Financially stressed homeowners make sacrifices to stay in place
The financial reality of homeowners has shifted in recent years because real estate tax, insurance premiums and maintenance costs have risen next to the housing values, so that the budgets of home buyers are further tense. As a result, many find it more difficult to keep up with, even if their houses grow in value.
“Homeowning is intended to offer stability, but for many that is no longer the reality,” said Jeffrey Glass, CEO of HomeTap, in a statement. “Our survey confirms what we hear from homeowners every day: increasing costs make it more difficult to manage daily costs, plan the future and navigate the financial ups and downs of life.
“Although we believe in the long -term value of the homeowner, we also believe that homeowners should be able to possess a house and still invest in other life priorities.”
Financial stress is now a decisive aspect of the homeowner, concluded homeap, in which more than half of the homeowners (54.5%) felt moderate in extremely financially stressed. In the meantime, 45% say that rising costs for home ownership are their most important financial care for the coming year.
Those who feel moderately to extremely financially stressed are still determined to stay in their homes, with 29.9% even to get a second job or side if the housing costs continue to rise.
Generation divides are the experience of stress. Millennials (age 25 to 44), for example, were more than four times as chance as baby boomers (61 to 79) to mention mortgage payments as their top source of stress (14.6% versus 3.2%).
In the meantime, Baby Boomers reported more stress of insurance and maintenance costs, which are often bound by the combination of outdated houses and fixed incomes.
As the costs for all generations rise, a large proportion of homeowners (79.5%) say that housing costs rise faster than their incomes, while 62.3% report that a higher proportion issues income on housing than ever before.
As a result, this has delayed other financial priorities, because 44.4% say they are unable to make progress on important goals. And more than a third says they have reduced their pension contributions or postponed paying debts.
More than half (52.5%) have delayed the improvements of housing improvements, 49.5% have cut back on groceries and 56.3% has reduced the expenditure for holidays. A similar share (55.6%) has also returned to hobbies and personal expenses, a considerably higher rate than the total population of homeowners.
Despite the roadblocks, the belief in the homeowner remains: three out of four homeowners (75.6%) say that owning a house is still part of the American Dream, but that sentiment varies per generation.
While 62% of the baby boomers say that homeowner still feels a major performance, only 50% of the millennials agree, and 16% say that it now feels more like a financial burden.
“Owning a house today includes more considerations than people realize,” said a homeowner in Arizona who brought in an investment via HomeTap. “Although it is not the version of homeowners who once defined the American dream, my house is one of the few financial tools that I have that feels like it can still work in my favor.”
