Americans Report Highest Level Of Financial Well-Being Since 2013

Americans reported their highest level of financial well-being since 2013 in the Federal Reserve Board’s Economic Well-Being of U.S. Households in 2021 report.

The data comes from the Board’s 9th annual Survey of Household Economics and Decisionmaking (SHED), which was conducted in October and November 2021.

“The SHED results provide valuable insight into Americans’ financial conditions during the late fall of 2021. This important perspective helps the Federal Reserve better understand the economic challenges that existed during that phase of the pandemic recovery,” Federal Reserve Board Governor Michelle W. Bowman said.

In Q4 2021, 78% of adults reported either doing okay or living comfortably financially, while financial well-being rose among all racial and ethnic groups measured.

Hispanic adults saw a significant increase in well-being. This is in line with recent data that the rate of Hispanic homeownership is steadily increasing. More than 48% of Latinos now own homes. Young Latinos are more likely to buy between the ages of 18 and 24 than the general population, and 8.3 million Latinos were mortgage-ready in 2021, twice the number from 2015.

Parents also reported large gains, with three-fourths saying they were doing at least okay financially, up 8% from 2020. This is at least in part due to the Child Tax Credit, which 70% of adults living with their children under the age of 18 said they received monthly in 2021. The most common use of CTC money was supplementing savings (43%), 29% reported using it for their mortgage or utilities.

Almost two-thirds of adults owned their homes in 2021, though that number dropped for young adults and Black and Hispanic adults. Only 29% of 18 to 29-year-olds owned a home, while 84% of 60+-year-olds did.

Variation by race and ethnicity impacted each age group. Of white adults, almost 7 in 10 owned their home, while only 4 in 10 Black adults and 5 in 10 Hispanic adults did.

Black homeownership has been a lightning rod this year amid reports that the racial gap in home buying is growing and high-profile lawsuits accusing lenders of discrimination. Lawmakers and members of The Black Homeownership Collaborative announced an initiative in 2021 to help 3 million Black people become homeowners by 2030.

Almost one-fourth of mortgage-holding homeowners refinanced in 2021, including 3 in 10 mortgagees with an income of $100,000. However, only 16% of those with income under $50,000 refinanced.

Homeowners with monthly mortgage payments of $2,000 or more refinanced the most (35%), while 15% of those with payments of $500 to $749 refinanced.

Of renters, 17% were behind on their rent at some point in 2021, of which 8% were behind at the beginning of the survey. The total outstanding back rent at year-end was between $9.3 billion and $10.9 billion.