Recent surveys suggest that renters and homeowners alike are feeling the strain of rising housing costs. (iStock)
Rising housing costs are forcing renters and homeowners to make tough decisions, according to a recent national survey. investigation.
As a result of rising housing costs, 20% of renters and 8% of homeowners say they’ve had to relocate and move into a smaller space. Additionally, one in five respondents (21%) said they’ve withdrawn or are considering withdrawing money from retirement savings to cover housing costs. Additionally, 40% of homeowners have put off important property repairs because of the high cost or because they needed to spend money on other financial priorities.
The cost of houses and apartments continues to rise and is a major driver of inflation. Home buyers are struggling with mortgage rates that have remained near 7% for 30 years, while home prices are That’s up more than 40% compared to the pre-pandemic home-buying boom.The outlook for the housing market is dire, with 66% of respondents expecting the market to perform worse over the next 12 months, even as the Federal Reserve begins to cut interest rates, according to the survey.
“Many Americans are feeling financially strained, but that pain is most pronounced among low-income earners and renters, who are reacting strongly to the daily budget pressures caused by rising housing costs and rising inflation,” said Cathy Bostjancic, chief economist at Nationwide. “At the same time, macroeconomic conditions are improving, with wages catching up with inflation. This tension between the rapid price increases of the past few years and the shifting bigger picture makes today’s economy difficult to understand.”
If you are considering buying a home, it is a good idea to compare different lenders to find the best mortgage interest rate. Visit Credible to compare different lender options and choose the one with the best interest rate.
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Homeowners cut insurance coverage to save money
Homeowner’s insurance rates have risen 55% over the past four years as losses pile up and insurers struggle to recoup costs, according to a recent Guaranteed Rate Insurance report. report.
According to Nationwide, rising insurance costs are making homeownership more of a financial burden, and consumers everywhere are looking to cut costs. More than three-quarters (76%) of respondents said they have reviewed or are considering reviewing their insurance policies, and 25% are looking for ways to save on premiums on their existing policies. Nearly one in five (18%) said they plan to reduce coverage on their existing policies.
“As consumers focus on how to best manage their finances in this uncertain economic climate, insurance agents can be valuable partners in helping people understand how to manage the sometimes delicate balance of saving money in the short term without exposing themselves to greater financial risk down the line,” said Casey Kempton, president of Nationwide’s Personal Insurance division.
If you have a mortgage, you’re usually required to have homeowners insurance, but you don’t have to be tied to a particular insurance company. If you want to save money on your home insurance, shop around for the best rates. Credible helps you compare home insurance rates from major insurance companies in one place.
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Rising home prices are top concern for young voters
Roughly 91% of Gen Zers rank home affordability as the most important issue when deciding who to vote for. In fact, home affordability ranks higher than other issues, including the economy, abortion rights, gun rights, preserving democracy and foreign wars, Redfin recently said. investigation Said.
President Biden has asked Congress to invest more than $175 billion in affordable housing efforts. White House statementThe Biden administration proposes using some of the funding to build and preserve millions of affordable housing units for rent or ownership, including accessory dwellings and manufactured homes. The administration also proposes using the money to provide incentives to state and local governments to reduce barriers to affordable housing development.
Biden also proposed a new Neighborhood Homes Tax Credit, a proposed federal initiative that would pump $16 billion to boost housing stock and $10.1 billion to boost home prices, making them more affordable for homebuyers. Down Payment AssistanceThe tax credit is provided on the condition that a low- or moderate-income homeowner occupies the home.
Biden is also calling for Congress to pass a bill that would provide a $10,000 tax credit to first-time homebuyers and first-time home sellers, split over two years as $400 monthly payments. The credit would be equivalent to lowering the average mortgage interest rate by 1.5 percentage points over the two-year period.
Former President Donald Trump’s second term Federal Government Reform and Reorganization PlanOne plan is privatization Fannie Mae and Freddie Mac To promote competition in the housing finance market and create a system that encourages sustainable homeownership.
If you want to see if you qualify for a mortgage based on your current credit score and salary, consider visiting Credible, which allows you to compare multiple mortgage lenders at once.
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