future goals, a new study shows.
NeighborWorks America, an affordable housing nonprofit organization, recently released its annual Housing and Financial Capability survey, which looks at the state of consumers’ finances and homeownership trends across the country. The survey found that this year, the COVID-19 outbreak is wreaking havoc on consumers’ finances, leading to a slowdown in the push toward homeownership, particularly among Black Americans.
Shifting priorities in a changing financial landscape
For many consumers, the last few months have ushered in a new economic reality. Financial anxiety is on the rise as workers struggle with layoffs and job security. In response, consumers are focusing most of their attention on meeting their day-to-day financial needs.
In fact, 44% of survey respondents said that paying everyday expenses was their top priority, followed by:
- Paying down debt (20%)
- Saving for future expenses (15%)
- Building up an emergency fund (9%)
At the same time, consumers seem to be putting long-term goals on the back burner. Among respondents, 15% have slowed their progress toward purchasing a home. Notably, that percentage is even higher among Black Americans, with 24% putting off plans for homeownership.
The reasons for these delays in financial plans likely vary. While some may be experiencing financial challenges, an earlier survey suggested that some buyers may be waiting to see if home prices might fall.
Regardless of the reason, the delay in moving forward with homebuying plans is also likely to contribute to growing disparities in homeownership. While 60% of Americans overall are homeowners, only 40% of Black Americans and 46% of Hispanic Americans own their own homes. Among Asian Americans, more than half — 53% — are homeowners.
The survey found that the homeownership rate in the Black community is already on the decline, with the percentage of Black homeowners dropping 8% since last year.
An uncertain push to meet financial goals
Homeownership is not the only financial goal that some consumers are having trouble achieving amid the challenges posed by the current economic environment, the survey found.
Among consumers who consider it a priority to build up their emergency fund, nearly a quarter — 22% — are not confident they will do so. Likewise, 23% of those who list saving for future expenses as a priority are not confident they will achieve their goal. On top of that, 16% of those who aim to pay down debt don’t believe they will be able to do so, while 12% of those who are working to manage everyday expenses have some fear they won’t be successful.
Some consumers have even had to get a roommate or move in with others because of their financial challenges. Among all respondents, 13% moved in with family, friends or roommates because of financial challenges or housing concerns, and 11% said they found others to live with them so they could split the costs. The survey found this trend is even more prevalent among Black Americans, with 20% moving in with family, friends or roommates, and 16% finding others to move in with them to split the costs.
Methodology: Public opinion firm KRC Research surveyed 1,602 adults on behalf of NeighborWorks America from May 8, 2020 to May 15, 2020.