51% of U.S. homeowners are not prepared to handle unexpected $500 bill
TEMPE, Ariz., Feb. 20, 2025 /PRNewswire-PRWeb/ -- U.S. homeowners are expressing significant levels of pessimism and uncertainty about the economy, with 40% indicating they feel worse off financially than a year ago. A new survey from Unlock Technologies reveals concerns about the homebuying market, rising spending and debt levels, and inability to handle an unexpected bill.
"Some measure of uncertainty looms for U.S. homeowners in the year ahead," says Michael Micheletti, chief communications officer at Unlock. "The start of 2025 finds homeowners facing a difficult economic landscape, marked by rising expenses, increased debt burdens, and a general lack of optimism regarding the housing market."
Lack of emergency fund savings underscores economic uncertainty
More than half (53%) of homeowners feel uncertain or pessimistic about the U.S. economy – and half think the country will face a recession within the next five years.
Fueling the pessimism is the state of consumer finances. Sixty-five percent of homeowners report having less than $5,000 in an emergency savings fund. Among those with annual household incomes under $100,000, more than a quarter (27%) have no emergency savings at all. Without an adequate stash of cash tucked away for a rainy day, an unexpected $500 expense or bill would be problematic for 51% of U.S. homeowners.
"While maintaining an emergency fund is important for everyone, it's especially so for homeowners," says Micheletti. "They must be ready to handle unexpected expenses such as appliance repairs, exterior maintenance and higher-than-average utility bills at any time."
The lack of savings is especially problematic given that nearly half (48%) of U.S. homeowners anticipate spending more this year than they did in 2024 to cover household expenses. Across all income groups, nearly a third of respondents report that they have more credit card debt than a year ago. Even among homeowners with annual household incomes of $200,000 or more, 27% are carrying more debt than a year ago. In the event of a financial windfall, nearly half of homeowners say they would prioritize paying off debt.
Economic pessimism extends to home buying, selling
The pessimistic sentiment homeowners are exhibiting on the economy extends to home buying and home selling.
- More than half of U.S. homeowners (54%) think home prices are going to increase in the next 12 months.
- Two-thirds (66%) believe mortgage rates will increase within the next 12 months.
- Three out of four (76%) do not believe 2025 will be a good year to buy a home. This is most pronounced among those with annual household incomes of less than $100,000, with 80% indicating they don't believe that, or aren't sure whether, 2025 is a good year to buy a home.
- Sixty percent say they don't believe that, or aren't sure whether, 2025 will be a good year to sell a home.
Home equity plans, interest in no-loan option
Nearly 1 in 10 (9%) U.S. homeowners say they are planning on pulling equity out of their home in 2025. Among this group, 57% say they are considering using a home equity loan to access their home equity, while 48% are considering a home equity line of credit. Potential uses and needs influencing their plans are:
- Home improvements: 47%
- Paying off debt: 40%
- Paying medical bills: 31%
While only 9% of homeowners are planning to tap their home equity this year, 42% say they would consider accessing their equity if it were possible to do so without a loan or taking on another monthly payment.
"Many homeowners holding substantial equity in their homes may not yet realize that home equity agreements (HEAs) can meet this exact need," says Micheletti. With an HEA, a homeowner can receive cash upfront in exchange for a portion of their home's future value. Since it is not a loan, there are no monthly payments."
Generational differences
Survey results showed some significant differences in findings between generations.
- Economic uncertainty: The majority of Gen Z and millennial homeowners indicate feeling positive about the U.S. economy more so than Gen X and Baby Boomer homeowners.
- 56% of Gen Z homeowners and 51% of millennial homeowners say they feel fair or optimistic.
- Only 45% of Gen X homeowners and 46% of Baby Boomer homeowners say they feel fair or optimistic.
- Financial windfall: Among Gen Z homeowners, 15% say taking a vacation would be the first thing they would do if they received a financial windfall. Among millennials, 11% prioritized vacation. But only 5% of Gen X homeowners and 4% of Baby Boomers said the same.
- Unexpected expense:
- 74% of Gen Z homeowners say an unexpected expense of $500 would be problematic.
- 64% of millennial homeowners say an unexpected expense or bill of $500 would be problematic.
- 59% of Gen X homeowners say an unexpected expense or bill of $500 would be problematic.
- 36% of Baby Boomer homeowners say an unexpected expense or bill of $500 would be problematic.
Commissioned by Unlock Technologies, the survey of 2,002 homeowners throughout the United States was conducted by Atomik Research Jan. 28-Feb. 3. The margin of error is +/- 2%, with a confidence interval of 95%. Atomik Research, a part of 4media group, Inc., is a creative market research agency.
About Unlock Technologies (http://www.unlock.com)
Founded in 2020, Unlock Technologies is a financial technology company providing products and services that help consumers solve financial challenges and improve their financial health. The company's flagship product is its home equity agreement, a financing option for homeowners who want to access the equity they have built in their homes without taking out a loan.
Media Contact
Michael Micheletti, Unlock Technologies, 415-359-6985, [email protected], www.unlock.com
SOURCE Unlock Technologies
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