November 3rd, 2019 8:03 AM by Jackie A. Graves, President
One in five U.S. homeowners say they feel house rich but cash
poor, according to the newly released Hometap Homeownership Study. The rising
costs of homeownership nationwide prompted nearly 20% of 675 homeowners
surveyed to classify themselves as feeling “house rich, cash poor” most of the time,
according to the study produced by Hometap, a firm that provides loan
alternatives for tapping home equity. Seventy-three percent of respondents say
they feel “house rich, cash poor” at least some of the time.
there were pockets of homeowners who felt house rich, cash poor—we see that
every day in our work—but were surprised to find that one in five feel that way
so often,” says Jeffrey Glass, CEO of Hometap. “Mortgage rates are at historic
lows, which is encouraging more people to buy, but despite 45 million
homeowners with excess equity, we’re seeing really conservative
behavior—perhaps a lasting effect of the 2008 financial crisis. Unless wages
start to rise relative to home values, we’ll see more homeowners falling into
the house rich, cash poor category.”
percent of homeowners cited the main stressor in homeownership as uncertainty
over their future income; the next stressor was the anticipated costs of home
maintenance and repairs, at 81%.
may be particularly feeling cash-strapped. Sixty percent of millennial
homeowners surveyed say they agree or strongly agree that housing costs make it
difficult to achieve their financial goals. Nineteen percent say that 50 to 100
percent of their monthly income goes toward their mortgage payment. Thirty-six
percent said they’re also paying off student loans.
homeowners say they expect the house rich, cash poor issue to worsen. Sixty-six
percent say housing costs are rising faster than income, and 77% expect that
gap to get worse. Further, 57% of respondents said they can’t find solutions to
alleviate being house rich and cash poor. Seventy-three percent said they do
not want to take on traditional financing options, such as home equity loans.
study from Hometap makes clear that homeowners think there’s a problematic gap
between housing costs and income,” says Jeremy Sicklick, CEO of HouseCanary.
“But what homeowners need to keep in mind is that on average home values tend
to increase steadily across the U.S. It seems likely that homeowners will start
to see their properties as usable financial assets that allow them to be more
authoritative in managing their financial situations.”
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