2019 Consumer Financial Literacy Survey reveals the most significant
obstacles faced by prospective homeowners, underscoring the need for homebuyer
counseling and education.
Raleigh NC (April 24, 2019) – As Financial Literacy Month is
recognized throughout the nation, Consumer Education Services Inc. (CESI) and the
National Foundation for Credit Counseling® (NFCC®) are working together to spotlight
the results of the 2019 Consumer Financial Literacy Survey. This year’s survey, conducted online by Harris Poll in
March 2019 among 2,086 U.S. adults ages 18 and older, reveals prominent barriers to home ownership for Americans who have attempted to buy a home.
The
survey reveals that many Americans face increasing barriers to homeownership
despite the good news about the economy. In fact, one out of every two U.S.
adults who have taken steps to purchase a home of their own say they have faced
barriers.
“Challenges have always existed along the road to
homeownership but it is clear that some obstacles can lead people to abandon
the pursuit of their goal,” said Mike Croxson, CEO of CESI “Purchasing a home
in today’s market requires a level of knowledge and preparedness that is
greater than ever before. CESI is a resource available to educate and prepare
all individuals and families before they enter the homebuying process.”
Top homeownership barriers reported in this year’s survey
include:
Lack of Funding for
Down Payment
A lack of funding for down payment or closing costs tops the
list this year as the most common challenge. Savings has been a common
challenge for some who have difficulty managing debt while balancing a
household budget. Fortunately, most have non-retirement savings. More than half
with non-retirement savings are keeping their funds in a standard savings
account. Regardless of where someone may be in their journey to grow personal
savings, nonprofit housing counselors can be assistive toward identifying ways
to help make homeownership possible while growing personal savings.
Existing Debt
Three in five U.S. adults have had credit card debt in the
past 12 months, and nearly two in five indicate their household carries such
debt from month-to-month. Not surprisingly, more than half struggle to minimize
their debt, primarily due to unexpected financial emergencies. Credit cards are
known to be among the costliest forms of debt to manage and can be equally
challenging to repay. Credit card interest rates for people with average credit
scores are nearly 18% APR. Knowing credit cards are frequently used to cover
emergency expenses in the absence of savings, makes it easy to understand how
some may feel as though they are spinning their wheels trying to reduce the
balances they owe.
Nonprofit credit counseling agencies like CESI provide personalized
credit counseling assistance to people who want to take back control of their
debt without turning to risky, get out of debt quick schemes.
Limited Budget
Options
The survey revealed that about two in five U.S. adults, a
proportion that has held roughly steady since 2007, say they have a budget and
keep close track of how much they spend on such things as food, housing, and
entertainment. On the one hand it is encouraging to see that the number who
regularly save has not diminished over time, but it is also disappointing that
there continue to be more who do not follow these healthy financial habits.
Nonprofit credit counseling agencies are also a resource to help everyone
succeed in reaching their savings goals, no matter their starting point.
Poor Credit History
or Low Credit Score
A low credit score due to lack of credit history or an unsatisfactory
record of debt repayment can be a major setback, especially when hoping to
qualify for a mortgage. In either scenario, there are a range of options for
restoring credit health while staying on track for home ownership. Many helpful
resources are available online or in the community through free or affordable
programs offered by CESI.
The survey clearly demonstrates the need for financial
counseling and education for potential homeowners, but it also reveals the
level of awareness of such resources. If they were to have financial problems
related to debt, 23 percent of adults, or almost 56 million Americans[1],
indicate they would reach out to a professional non-profit credit counseling
agency for assistance.
About the Survey
The 2019 Financial Literacy Survey was conducted online
within the United States by The Harris Poll on behalf of the NFCC (National
Foundation for Credit Counseling) between March 8th and March 13th, 2019 among
2,086 U.S. adults ages 18+. For complete research method, including weighting
variables and subgroup sample sizes, please contact the NFCC at press@nfcc.org.
About CESI
Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve. CESI helps consumers achieve financial freedom by offering a complete life cycle of services including: credit counseling, debt management, housing counseling, student loan solutions, financial education and pre/post-bankruptcy counseling. For more information, please visit cesisolutions
[1] Calculation based on U.S. Census Bureau’s 2016
Current Population Survey (CPS), which estimates there are 244.81 million
adults ages 18+ residing in the United States: 244.81M x 0.24 = 58.75M.
This article was syndicated and originally appeared on the CESI Debt Solutions website.
