A new report from Redfin highlights the sacrifices Americans are making to afford their monthly housing costs. Redfin commissioned the survey conducted by Qualtrics in February and fielded to 2,995 U.S. homeowners and renters.
Redfin’s report zooms in on the 1,494 respondents (49.9%) who said they “sometimes, regularly, or greatly struggle” to afford their monthly rent or mortgage payments.
Redfin asked these respondents, “Which of the following, if any, changes or sacrifices did you make in the past year to afford your monthly housing costs, including mortgage or rent, insurance, parking, heating/cooling/electricity or homeownership association dues?”
For starters, about 1 in 5 have skipped meals (22%) and/or worked additional hours (20.7%) to bridge the gap, while 17.9% borrowed money from family or friends, and 15.6% have put medical treatments on hold.
The most common sacrifice among white and Asian/Pacific Islander respondents was skipping vacations. Black respondents were most likely to put in extra hours at work.
Americans of all generations are even dipping into their retirement savings to afford housing.
Overall, the most common sacrifice made was vacation time, with 34.5% saying they skipped vacations in the past year to afford their monthly housing costs.
Housing has become so financially burdensome in America that some families can no longer afford other essentials, including food and medical care, and have been forced to make major sacrifices, work overtime and ask others for money so they can cover their monthly costs. Fortunately, the country’s leaders are starting to pay attention, and homebuyers may get a reprieve in June if the Federal Reserve cuts interest rates, which would bring down the cost of getting a mortgage. - Chen Zhao - Redfin Economics Research Lead
13.5% OF MILLENNIALS USE RETIREMENT SAVINGS TO AFFORD HOUSING PAYMENTS
A surprisingly large share of millennials (13.5%) have dipped into their retirement savings to afford housing, though boomers were most likely to do this (27.5%), followed by Gen Xers (15.5%).
At 6.5%, Gen Zers were least likely to do so as few of them even have retirement savings.
By the numbers, millennials are the largest adult generation, and many are becoming homeowners at a time when both mortgage rates and home prices are high. The income needed to afford even a modest starter home has gone up 8% from one year ago, making many of today’s younger buyers more reliant on family money to cover their down payment.
