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. 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
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 1
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Durable Goods New Orders Improved in February 2017
Why NASA Won't Send Humans To Venus
Rail Week Ending 18 March 2017: Short Term Rate of Growth Slowing
How Taxes And Transfers Affect The Work Incentives Of People With Low And Moderate Income
How Tourism Affects China's Current Account Surplus
Infographic Of The Day: The Habits Of Highly Successful Entrepreneurs
To Where The Maple Syrup Flows
The U.S. Has The Most Expensive Healthcare System In The World
Five Maps That Will Change How You See The World
What We Read Today 16 March 2017 - Special Public Edition
Hate Groups In The U.S. Are Flourishing
What We Read Today 23 March 2017
March 2017 Kansas City Fed Manufacturing At Highest Level Since March 2011
Investing Blog
Early Headlines: Asia Stocks Mixed, Dollar, Oil Up, Gold Down, Health Care Vote Today, Calif. Solar, Russia And Poison, Mumbai Bridge, Sanctions Cause Suffering In N. Korea, And More
Tesla Is Playing The Long Game
Opinion Blog
Time To Stop Rewarding Economists For Bad Behaviour
The American Dream: An Endangered Ethos
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
24Mar2017 Pre-Market Commentary: Looks Like Markets Will Flatline
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