Latest news with #Achieve
Forbes
5 days ago
- Business
- Forbes
Why Is Housing So Expensive? It All Comes Back To Workforce
At a recent Achieve team dinner, the discussion turned to someone's friend, a recent business school graduate, who was raising a search fund in a bid to acquire multiple heating, ventilation, and air conditioning (HVAC) installation and maintenance businesses. Oddly, several colleagues also knew other recent MBAs who were attempting similar 'HVAC rollups.' Coincidence? An HVAC rollup is a long way from the well-traveled B-school path of joining an investment bank or consulting firm. The conversation pursued whether this was, in fact, a trend. Search funds are by no means new, although it appears they've become more popular for new MBAs. But all agreed on one thing: if there was a meme about new business school grads attempting HVAC rollups, it was indisputable. I doubted it and bet Achieve Principal Cassidy Leventhal $10. Well, the meme-savvy Gen Z analysts began looking and, within seconds, found this one. I paid Cassidy her $10. And although I conceded the trend (and would never underestimate the tendency of MBAs to follow one), the affair of the HVAC rollup meme led me to suspect there's a meme for pretty much everything. Turns out it's not limited to HVAC. New business school grads are also attempting to roll up roofing, plumbing, and landscaping companies. These businesses are easy to understand. So it could be a reaction against complex tech and AI. But it's also because no matter what happens in the economy, 330 million of us need a place to live, and tens of millions are having an extraordinarily hard time. America is missing between four and eight million homes. As in any shortage, prices rise. Adjusted for inflation, new homes cost twice as much as they did in 1960. So the existing housing stock is increasingly out of reach for low- and middle-income families, particularly in coastal states. The shortage of affordable housing is a gargantuan problem that limits quality of life and economic opportunity in nearly every community while leaving nearly a million Americans – including 150,000 children – without a home. The only solution is to build more new houses and apartments. With a shortage of around a million units, California is Ground Zero of the housing crisis. Homes in California cost more than twice the national average. So six million Californian families rent rather than own with two million spending more than half their monthly income on rent. So far California has attempted to tackle the problem by forcing cities and towns to allow apartments in neighborhoods of single-family homes and threatening to strip land-use authority from municipalities that don't approve new housing more quickly. Nonetheless, California's housing crisis continues to grow. What we need more of. getty The fundamental problem is that it's more expensive than ever to build new homes. The cause isn't tariffs on Canadian steel and lumber, at least not yet. It's labor. There are about 250,000 unfilled jobs in the construction sector. Builders can't find enough carpenters, plumbers, or electricians. Without enough new tradespeople, the workforce is aging; since 2018, there's been a 6% drop in the percentage of construction workers below the age of 55. To replace laborers who've labored long enough, builders need to recruit nearly 750,000 new workers each year. And that number is from the Biden years, before the country decided illegal immigrants were the cause of all our problems. (Immigrants – legal and not – constituted over 40% of California's construction workforce.) It's not only building new homes; it's maintaining existing homes. Every year America needs to produce over 40,000 new HVAC technicians. If we don't, things might get uncomfortable. And some recent business school grads might find their rollups at risk. When there aren't enough workers, builders pay more. When Engineering News-Record initiated its construction cost index for non-residential buildings, labor was 38% of total construction cost. Today it's 81%. For housing, Procore, the leading SaaS platform for construction management, reports labor is as much 60% of total cost. And when builders don't have available crews, they turn down projects. The result is that new houses and apartments don't get built and the ones that do get built cost a lot more. Builders aren't totally helpless. Their ability to find new workers isn't limited to driving their F-150s to the Home Depot parking lot to see who happens to be standing around. They can also drive to the nearest high school and try to sell students on a future in home construction. The problem is that students won't be productive on day one, or maybe in year one. They need apprenticeships, internships, or similar earn-and-learn pathways to make the trades attractive: jobs that pay a living wage from the drop, with the promise of making much more as they master the trade. But these programs are expensive to set up. Builders need to invest in recruiting as well as developing and delivering training, both formal and on-the-job. Which means convincing experienced workers to play ball. And finding and paying someone to manage it all, not to mention mentoring. While trade unions help, they don't address builders' biggest constraint: paying workers who aren't going to be productive for months, and maybe much longer. Also, unions are disincentivized to increase the supply of new workers, which could depress the wages of their members. It turns out homebuilders are singularly ill-suited to make these investments. My friend Bob Lerman, co-founder of Apprenticeships for America, alerted me to a new paper from the National Bureau of Economic Research which surfaces a remarkable fact: 40% of single-family housing employees work in firms with fewer than five employees and 63% work for companies with fewer than 10 employees. This means two things: first, an opportunity for recent business school grads to roll them up; second, a constitutional inability to invest in earn-and-learn pathways. Homebuilding may be America's last mom-and-pop business. The NBER paper identifies the culprit: local land-use regulation and