ST. LOUIS–Approximately half of all Americans believe their savings will run out by the end of April, according to a new survey.
The survey of 1,000 people, conducted by Clever Real Estate, has found the coronavirus pandemic and the resulting economic shutdown have a significant number of people fretting over their financial futures. It also offers insights into the behavior of homeowners.
According to previous research by Clever, Americans were $14 trillion in debt before COVID-19 swept across the nation.
“That debt compounded with an expected 32% unemployment rate and an eerie air of uncertainty means the U.S. economy will likely take a hard hit,” Clever said in releasing its latest findings. “In short, America's financial and economic stability is being tested.”
The Survey
To investigate just how prepared Americans are for that test, Clever said it surveyed 500 homeowners and 500 renters on March 31, approximately two weeks after the first statewide mandate to stay at home was issued in California, to learn exactly how COVID-19 is affecting Americans financially.
Among the findings:
- Half of Americans believe their savings will run out before the end of April
- 27% of Americans share financial responsibility with someone who lost their job as a result of COVID-19. Nearly one-third also lost their jobs
- 25% of Americans have taken on additional debt due to COVID-19, and 28% of those who have already taken on additional debt as a result of COVID-19 have borrowed over $2,000; 5% have borrowed over $10,000
- 75% of Americans believe that the economic effects of COVID-19 will be worse than those of the 2008 Great Recession
- An overwhelming majority (96%) of Americans said social distancing is a necessary precaution
- Counterintuitively, nearly 40% think stay-at-home and shelter-in-place measures are excessive even though 96% of respondents reported practicing social distancing
Homeowner Insights
Among the findings in a survey of homeowners:
- 30% of homeowners had less than $1,000 in an emergency fund prior to the COVID-19 outbreak, and only 9% believe their savings will last the recommended 3-6 months
- 22% of homeowners don't have enough in savings to cover their mortgage for one month
- 27% of homeowners are worried about defaulting on their mortgages
- 55% of homeowners who planned to sell their home in the next 12 months either took their home off the market or are holding off on listing for sale as a result of COVID-19
- 16% of homeowners have reduced or suspended mortgage payments through an agreement with their lender, and 12% of homeowners are behind on mortgage payments as a result of the coronavirus
- Of the homeowners who were looking to sell their homes in the next 12 months, 85% changed their plans to sell as a result of the pandemic
- Nearly half already had their homes on the market and either pulled the listing (23%) or were forced to drop the listing price (27%), while an additional 31% of owners are holding off on listing their home for sale. In fact, only 15% of home sellers said the pandemic had not affected their plans to sell
- Another 65% have either delayed their search (48%) or completely stopped (17%) looking for homes as a result of the coronavirus outbreak. Some buyers, however, see this as an opportunity to find a bargain: 28% are still searching for homes, but are looking for cheaper prices
Renter and Homebuyer Insights
- Nearly half (46%) of the renters we surveyed said they have less than $500 in emergency funds
- 45% of renters don't have enough in savings to cover their rent payment for one month
- More than 80% of home buyers are delaying purchasing or are now planning to spend less due to COVID-19
- Nearly 40% of renters are concerned about evictions as finances tighten but only 11% have rent forgiveness or reduction plans with their landlords
The full survey findings are here.