Financial concerns plague more than half of Americans

by Kimberly Greene05 Jul 2019

Buyers today might be worried about any number of obstacles to their goals of becoming a homeowner, including a lack of inventory in their area and competition from investors.

The thing that keeps them up at night, though, is their personal finances.

Fifty-six percent of adult Americans have lost sleep over at least one financial concern, and one in three adult Americans is losing sleep over everyday expenses, according to a new Bankrate survey.

Other concerns causing restless nights are saving enough money for retirement, health care or insurance bills, the ability to pay credit card debt, and mortgage or rent payments.

There are generational differences when it comes to the results, too; Baby Boomers make up 54 percent of those adults losing sleep, while Generation X makes up 64 percent of those whose money issues as causing them to lose sleep. Millennials are the largest generation of homebuyers, but they’re still not all that confident in their financial security, with 58 percent of Millennials affected.

Although the overall number of Americans losing sleep over financial concerns is lower than it was three years ago, the current state of uncertainty and fear Americans are experiencing is somewhat incongruous with the facts that the U.S. is experiencing record low unemployment figures and interest rates, as well as historic economic growth.

The June Conference Board Consumer Confidence Index declined, following an increase in May. The Index now stands at 121.5, down from 131.3 in May. What’s more, the Present Situation Index, based on consumers’ assessment of current business and labor market conditions, decreased from 170.7 to 162.6; and the Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, decreased from 105.0 in May to 94.1 in June.

The decline in June put the Consumer Confidence Index at its lowest level since September 2017.

Part of that is because the reality on the ground differs than the overall picture for many Americans. Wage growth is slow, and a lot of people are worried about a looming recession sometime in the near future.

This may be one reason why borrowers are coming to the buying table with more varied sources of income. Another recent Bankrate survey found that 34 percent of Americans are using side hustles as a way to merely make ends meet, with 30 percent use the money earned to pay for regular living expenses.

Given the uncertainty that consumers have about their finances and the economy in general, even when potential borrowers reach out to inquire about getting a mortgage, there’s a good chance that they’re not completely confident in their ability to tackle such a large purchase. Originators who take a more advisory role to their clients or who partner closely with financial planners can help buyers ease any fears they might have about affordability, and get them into a better position to afford a mortgage now or in the future.

Maybe then they will finally get a good night’s rest.