permitting. Each city and town sets its own ground rules (and its own revenue-generating permitting fees), making it prohibitive for builders to undertake bigger projects or operate across jurisdictions. Many communities require builders to engage in outreach to neighbors to gain approval, or at least quiet critics likely to attend a planning meeting. Whereas communities organize to protest big construction projects orchestrated by big, bad, out-of-town developers, critics are less likely to show up for small-scale projects or go against small, local builders. The result is small projects built by small builders. Various studies have documented a decline in productivity in the building sector since 1970 – a dramatic reversal from the prior 30 years. Not coincidentally, 1970 marked the beginning of the local land-use regulation boom. The paper finds a strong correlation between areas with stricter, iconoclastic rules and smaller, less productive builders. Smaller builders are less productive because they don't invest in new technologies or new and more efficient building methods. And they don't invest in apprenticeships, internships, and other earn-and-learn pathways. Which means they don't have enough workers. Which means they end up spending more on labor for each project. Hence a recent Wall Street Journal article on Father Judge, a Catholic high school in Philadelphia where companies are actively recruiting students into entry-level jobs in the trades. These include the local transit system, submarine manufacturers, an operator of nuclear power plants, a defense contractor, and a chain of auto body shops. But nary a homebuilder. Why is America capable of manufacturing pretty much everything except homes? Because the vast majority of homes are custom-built on site – 'stick-built'– vs. mass produced or prefabricated. Prefabricated homes are built in factories, then transported to the site and assembled. More than a century after the assembly line revolutionized manufacturing, large manufacturers of durable and consumer goods capture 80%+ market share; in housing, it's only 13%. One reason is lack of competition: shipping costs make it prohibitive to offshore homebuilding. But domestic prefabrication – bringing the assembly line to housing – is possible and reduces labor costs. Canada, which is experiencing an even greater housing shortage, is making a big bet on prefabrication. The newly elected Liberal government has promised $25B in loans to prefab housing manufacturers. If the U.S. made a comparable investment, millions of new houses and apartments would be prefabricated and builders with sufficient scale to invest in factories would be able to invest in apprenticeships, internships, and other earn-and-learn pathways rather than putting together a crew from whomever happens to be standing around the Home Depot parking lot. It's not only homes. Lack of earn-and-learn pathways and the resulting labor crunch also explain why construction costs for roads and bridges have gotten out of control. And why America can't seem to build big things like subway line extensions. And don't get me started on the tram at Los Angeles International Airport: under construction for over six years, perhaps because I've never seen anyone working on it. Or high-speed rail in California, which depresses everyone who looks at it. But I'd trade public infrastructure for affordable homes. Out-of-control construction costs aren't only limiting the number of units being built, but also what's getting built. Because less expensive units produce less profit, homebuilders have shifted to higher cost housing rather than units low- and middle-income families can afford. This luxury shift also creates a vicious circle as custom features and advanced technology require specialized workers, further fueling the cost of labor. The result is even less affordable housing. Which makes life even harder for those struggling with unemployment or underemployment and lack of career pathways – the very thing that's making homebuilding more expensive. The shortage of earn-and-learn pathways stems from America's unique college-for-all approach to career launch, a trend that also dates from around 1970, and a trend that's led to taxpayers investing $1,000 in classroom-based, tuition-based, debt-based career launch infrastructure for every $1 invested in work-based, earn-and-learn career launch infrastructure. This imbalance is particularly problematic for the trades, which are better learned on the job than in a classroom. But the overall track record isn't great: Just like college-for-all – a policy set by elites who went to college decades ago – local land-use and permitting rules are set by people who bought custom, on-site, stick-built homes decades ago. And just like college-for-all is no longer affordable for all, stick-built homes are no longer affordable for all. Particularly for those in greatest need of education and housing. Both education and housing have become games rigged in favor of wealthy incumbents – older Americans who've already checked both boxes – while young Americans are left behind. While holding out hope for reform on both fronts at all levels of government, one way to kill two birds with one stone is to scale investment in earn-and-learn pathways to careers in the building trades. Builders should be incentivized to recruit students from vocational high schools like Father Judge, but also any grad with an interest in a trade apprenticeship regardless of prior skills or experience. Because that's what apprenticeship is for. We need affordable new homes. But to build affordable new homes, we need to scale investment in earn-and-learn pathways to flood the (construction) zone with new tradespeople. We can't have one without the other. If housing costs too much, we need to continue to chip away at NIMBY local land-use rules while beginning to cover the cost of trade apprentice training in full and subsidizing the wages of apprentices until they become productive. And the funding should be formula-based and simple for a small builder to tap. Perhaps some underemployed members of Gen Z will build memes about this. Because they're clearly not building homes.
