What You Should Know…
The pandemic has hit Americans hard: 43% report no emergency savings and 38% accumulated personal debts of $3,000 or more in the past year. But as vaccines become increasingly available, Americans are beginning to feel more optimistic about economic recovery.
One year into the pandemic, Americans are feeling the ongoing strain of the pandemic — and a welcome flicker of optimism.
The situation remains bleak, though, with the pandemic death toll exceeding 500,000 and approximately 10 million Americans still jobless. As states begin to reopen this spring, the pandemic has left in its wake deep partisan divides, racial strife, and a growing wealth gap between lower-income workers and those who can work remotely.
But the vaccine rollout that began in December provides fresh cause for hope, particularly for the nearly 70% of Americans who plan to become inoculated against coronavirus.
As of early April, more than 16% of the country’s population has been fully vaccinated. The Biden administration raised its vaccination goal, aiming to distribute 200 million doses by the end of the month, with many states opening or planning to open vaccine appointments to the general public.
With a major turning point in the pandemic in sight, we surveyed 1,000 Americans to learn more about how their lives have changed — and their expectations for the future. We found that, roughly one year into the pandemic, Americans are still coping with major blows to their personal finances, homeownership plans, and outlook on the national economy.
This report is part of an ongoing series first published on our sister website, Clever. Previously, we surveyed Americans to learn more about their financial well-being at the beginning of the pandemic (March 2020), one month in (April 2020), and six months in (September 2020).
Personal finance insights
- 61% of all respondents have lived pay check to paycheck at some point during the pandemic. Of those, 62% are currently living paycheck to paycheck.
- 43% of respondents said they don’t currently have any emergency savings.
- 59% of Americans have accumulated more debt since the pandemic began, with 38% taking on more than $3,000 in additional debt in the last year.
- Renters are 56% more likely to say they’re worse off financially now — and renters are 92% more likely than homeowners to rely on food stamps.
- Compared to last fall, Americans feel more optimistic about economic recovery — yet 51% predict the national economy won’t recover this year, and 39% believe their personal finances won’t recover in 2021, either.
Real estate insights
- One in four homeowners (25%) and renters (26%) missed at least one rent or mortgage payment during the past year.
- 43% of homeowners had plans to sell their home in 2020 or 2021 — but 65% delayed selling or decided not to sell altogether.
- Among homeowners who still plan to sell their home, 77% say they expect to list their property in 2021, suggesting that nationwide inventory might see a welcome bump.
Americans Are Still Living Paycheck to Paycheck, and Nearly Half Have No Emergency Savings
Americans are feeling the financial impact of the pandemic, which has burned through emergency savings and left many struggling to get by.
Last September, 62% of survey respondents reported they were living paycheck to paycheck. That number has held steady, with 62% of respondents reporting that they are currently living paycheck to paycheck as of March 2021.
Among respondents who are currently financially stable, 38% still say they lived paycheck to paycheck at some point during the pandemic.
Renters are particularly likely to be struggling. Among renters who have lived paycheck to paycheck at some point during the pandemic, 70% are currently struggling to make ends meet.
Americans’ savings accounts reflect the pandemic’s profound financial strain. Though experts typically recommend keeping three to six months of living expenses in an emergency fund, the pandemic has already stretched on for more than a year, draining those funds for many.
We found that 43% of respondents don’t currently have any emergency savings, up from 37% in September. Of those without savings:
- 28% spent their emergency savings since the pandemic began
- 22% spent their emergency savings prior to the pandemic
- 51% never had emergency savings in the first place
Among respondents who do have emergency savings, nearly one-quarter (24%) don’t have enough to last the recommended three to six months — and 51% expect they’ll run out of savings within the next six months.
As Americans became increasingly strapped for cash at the end of 2020, stimulus checks reached new levels of popularity, with 81% of likely voters hoping Congress would pass a second round of stimulus payments. In January, the Treasury Department and Internal Revenue Service began distributing a second round of $600 Economic Impact Payments. In mid-March, Congress also passed a $1.9 trillion COVID-19 relief package that included $1,400 stimulus checks.
Among our respondents, stimulus checks were the most popular financial relief measure, with 45% saying the money would make a positive impact on their financial situation.
Direct payments were more popular than more targeted measures such as rent or mortgage assistance (19%) and medical bill forgiveness (18%), indicating Americans need cash now so they can decide what financial needs to prioritize.
Though the $1,400 brought immediate relief, it’s far less than the personal debt Americans have taken on due to the pandemic: 74% of Americans we surveyed have non-mortgage debt — and 59% have accumulated more debt since the pandemic began.
This debt has accumulated rapidly: 38% of respondents took on more than $3,000 in additional debt in the last year alone.
For many, the prospect of paying off newly accumulated debt is daunting. Although 56% of respondents with debt hope to pay it off within 2021, nearly one-quarter (22%) predict it will take five or more years to become debt-free.
Research suggests that government measures to provide financial relief can still make a difference. According to a 2020 study published in Nature, direct government assistance to vulnerable populations was one of the top ten most effective methods of delaying the pandemic’s spread.
Renters Are More Likely to Struggle Financially During the Pandemic Than Homeowners
Although many Americans are struggling due to the pandemic, we found that renters are especially vulnerable to financial strain.
