FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 03 July 2015

Household Finances Improving, But Pockets Of Concern Remain

by Atlanta Fed

As the U.S. economy continues to strengthen, household finances are also on the mend. Yet despite this modest improvement, sizable pockets of the population remain financially vulnerable, according to a recent report from the Federal Reserve Board of Governors.

Now in its second year, the 2014 Survey of Household Economics and Decisionmaking (SHED) polled more than 5,800 households on such issues as well-being, saving and spending, access to credit, housing, and retirement planning. The results of the October survey are included in the Board's Report on the Economic Well-Being of U.S. Households in 2014.

The survey results show a consumer who is slightly better off financially than a year ago - 65 percent of respondents said they were "living comfortably" or "doing okay." That level is higher than in 2013, when 61 percent responded that way. Americans were also more optimistic about their financial futures, with 29 percent expecting their incomes to rise in the following year.

Financial safety net fragile for many

Despite these bright spots, the survey also shed light on the financially precarious situation in which many U.S. households find themselves.

Nearly a third of respondents were not prepared to withstand a three-month financial disruption - such as the loss of a job or government benefits - either by drawing on personal savings, selling assets, or borrowing from friends and family.

Many individuals would also have trouble covering a $400 emergency expense, with nearly half of respondents reporting that they would not cover the cost or would have to sell something or borrow money to pay it.

Financial, credit barriers holding back homeownership

A series of questions on housing-related issues highlighted increased optimism among homeowners while also providing insight into the financial challenges that may be holding back more Americans from homeownership.

Homeowners were generally optimistic about the current and future value of their homes, with 39 percent saying that they expected prices to rise in the year following the survey. Reflecting further improvement in housing, a relatively small share of respondents said they had either kept their home off the market despite wanting to sell or had listed their home but been unable to sell.

Among renters, the vast majority (81 percent) indicated a preference for homeownership, yet many cited financial and credit challenges that prevented them from doing so. The most common reasons given for not owning a home were that they could not afford the down payment or would not qualify for a mortgage. "This suggests that perceived financial and credit barriers to homeownership are a crucial driver of why some individuals are renting rather than owning, despite the stated preference of many renters for homeownership," the report noted.

The survey highlighted several other "pockets of concern," including:

  • Access to credit: A sizable share of the population reports being unable to secure credit through traditional channels such as a bank loan. Among those who were denied credit, who were offered less credit, or who expected credit to be denied, 38 percent turned to alternative financial services such as payday loans or check cashing services.
  • Education: People who attend college but do not finish an associate's or bachelor's degree are disproportionately likely to be behind on their loan repayments and feel that their education was not worth the cost, according to the report.
  • Retirement: Many individuals lack confidence in their ability to manage their nest eggs. More than half of those with retirement savings in an IRA, 401(k), or some other self-directed account said they were "not confident" or only "slightly confident" in their ability to make the right investment decisions. "This lack of confidence poses a potential risk on the path to retirement for younger generations of workers for whom self-directed retirement accounts are increasingly the norm," the report noted.


Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Minsky’s Theory of Asset Prices: Why Minsky Was NOT a Neo-Monetarist
Many (But Not All) Dynamics Improving But Federal Tax Receipts Are Down
News Blog
15 Recent Science Discoveries You Wont Believe
December 2016 Industrial Production Up - Now In Expansion
December 2016 CPI: Year-over-Year Inflation Rate Now 2.1%
Advent Of Trade Reporting For U.S. Treasury Securities
Infographic Of The Day: Why Pets Make Us Happy
Early Headlines: Asia Stocks Mixed, Oil Up, Dollar Down, Obama Issued Fewer Exec. Orders, German Inflation 1.7 Pct, Pound Rally Temporary?, China Prop. Investment Stabilized And More
Democracy - 'End of History', Really?
Preview Of Dirk Ehnts' New Book
Britons Are Very Pessimistic About The EU's Future
Sherlock Holmes And The Strange Case Of Anti-intellectualism
Average Gasoline Prices for Week Ending 16 January 2017 Fell Almost 3 cents
What We Read Today 17 January 2017
Massive Alligator Shocks Tourists As He Nonchalantly Strolls By On Walking Path
Investing Blog Technical Summary 17 January 2017
Apple Takes The Wireless Headphone Market By Storm
Opinion Blog
Trump's 'Great Gambit'
More Proof The MMT's "Jobs Guarantee" Can't Work
Precious Metals Blog
Gold's 2016 Gain Indicates A 19% Surge In 2017
Live Markets
18Jan2017 Market Update: US Markets Mixed, Expect Wall Street To Close Lower, Crude Prices Slipping Sharply, US Dollar Remains Weak, Gains In Tech Stocks Offset A Weakness In Retail Sector
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved