The 2019 Consumer Financial Literacy Survey reveals the most significant obstacles faced by prospective homeowners, underscoring the need for homebuyer counseling and education. As Financial Literacy Month is recognized throughout the nation in April, Advantage Credit Counseling Service 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 homeownership 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 Rebecca Steele of the NFCC. “Purchasing a home in today’s market requires a level of knowledge and preparedness that is greater than ever before. Advantage CCS is a reputable resource available to educate and prepare all individuals and families before they enter the home buying 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 increasing 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 Advantage Credit Counseling Service 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. Visit our free online credit counseling service page to find out more: https://www.advantageccs.org/services/credit-counseling
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’s 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 Advantage CCS.
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, indicated they would reach out to a professional non-profit credit counseling agency for assistance. Taking that important step is as easy as reaching out to a counselor by visiting https://www.advantageccs.org or by calling toll-free 1-866-699-2227 and asking for the Housing Department.
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 [email protected].
Here’s a great infographic that breaks down all the data and results: