The U.S. Federal Reserve Board announced the release of its new Report on the Economic Well-Being of U.S. Households (2013) on Thursday, August 7th. This annual report offers a snapshot of the self-perceived financial and economic well-being of U.S. households, based on answers from thousands of Americans to the Board’s 2013 Survey of Household Economics and Decision-making.
The data from the report can be used to derive important insights into numerous topics of current relevance to household finances, such as housing and living arrangements, credit access and usage, educational and student loan debt, savings (including retirement savings) and health expenses.
Federal Reserve 2013 Economic Well-Being Report details
The survey data showed that, as of September 2013, many households were doing relatively well, but that sizable fractions of the U.S. population were showing symptoms of real financial stress. More than 60% of respondents reported that their families were either “doing okay” or “living comfortably” financially, but 25% said that they were “just getting by” and a further 13% said they were “struggling”.
Furthermore, many households continued to duffer from the effects of the recession, with 34% replying to the survey that they were somewhat worse off or much worse off financially than they had been five years earlier in 2008, and 34% reporting that their financial status was about the same.
Homeowners more positive on housing market
Homeowners are currently generally positive on the outlook for the housing market. A good percentage of homeowners anticipate house prices in their neighborhoods to move up in the year following the survey, with 26% expecting an increase in value of 5% or less and 14% expecting an increase of more than 5%. Less than 10% of homeowners thought that house prices in their neighborhoods would drop over the next year.
The Federal Reserve Board report noted that an increasing number of renters implied an interest in homeownership, as the most common reasons for renting rather than owning a home were not enough money for the down payment (45%) and an inability to qualify for a mortgage (29%). Just under 10% of renters responded they were currently looking to purchase a home.
Perception of credit availability remains low
A large number of respondents felt the availability of credit was still relatively low as if September 2013. Just over 31% had applied for some type of credit in the prior 12 months, and around one-third of those who applied for credit were rejected or offered less credit than they applied for. Furthermore, 19% of put off applying for credit because they were worried they would be rejected. More than half of respondents were confident they would qualify for a mortgage if they applied.
Fed: Educational debt a significant issue
Nearly 24% of the population holds some form of educational debt, with 16% having a debt for their own education, 7% for their spouse/partner’s education, and 6% having debt related to their child’s education. According to the Federal Reserve Board report, the average amount of debt for the respondents’ own education was $25,750, for their spouse/partner’s education $24,593 and for their children’s education $14,923. Among those who had educational debt of their own or for a family member, the average total of all education debt was $27,840, with a median amount of $15,000.
Of note, a number of households are struggling to keep up with their educational debt, with 18% reporting they were behind on student loan payments, including over 9% with loans in collections.