Although credit card usage has benefits, such as helping a person build their credit score and earn points for travel or home renovations, it can also open a gateway to serious personal debt.

Semya-Moya recently conducted a survey asking 1,000 American credit card users about their spending and debt. Here are 11 findings from the study that illustrate the impact credit card debt is having on Americans — and how they’re dealing with it.

1. Credit card debt is an extremely widespread problem

Being in debt is a leading cause of stress, but it’s hardly a rare occurrence. About 82% of U.S. credit card users have fallen into debt at some point. Nearly two-thirds (61%) of credit card users are currently in debt, owing an average of $5,875.

Credit card debt remains a persistent problem that can take years to pay off. About 40% of those in credit card debt have been underwater for more than five years, including 15% who have been in debt for at least 15 years.

2. Millennials are the most indebted

While debt is a cross-generational issue, about 67% of millennials carry credit card debt, the most of any generation. They also carry a higher amount of debt, with an average balance of $6,794.

Accordingly, millennials are the biggest spenders. The average American spends $1,506 on their credit cards each month, but millennials spend $2,410 per month. By comparison, baby boomers spend an average of $794 and Gen Zers spend $1,626.

3. Bad spending habits take a share of blame

Although there are countless reasons why a person might find themselves in debt, there’s no denying that it sometimes comes down to bad financial habits. 

Nearly half of people with credit card debt (49%) blame it on excessive spending. In fact, about 2 in 5 credit card users (43%) admit they tend to spend more than they earn, and 22% say they don't track their spending at all. 

4. Credit cards are essential for necessities

People aren’t just spending money on artisan coffees or lavish vacations. Over the past few years, many Americans have become more dependent on their credit cards to pay for basic necessities. Nearly half (48%) rely on their credit cards to cover necessary expenses, such as housing, groceries, and utilities.

5. Credit card debt wreaks havoc on the future

Not only does carrying credit card debt hurt consumers in the short term, but it also prevents them from investing in their futures. About 39% of those who have been impacted by credit card debt say it prevented them from saving for retirement.

Debt also makes achieving the American dream of homeownership more difficult. About 22% of those impacted by credit card debt say their debt has kept them from buying a home. 

6. Many credit card users have missed payments at some point

It isn’t just the amount of debt people carry that’s causing problems, it’s also their inability to repay what they owe. About 43% of credit card users have missed at least one payment in the last five years, with 78% of that group reporting they've missed more than one. 

The most common reasons people provided for missing payments involved having to pay for unexpected emergencies (33%), utility bills (33%), or rent/mortgage payments (27%). 

7. Credit cards cost more than people think

Americans are spending more paying back their credit card debt than they think. About 41% think average credit card interest rates are less than 20% — and 13% of card users think rates are under 10%. In actuality, the rates reached an all-time high this summer of 20.7%. 

It’s costly to keep carrying a balance and having to pay interest. Americans spend an average of $18,072 on their credit cards each year.

8. People with credit card debt spend less than those without

Having debt will limit a person’s buying power. People without credit card debt spend 9% more per year than people with it. That’s perhaps unsurprising when Americans say about 30% of their monthly income goes toward paying off credit cards.

9. It isn’t just credit cards

Although credit card debt is the most stressful form of debt for Americans, it isn’t the only one. About 81% of Americans with credit card debt also have another form of debt. This includes auto loan debt (33%), personal loan debt (31%), and medical debt (28%). 

What does the future hold for credit cards?

Despite the stress that comes with credit card debt, Americans don’t see them going away. Nearly two-thirds of credit card users think the U.S. will one day become a cashless society reliant on credit cards. That includes 31% who believe it will happen in the next decade.

With credit cards playing such a prominent role in the country’s future, it’s clear Americans might need to increase their financial literacy, so they can protect their money in the short term and long term.

This article was first published on Semya-Moya.

The post How Credit Card Debt Is Hurting Americans in 2023: 9 Things to Know appeared first on Semya-Moya.

The U.S. economy is the largest in the world. Despite the country's wealth, however, the U.S. still struggles to provide enough housing for its citizens, with higher rates of homelessness than other developed countries.

Roughly 582,000 Americans experienced homelessness in 2022, according to the Department of Housing and Urban Development. The lack of affordable housing options, a rising cost of living, and other societal issues have played a role in the nation's homelessness crisis.