Compared to homeowners, renters are 56% more likely to say their financial situation has worsened due to the pandemic. Renters are also:
- 92% more likely to receive food stamps
- 64% more likely to borrow from friends family to make ends meet
- 37% more likely to have no emergency savings
- 20% more likely to report living paycheck to paycheck during the pandemic
As of late March 2021, approximately 10 million Americans were behind on their rent payments. We found that both homeowners and renters alike have struggled to keep up with their bills this year.
One in four Americans report having missed at least one rent or mortgage payment since the pandemic began. Of these Americans, 40% missed three or more months of payments.
While 51% missed a payment after coming to an agreement with their landlord or lender, 49% simply did not pay. Renters were slightly more likely (10%) than homeowners to report having missed at least one payment without an agreement in place.
Unfortunately, eviction moratoriums won’t erase the debt of missed rent checks — a sum that swelled to approximately $7.2 billion by December 2020. The Consumer Financial Protection Bureau recommends that renters who have fallen behind apply for emergency assistance, request some level of forgiveness, and arrange payment plans with their landlords.
Homeowners Are Still Delaying Plans to Sell — But Those Who Intend to Say They’ll List Their Property in 2021
Last year, the housing market took an abrupt dive as lockdowns and layoffs swept the nation.
Though the market bounced back by summer, many Americans have remained cautious, with many delaying plans to sell or purchase a home — limiting housing inventory and driving fierce competition among buyers.
We found that 69% of Americans believe it’s currently a good time to purchase a home. Mortgage rates remain historically low, with an average 30-year fixed mortgage rate at 2.93% as of April 1, compared to the 4.58% interest rate that was typical in March 2019.
Though 43% of homeowners planned to sell in 2020 or 2021, 65% delayed selling their homes or decided not to sell altogether.
Of the remaining homeowners, 25% still plan to sell their homes in 2021 without a delay or change of plans. Just 10% of homeowners sold their homes as planned.
This hesitancy has contributed to low inventory across the country. According to Realtor.com, February 2021 saw half the number of homes — or 207,000 fewer — listed compared to the same time last year.
Prospective home buyers also delayed their plans due to the pandemic. We found that 61% of renters planned to buy a home in 2021. Of those:
- 62% are holding off
- 22% plan to buy regardless of the pandemic
- 17% fast-tracked their plans
Until inventory rises, these buyers will be competing for limited housing supply. Fortunately, our analysis suggests that an inventory bump may be on the horizon.
Among people who still plan to sell their homes, 77% say they will list their properties before the end of 2021, with May, June, and September standing out as the most popular months.
Still, it may be some time before all homeowners feel comfortable listing their homes. Nearly one-quarter of prospective home sellers (23%) plan to delay until 2022 or later.
Americans Feel More Optimistic About Economic Recovery but Predict It Won’t Happen Until 2022 or Later
Though Americans feel more positive than they did in September, the majority believe life won’t return to normal for at least another year.
At least half of our respondents don’t believe the U.S. economy or their personal finances will recover until at least 2022. More than half (59%) predict their lives won’t return to normal until 2022 or later.
We found that some stressors are beginning to ease compared to September 2020:
- 42% fewer people reported being worried about paying everyday bills
- 44% less worried about being able to feed themselves and their family
- 34% less concerned about bankruptcy
- 20% less concerned about investment values
- 18% less concerned about their home value
- 18% less concerned about income/job stability
Americans remain worried about many everyday expenses, however. 61% of respondents’ financial situations changed as a result of the pandemic. Their biggest financial concerns include paying for unexpected costs (38%), job instability (37%), and paying everyday bills (30%).
|Financial Concern||Sept. 2020||March 2021|
|Paying for unexpected costs||37%||38%|
|Income or job stability||45%||37%|
|Paying everyday bills||51%||30%|
|Paying off loans||--%||29%|
|Getting into more debt||--%||26%|
|Running out of emergency savings||29%||26%|
|The value of non-mortgage investments||21%||17%|
|Foreclosure or eviction||--%||9%|
Overall, Americans are slightly more optimistic about the U.S. economy than they are about their personal finances. Just 30% predict their personal finances will recover by the end of 2021, while 38% predict the national economy will recover in the same timeframe.
Similarly, among respondents who are still waiting for lives to resemble pre-pandemic days, fewer than half (41%) expect life to return to normal by the end of 2021.
A minority of respondents indicated that their lives did not change due to the pandemic (14%) or already returned to “normal” (11%).
Economists caution that recovery will depend on global rates of vaccination and government interventions. Though the global economy is expected to bounce back, recovery is off to a slow start due to what the World Bank has deemed an “exceptional level of uncertainty” in the near-term.
But as Americans enter a second year of coping with the pandemic, hope is on the horizon. Vaccinations, stimulus payments, and an extended moratorium on evictions are all steps in the right direction, toward bringing stability, recovery, and future economic growth.
The data in this report were gathered from an online survey on March 10, 2021. The only restriction for participation was that respondents were 18 or older, lived in the United States, and were either paying rent or a mortgage on the home or apartment in which they lived.
We collected data from 1,000 respondents, who each answered up to 20 questions (some were dependent on answers to other questions, so not all respondents answered all of the questions).