March marks the one year anniversary since the United States declared a national emergency as a result of the COVID-19 pandemic in 2020. As the nation cautiously gets back to business (with Texas, Florida, and Georgia anxiously leading the charge), more people are able to see and feel the impact of the year of “vision.” A new report from GOBankingRates revealed some startling statistics regarding the financial state of many Americans.
The report shows that 36 percent of the 18 to 24 age demographic were hit the hardest by the financial strain of the pandemic. About 33 percent of people between the ages of 25 to 34 had to sign up for unemployment benefits for the very first time in 2020. Many accumulated debt throughout the year, to be specific, 67 percent of Americans relied on personal loans, credit cards, and business loans to stretch financial security over 2020.
“Obviously when two-thirds of the country has taken on debt due to the pandemic you are going to find that at least a little alarming,” said Julia O’Brien, associate researcher for GOBankingRates. ”What doesn’t surprise me is the amount ($1,000 -$4,999) being the largest section at 21%. With the average rent in for all homes in America during COVID-19 being $1,786 according to Zillow, that range of $1,000 – $4,999 amounts to a missed payment or two plus some other debt which could include not being able to pay off a credit card, car note.”
When it comes to mortgages and rent, 46 percent of Americans missed at least one mortgage or rent payment. Of the employees that were furloughed or laid off, 22 percent still have not been rehired. Meanwhile, 61 percent have confirmed that their employment status is secure for the remainder of 2021.
“I think it is both surprising and not. COVID-19 was devastating for a lot of people and businesses. Especially in late March 2020 when everything first started and shut down, the CARES act was just being passed and so many people lost their jobs and rent was still due on April 1st,” GOBankingRates content data researcher Andrew Murray says. “So I imagine a lot of people who said they had just missed one payment had that occur sometime in those first two months of COVID.”
It has only been a short period since President Joe Biden’s $1.9 trillion coronavirus relief plan was approved by the House and Senate. But, there’s no question that some people are more in need of that third stimulus check than others.
“Many of them are wanting to sell so they can move where they can find work,” said Erik Wright, owner of New Horizon Home Buyers. “We are also seeing people in more expensive markets, trying to sell and move somewhere more affordable before they get too far behind in payments. We have seen some banks trying to work with people through loan modifications, but we’ll see how effective those will be. One thing is for sure, banks are trying to figure out some kind of way to work with people. Financially, they can’t just forgive back owed payments, but they don’t want to foreclose on tons of homes all at once either. Nobody wants a repeat of what happened in 2008.”
