Federal Reserve: Financial well-being has declined significantly

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The financial well-being of Americans has declined significantly over the past year, according to a new report by the Federal Reserve. In 2022, 73% of Americans reported that they were doing “at least well” financially, five percentage points less than in 2021. Only 34% of those who were “well” reported “live comfortably”

Also, a tight real-estate market and an increase in mortgage rates are the reasons why renters cannot buy a house.

While 36% of renters said they prefer to rent, 65% reported doing so because they can’t afford a down payment to buy. Additionally, 44% percent said they couldn’t make a monthly mortgage payment and 40% said they didn’t qualify for a mortgage.

Related: This is where the average monthly mortgage payments are the lowest in the US.

Among the most surprising findings of the report is that when asked what was the highest amount one could spend on a emergency expense using only savings, 18% reported that they could only cover an expense of less than $100. Sixty-three percent said they could cover a hypothetical emergency expense of $400 (five percent less than the previous year).

Persistent inflation it has also affected spending and financial stress over the past year. 33% of Americans named inflation as the biggest financial challenge in 2022. Nearly two-thirds of people stopped using a product or reported using it less due to inflation, 64% reported switching to a cheaper product and 51% saw a reduction. in their savings in response to higher prices.

Related: These are the cities where inflation is rising the most, according to a new report