Below, we'll break down seven factors contributing to the country’s persistent problems with homelessness.

1. Homes are unaffordable in areas that struggle with homelessness

One of the biggest causes of homelessness is the price of housing. A new study by Home Bay, a real estate education platform, found a strong correlation between high home values and homelessness in major U.S. cities.

In an analysis of the nation's 50 largest metropolitan areas, the study found that cities with above-average home values also had higher rates of people living in homelessness. The state of California was singled out as a prime example, with its cities having the highest home prices and highest rates of homelessness.

At the city level, San Jose leads the pack on both fronts. It has the country's highest average home value at more than $1.3 million and the highest rate of homelessness — 637 people living without housing for every 100,000 people in the city.

Even if individuals experiencing homelessness aren't ready to buy a home, increasing property values often lead to rising rental prices, making housing of all types less affordable.

There are other contributing factors to the high rates of homelessness in California. The temperate weather and available social programs make it more accessible to people without homes. But it’s impossible to ignore the impact of the high cost of housing.

2. Rental prices are on the rise

Similar to home values, areas with expensive rents are especially likely to have high rates of homelessness. And in 2023, renters face increasingly high costs nationwide, particularly in major cities.

In the 12 cities with the highest rates of homelessness, renters pay an average of $2,274 per month — in comparison to $1,596 a month in cities with lower-than-average homeless rates, according to Home Bay's findings.

Los Angeles and San Diego, two of the most expensive cities for renters, rank in the top 10 for rates of homelessness. Plus, three other cities in the top 10 — San Jose, Denver, and Seattle — have the fastest-increasing rental prices in the country. The rise in prices means individuals struggling to afford housing in these areas are especially likely to slip into homelessness.

3. Income isn't keeping up with housing costs

Housing prices continue to grow faster than Americans' incomes. Since 1985, the average annual income has tripled, but it still lags 7% behind the growth in rent prices.

Rent prices have not only outpaced incomes, but inflation, too. If rent prices grew at the same rate as inflation, the average rent today would be $939 a month, rather than the actual average of $1,163.

Home prices have also outpaced inflation. If home prices grew at the same rate as inflation since 1970, the median home price today would be $177,788 – rather than $408,100.

The takeaway is that housing prices have grown faster than other important economic indicators. That means that — even among Americans who have seen their incomes rising at the usual pace — many people are less able to afford housing than they would have been in the past.

4. High health care costs

Health care costs are another contributor to homelessness in America. The U.S. spends twice as much of its GDP on health care as other developed countries, according to data from the Commonwealth Fund.

The high cost of health care and insurance means many Americans skip routine check-ups and preventative care. In fact, 24% of retirees say they've skipped medical treatments to save money, and 18% of retirees have outstanding medical debt.

This, in turn, can lead to more severe, and more costly, health issues down the road that can stop a person from being able to afford their mortgage or rent.

5. Discrimination can contribute to homelessness

Despite legal protections given in the Home Mortgage Disclosure Act of 1975, institutional racism continues to play a role in access to housing for marginalized communities.

Black Americans are twice as likely to be rejected for a mortgage than white Americans, even with similar incomes. Other reports have found that Black Americans pay more in rental costs.

The result is a disproportionate rate of homelessness among Black Americans, who make up about 13% of the U.S. population but 40% of the homeless population.

6. Inadequate space leaves many without shelter

Family conflict, including domestic violence, is a leading cause of homelessness. People fleeing spousal abuse and LGBTQ youth are particularly vulnerable populations facing homelessness.

While many cities offer resources and shelter for homeless populations, there isn’t always enough space for everyone in need. According to the National Network to End Domestic Violence, more than half of victims' unmet requests for services are for housing and emergency shelter.

7. Not enough resources for mental health and addiction care

U.S. housing officials estimate that 36% of those experiencing chronic homelessness have a history with substance use, mental health problems, or both. These issues can make it harder to hold a job, making one more at risk of losing their income or housing.

If a person loses their job and home and doesn't have a strong support network, the search for food or short-term shelter becomes a priority, making less time for long-term planning regarding employment and stable housing.

Accessing the treatment needed to get back on track is harder than one might imagine. About "43% of U.S. adults who say they needed substance use or mental health care in the past 12 months did not receive that care," a 2022 report found.

This article was first published on Semya-Moya.

The post 7 Reasons Why the U.S. Struggles With Homelessness appeared first on Semya-Moya.

