Majority of Americans say inflation having higher financial impact than COVID-19
A majority of Americans (70%) say inflation has impacted their finances more severely than COVID-19, according to a recent survey by Real Estate Witch.
Some Americans have made potentially life-threatening sacrifices to save money including skipping meals (27%) and avoiding medical appointments and treatments (22%), the survey said. About 73% of survey respondents said they are stressed about their financial situation.
“Ongoing stress can have severe health consequences, something Americans don’t need while still at risk of contracting COVID-19,” Real Estate Witch said in its survey report. “Their stress is also manifesting in emotional strain. More than half of Americans (55%) have cried over their finances in the past year, and 51% have also fought with loved ones in the past year. American culture promotes perseverance, but it appears that most of the country is struggling to navigate the current economy.”
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Americans continue struggling with debt amid high inflation
As Americans deal with high inflation, many are struggling with paying off debt, the Real Estate Witch survey found.
Only a third of Americans think they can pay off their current debt within a year, the survey said. Another 32% think it’ll take between one and four years, while some say they’ll pay off their debts in five or more years, and about 6% say they’ll never overcome debt.
In addition, debt and the high prices of goods and services may be eating away at Americans’ savings. In fact, 45% of Americans have no emergency savings, and 38% believe they’ll deplete their savings in 2023, the Real Estate Witch report found.
“It’s recommended that adults have three to six months’ worth of expenses saved at any given time,” Real Estate Witch reported. “However, most Americans (65%) would be out of luck if they had an expensive emergency. Nearly 2 in 3 Americans (65%) say they couldn’t afford an unexpected bill of $1,000. Situations such as these likely contribute to the high-stress levels Americans are reporting.”
The demands of inflation and debt are keeping some people living paycheck-to-paycheck, the analysis found. More than half or 73% of adults have lived paycheck-to-paycheck at some point during the COVID-19 pandemic, including 44% who are currently doing so, the survey said. To make ends meet, 23% of respondents took on more credit card debt.
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Inflation preventing Americans from achieving homeownership
Inflation and the COVID-19 pandemic have had lasting effects on the housing market and rising prices are keeping many Americans from becoming homeowners, the Real Estate Witch study found.
Nearly three-fourths of respondents (73%) said inflation and high interest rates have affected their plans to buy homes, the survey found. On the other hand, only 23% said COVID-19 had an impact. Notably, 49% said they can’t afford a home at all.
When asked about the reasons why they don’t own homes, survey respondents gave these additional answers.
- I don’t have enough saved for a down payment: 42%
- I don’t think I would qualify for a mortgage: 29%
Economic realities have affected sentiments over homeownership over the past year, the survey found. Americans are 60% more pessimistic about the housing market than they were a year prior.
“The circumstances of 2023, in particular, are stopping people from achieving the American Dream,” Real Estate Witch stated. “Although 69% of Americans don’t think they could afford to buy a home this year, only 49% don’t think they can afford a home in general. This suggests that many renters hope the years to come will bring a more affordable housing market.”
In a recent report, Zillow forecasted home prices may decrease through 2023. Home prices are projected to drop by 1.6% throughout 2023, according to a panel of economists and housing experts polled for the Zillow Home Price Expectation (ZHPE) survey.
“The majority of experts are now predicting an outright decline in U.S. home prices in 2023,” Pulsenomics founder Terry Loebs said in a statement.
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