BAM Key Details:

  • Fannie Mae’s National Housing Survey shows homeowners are increasingly worried about the ability to save money and afford necessities, including mortgage payments. 
  • With inflation outpacing wage growth, many have had to resort to using their previously built-up savings while also taking on more consumer debt to cover expenses. 

Results from the Fannie Mae National Housing Survey show an escalation in homeowners’ financial concerns—which include their ability to save money and afford necessities like mortgage payments. 

It’s no wonder, either. With inflation outpacing wage growth over the past year, homeowners and renters alike have increasingly turned to their previously built-up savings while also taking on more consumer debt just to cover basics like food, gas, medical bills, and housing payments. 

And as debt burdens rise, more renters earning 80% to 120% of the median household income are struggling to pay their bills, let alone save money for a down payment

That’s the rough outline of the challenges more American households are facing right now with the high cost of housing—and everything else. 

Painting a picture of household finances in 2022-23

While inflation appears to be cooling, consumer spending is so out of balance with disposable income that the personal savings rate hit a near-record low last fall of 2.4%. This is down from a more typical 7-9%. 

Meanwhile, outstanding revolving consumer credit (primarily credit cards) is growing fast, rising 17% on an annual basis last November. According to the Federal Reserve, this is the fastest pace of consumer debt growth since 1996. 

Predictably, consumer debt delinquency rates have also begun to rise. 

This unsustainable increase in consumer debt may soon reach its limit, which will likely impact the general economy as well as the housing and mortgage markets.

Renters who can’t save money—and who are struggling with consumer debt besides—are unlikely to qualify for a mortgage loan. 

Fannie Mae’s National Housing Survey examined some of the challenges consumers were facing from April to September of 2022, including the following three major concerns:

  • Ability to save money
  • Concerns over being able to afford necessities
  • Household debt

Responses to the survey helped paint a picture of household finances for many Americans at the beginning of 2023. 

Many respondents cited difficulty affording household necessities

Roughly a third of survey respondents said they expect their ability to cover everyday necessities like food (35%), medical care (34%), and gas (33%) will be put to the test in the next 12 months (as of September 2022). 

Across all three categories, consumers surveyed in September expressed greater concern than those surveyed in April. And among September’s respondents, 26% expressed concern about being able to afford future mortgage or rent payments—up from April’s 18%. 

Renters (39%) expressed this concern much more than mortgage holders (22%), but both groups’ expressed significantly more concern in September than in April: renter concerns increased by 8%, while homeowner concerns increased by 7%. 


Source: Fannie Mae

As of September, 28% of consumers reported not being able to save any of their income—up from 23% in April and pointing to a growing number at risk of depleting any existing savings should they suffer a job loss or any other shock to their income in a potential recession. 

Renters (35%) were more likely than mortgage holders (28%) to report not being able to save any of their income. But reports from mortgage holders grew more significantly from April to September (18% to 28%), compared to renters (32% to 35%). 

In the third quarter of 2022, consumer stress over their ability to make debt payments—with 35% at “very/somewhat stressed”—was higher than historical averages, primarily due to credit card debt. That response is 10% higher than it was the last time Fannie Mae asked the question in the second quarter of 2020—right at the beginning of the pandemic. 


Source: Fannie Mae

About one in five consumers (22%) report their debt is higher now than it was one year ago. Back in 2013, the share of respondents answering the same way was only 13%. 

It doesn’t help that the high interest rates charged by credit card companies make it much harder for Americans to make real progress with paying down debt, even when making regular, on-time payments. 

The increase in debt-related money stress was most common among renters aged 18 to 34, as well as among Black and Hispanic NHS respondents. 

Among those who said their debt burden was significantly higher than it was a year ago, 39% attributed that burden to higher credit card debt—roughly twice as many as those pointing to medical/health debt (21%) and auto loans (17%). 

Almost 50% of consumers aged 35 to 44—and more than half of those in households with incomes between 80% and 120% of the area median income—reported significantly higher amounts of credit card debt. 

When inflation drives up the cost of everyday necessities, and the interest rates on those debts rise, too, the size of those monthly payments becomes an even greater burden on households earning the median income or less. 

What this means for housing

As debt stress grows for renters, their ability to save money for a down payment on a home—let alone their ability to afford the median monthly payment on a mortgage—is further challenged. 

Unless this changes, it will likely continue to limit the number of first-time home buyers and further the ongoing demographic shift in home buying—one that favors wealthier consumers. 

In an annual survey by the National Association of Realtors (NAR), first-time home buyers accounted for only 26% of home purchases in 2022—down from 34% in 2021. That metric is now at its lowest level since NAR first started collecting data. 

Historically, around 40% of home purchases have been made by first-time home buyers. 

Meanwhile, a growing percentage of mortgage borrowers report struggling to make debt payments and not being able to save any of their income. That, in turn, suggests a growing percentage of borrowers may be vulnerable to becoming delinquent on their mortgage payments, especially if they were to experience a job loss or other shock to their income. 

To offset those dangers, consumers may cut back on their spending or make more drastic cuts to it, adding to the risk of a recession over the next 12 months. 

If that happens, it will likely reduce buyer demand for housing and impact home sales, home prices, and purchase mortgage originations. 

Top takeaways for real estate agents

Depending on your average price point, you may have already seen evidence of growing financial strain among potential home buyers in your area. Consumers who are struggling to improve their debt-to-income ratio—and who are finding it impossible to save money toward a down payment—are less likely to see now as a good time to buy a home

Still, there will be buyers and sellers motivated to transact regardless of market conditions. Get familiar with their pain points and gather the data and information they need to make smart decisions that will set them up for a better financial future. 

Ultimately, the trust you build will be worth far more than securing a deal with them right now.