The cooling real estate market should be good news for buyers. After several years of high competition and soaring home prices, the extreme seller’s market of 2020-2022 appears to be over.

But with rising interest rates keeping prices high and lowering demand, neither buyers nor sellers have the upper hand in 2023, making it a disappointing "nobody’s market." About 51% of Americans think it's a bad time to sell a house, and 53% say it's an even worse time to buy, according to a new survey from Semya-Moya.

With buyers and sellers equally poised for disappointment, here's how they're responding to current housing market conditions.

1. They're compromising their priorities

Buying a home is one of the most significant investments people will make in their lifetimes. When making such a big financial commitment, buyers understandably want to be satisfied with their purchase.

However, 93% of recent buyers say they had to compromise on their priorities — up from 80% in 2022. Compromising is often necessary to find a home, but it can also lead to disappointment.

About 93% of buyers and 95% of sellers say they had regrets about their real estate transactions in 2023. That’s up from 72% and 90% in 2022, respectively.

For buyers, purchasing a home that requires too much maintenance is the most common regret (33%), followed by buying too quickly (30%, and spending too much money (28%). The most common regret among sellers is paying too much in Realtor commission (28%).

2. Difficulty finding homes continues to grow

Although the market is less competitive for buyers in 2023, house hunters generally think it's getting more difficult to buy a home. Buyers were 47% more likely to say purchasing a home was more difficult than expected in 2023 than they were in 2022.

Buyers say they experienced more difficulty in 2023 because:

• 45% exceeded their budget.

• 42% had to accept a high interest rate.

• 42% found home prices were still too expensive.

Home prices remain elevated because of the housing shortage across the U.S. Many sellers aren't willing to list their home and buy a new one at a higher interest rate, leaving buyers with limited options.

3. Buyer demand is waning

High mortgage rates and expensive home prices have suppressed buyer demand, meaning homes sit on the market longer.

Sellers who still expect their homes to fly off the multiple listing service are in for a rude awakening. In 2022, 55% of homes sold in under a month, but that percentage dropped to 28% in 2023.

The longer a home spends on the market, the more likely it is that the seller will have to lower the asking price or make concessions, such as repairs, with the buyer. Sellers may also have to pay the full price of closing costs, whereas in recent years, they could ask the buyer to assume some of their costs during negotiations.

Overall, 21% of sellers regret that their home sat on the market too long.

4. Buyers and sellers are feeling financially strained

Three-fourths of buyers (75%) had to pay more than the U.S. average price of $516,500 for their home. It's no wonder more than half of recent homeowners (58%) say they overpaid for their home.

The high cost of homeownership is leaving its mark on buyers. Instead of feeling excited about settling into their new home, buyers are feeling the financial strain of new debt.

More than half of home buyers (56%) have felt in over their heads financially since buying their home, and 27% say their overall financial situation has deteriorated.

What's more, 62% of buyers say they have struggled to make their mortgage payments on time each month. As they struggle to pay their mortgage, 56% of buyers have taken on additional debt to maintain their lifestyle in an inflated economy, and 29% say their non-mortgage debt burden has gotten worse since purchasing their home.

New homeowners have had to resort to credit cards with high interest rates to pay for food, utilities, and other amenities. This trend is even more prominent among first-time buyers who are 11% more likely than repeat buyers to have to borrow additional money after homeownership.

5. Sellers aren't making as much profit

In 2022, sellers could expect to fetch high prices for their homes after a short time on the market because of great demand for homes. As demand wanes and buyers' purchasing power decreases, many sellers have had to lower their price.

As bidding wars become less common and price reductions increase, sellers aren’t making as much money, and nearly 1 in 5 (19%) regret that their home didn't sell for enough.

More than half of sellers (57%) made less than $50,000 on their home sale in 2023. By comparison, sellers made $65,000 in 2020, and they made about $94,000 in 2021.

The post 5 Reasons Why Nobody Feels Like a Winner in Today's Housing Market appeared first on Semya-Moya.

The report, published by real estate education platform Home Bay, found that 35% of renters do not consider homeownership a part of the dream — largely due to it being considered unrealistic.

That shift in mindset is understandable when 72% of renters surveyed say they’ll never have enough money to buy a home. Finding an affordable home isn’t easy, either. Since 2020, the average home price in the U.S. has skyrocketed by $150,000.

