Palo, Alto, California, June 12, 2024 (GLOBE NEWSWIRE) -- As costs of living have skyrocketed over the past several years, more than two-thirds (67%) of homeowners say they are struggling to keep up with their monthly expenses, according to a new study from Point, a leading home equity investment platform. (1)
Although the pace of inflation has slowed somewhat since its peak in 2022, consumer prices have still risen 3.4% in the past 12 months and 22.7% over the last five years. (2) Point’s survey found that about half (53%) of homeowners say their expenses rose during the past year, with 40% saying they spend somewhere between $300 and $1,000 more each month than they did a year ago. For a household earning the median annual income, that increase nets out to between 4.8% and 16.1% of their yearly earnings. (3)
“Homeowners are feeling the sting from years of consumer price increases,” said Eddie Lim, co-founder and CEO of Point. “Home improvements, utilities, and homeowners insurance have all gotten more expensive, not to mention rising costs for everyday essentials like groceries. These expenses are boiling over, threatening an untenable situation for many homeowners.”
A strong majority (78%) of homeowners say the current economic climate has negatively impacted their finances. As a result, many homeowners are adjusting their spending: 43% say they’ve stopped unnecessary spending on discretionary items like travel or eating out, and 39% say they’ve delayed home repairs or maintenance. Nearly half (48%) of homeowners say they are searching for even more ways to fill the financial gap, including taking on a new job, working more hours, borrowing money, getting a personal loan, or taking on credit card debt.
One area of opportunity for homeowners to help ease a financial burden is their home itself. Only one-fifth (20%) of homeowners say they plan to leverage their home in some way to help mitigate rising costs in the coming year. Homeowners collectively have trillions of dollars in home equity, but previous Point research found it can be difficult for most homeowners to access it through traditional methods like cash-out refinancing or HELOCs.
While some homeowners aren’t particularly optimistic about their financial futures – 35% report feeling at least somewhat unsure about their finances for the next 12 months – most plan to do something about it. About 84% of homeowners plan to make changes to improve their financial situation in the next 12 months, with working more (41%) being the most commonly cited action.
“Homeowners work hard to earn the equity in their home, but traditional systems make it difficult for many people to access that wealth when they truly need it,” said Lim. “There are times when being able to leverage one’s home equity to pay off existing debts, start a new venture, or cover unexpected expenses could put a homeowner in a better long-term financial position. That’s why we created Point’s Home Equity Investment - so homeowners have a way to tap into their home equity when they need it, no matter what their current economic or employment situation may be.”
For more details on the study, the full report can be viewed here.
About Point
Point is the leading home equity platform making homeownership more valuable and accessible. Point’s flagship product, the Home Equity Investment (“HEI”), empowers homeowners to unlock their equity to eliminate debt, get through periods of financial hardship, and diversify their wealth – without adding to their monthly expenses. Point has worked with more than 10,000 homeowners, unlocking $1 billion in home equity. Point’s HEI enables investors to access a previously untapped asset class – owner-occupied residential real estate. Founded in 2015 by Eddie Lim, Eoin Matthews, and Alex Rampell, Point is backed by top investors, including Westcap, Andreessen Horowitz, Ribbit Capital, Greylock Partners, Bloomberg Beta, Atalaya Capital Management, Alpaca VC, and Prudential. The company is headquartered in Palo Alto, CA. For more information, please visit www.point.com.
(1) For this survey, we asked 1,096 homeowners about their monthly expenses and financial situation using Survey Monkey’s online panel. The survey was conducted on April 24, 2024.
(2) https://fred.stlouisfed.org/series/CPIAUCSL
(3) The median household income was $74,580 in 2022, the most recent data available from the U.S. Census Bureau.
Amanda Woolley Point 3603191738 awoolley@point.com