This grim outlook leads to 61% of renters saying that Gen Z and millennials will never reach the same rates of homeownership as baby boomers.

Although owning a home might seem difficult, there are still many benefits that make it a goal worth the hard work and sacrifice.

1. Owning a home offers more independence

When you own your home, you set your own rules. A landlord or leasing company can have a lot to say about how you live.

They can decide how many guests you can have over and when. They can tell you what internet and waste removal companies to use and which ones you can’t. They also have a right to enter your residence at any time.

And with 56% of renters saying they’re generally suspicious of their landlords, it’s nice to be in charge of your domain as a homeowner.

2. More stability from month to month

Nearly half of renters already believe they’re being overcharged for rent, and what you pay won’t improve over time. Since 2000, rental prices have increased 77% while median income is only up 16%, according to U.S. Census and housing data.

As a homeowner, you’re in more control of what you pay every month.

While a landlord can, and will, increase rent over time, your monthly mortgage payment is more stable regardless of inflation. You may be able to reduce what you pay each month by refinancing your loan down the road.

3. A smart investment for your future

It’s important to save for the future. Not only do you want a stash of cash for emergencies, but 66% of renters say it’s very important for them to have savings to live comfortably during retirement.

Along with a 401(k), owning a home is one of the best ways to invest for retirement. Homes appreciate over time, which means your equity — the part of the home you own — will also increase over the years.

And unlike the stock market, your home’s value will continue to grow and is less likely to experience drastic downturns in value.

4. The potential to make money

Not only does homeownership give you a means for building wealth in the form of equity, but it can also put more cash in your pocket now.

You can make your residence a partial investment property by renting out a room or guest house to a long-term tenant or as a vacation rental. Business travelers and families, in particular, are often on the look for a cozy place to stay off the beaten path.

Vacation rentals also give you more flexibility. You can make your room or home available for rent as little or as often as you like. That means you can block off dates when you might need the space or a break.

5. Get the space you need

Owning a home often means having more space than an apartment unit. Whether you’re looking to expand your family, work from home, or have a hobby that requires a workspace, flexibility in space will enhance your lifestyle.

While rentals will always be limited in size, when you buy a home, you have the freedom to expand onto your property or customize spaces for your needs. Plus, any updates you make can add value to your home.

6. You can make the home your own

When living in a rental property, you likely won’t be able to do much to personalize your home. That means living with whatever paint color and finishes the landlord makes. You may also be restricted from hanging up pictures and artwork or curtains.

As a homeowner, you’re free to update your home to taste. Just so long as your renovations are consistent with city ordinances.

7. It’s the "good" kind of debt

With 71% of renters saying becoming debt-free is a very important financial milestone they hope to reach, it’s understandable they may be hesitant to take on more debt in the form of a home mortgage loan. But not all debt is created equal.

Home loans are considered good debt, because unlike credit card debt — where assets decrease in value while interest grows — your home will continue to grow in value. Plus, even at 6.5%, the interest on a home loan is less than what you’ll pay on credit cards, which can be as much as 25%.

8. It comes with tax benefits

As a homeowner, you are eligible for tax perks that aren’t available to renters.

Depending on where you live, you may be able to deduct the interest you pay on your mortgage, insurance premiums, and property tax. New or first-time buyers are also often eligible for tax credits that can increase your return.

Check with a real estate expert to learn more about tax benefits in your state.

9. You can find a path that works for you

Although many people think you need a 20% down payment and 30-year mortgage to buy a home, there are many other options. For example, you can make a deal to purchase from a family member, or sign a rent-to-own agreement.

Rent-to-own programs allow you to make rental payments over a period of time that go toward homeownership. And it’s an approach that appeals to renters — with 68% saying they’d consider going with a rent-to-own property.

Related articles

How to Find Rent-to-Own Homes Near Me (2023 Guide)

Learn how to find legitimate rent-to-own homes near you. Our guide breaks down how to find and vet rent-to-own listings before committing to one.

How to Find a Real Estate Agent That's Right for You

This guide on how to find the best real estate agent is packed with useful tips and information, based on hundreds of hours of research and expert interviews.

Home Buyer Rebates: Get Cash Back When You Buy!

You can get cash back when you buy a home if you receive a home buyer rebate. We'll show you where they're available and how to get one on your next purchase!

The post 9 Reasons Why Owning a Home Beats Renting appeared first on Semya-Moya.