Miami Herald
5 days ago
- Business
- Miami Herald
What is debt-to-income ratio and how does it affect you?
You don't need a finance degree to have money smarts. Understanding a few simple terms can help you lead your best financial life. One of those terms is DTI, or debt-to-income ratio. It's an important concept because lenders use DTI to determine whether you can afford the loan you want. Achieve says understanding your DTI can give you an important edge when you're looking for a home equity loan or another kind of loan. Definition of DTI (debt-to-income ratio) DTI, or debt-to-income ratio, is the percentage of income you spend on your debts and housing each month. DTI doesn't consider the total amount of debt you have. Just how much you have to pay each month. How to calculate DTI To calculate DTI, add up your housing payment and the minimum payments on all your debts. Divide the total by your total income. If your income is $5,000 per month, and your debt and housing payments total $2,500 per month, divide $2,500 by $5,000. 2,500 ÷ 5,000 = 0.5 (50%) There are a few rules: The income you'll use is your total before-tax income, not your take-home pay. To be counted, income must be ongoing and include every bill. General living expenses like food, income taxes, utilities, fuel, and childcare don't count toward your include the minimum payments on your credit include extra-but optional-payments you make toward your include housing costs. If you rent, it's your rent. If you own, it's your mortgage payment, including principal, interest, taxes, insurance, and HOA include the required monthly payments on your loans. Include car loans, personal loans, student loans, and other debts you're paying off. If you are legally obligated to pay child support or spousal support, include those as well (but the lender might not consider these payments if they're due to end soon). DTI and your credit score DTI doesn't affect your credit score, and your credit score doesn't influence your DTI. Your credit score is based on: Your payment historyAmounts owedAccount ageCredit mixHard inquiries (the kind that happen when you apply for credit) That said, both DTI and credit score are measures of financial health, and they often go hand in hand. For example, if your credit card balances are high and you can only afford to make minimum payments, chances are good that your credit score has taken a hit and you have a high DTI. On the flip side, if you have a low DTI, that could mean that you are living below your means and avoiding excessive debt. It would be great if these qualities were rewarded with high credit scores, but they aren't. To have good credit, you need to have and use credit accounts. If you avoid debt, you might not even have a credit score, even with a great DTI. Here are a few examples of DTI calculations. DTI with a personal loan Dan and Lucy earn $8,000 per month between them. Their rent is $2,000. The minimum payments on their credit cards total $300 per month, and they have a $300 monthly car payment. They need $10,000 to cover medical expenses, so they're applying for a personal loan together. The loan will have a $200 monthly payment. Here's how the lender calculates their DTI: Most lenders will approve a loan at a 35% DTI, assuming the applicants meet their other requirements. DTI with a home equity loan Luke earns $78,000 a year ($6,500 per month) and owns his home. His mortgage payment includes $1,100 for principal and interest, plus $140 for property taxes and $60 for homeowner's insurance (total payment: $1,300). He also has a $300 car payment. Luke wants a $100,000 20-year home equity loan for some renovations. He qualifies for an 11.5% APR. The monthly payment will be $1,078. This home equity loan example is for informational purposes only. The payment is calculated using the Actual 360 interest calculation method. Interest rate and payments are for illustration only. Individual results vary. Here's Luke's DTI: Most home equity lenders will consider Luke's DTI to be within the acceptable range to qualify for a new loan. DTI for a debt consolidation loan Chantal earns $5,000 per month, pays $1,500 in rent, and owes $25,000 in credit card debt. Her credit card APRs range from 24.99% to 28.99%. Her total monthly credit card payments are $812. Beforeborrowing, Chantal's DTI is: For many people, a 46% DTI is too high to live comfortably. Spending that much of your income on housing and debt leaves little for taxes, utilities, food, healthcare, household expenses, savings, or fun. But what if Chantal gets a $25,000 personal loan to consolidate her credit card debt? If she qualifies for a 17% interest rate and opts for a five-year term, her payment drops to $621. After she uses a loan to consolidate her credit card debt, Chantal's credit card balances are zeroed out and the $812 in credit card payments goes away. The new loan payment is $621. Chantal's expenses total $2,121 and her DTI drops to 42%. Now she has nearly $200 worth of additional breathing room in her budget every month. This DTI gives her a little more flexibility to cover life's other expenses. Why is DTI important? DTI isn't just important to lenders. It matters even more to you. Your DTI is a snapshot of how doable your lifestyle is at any given time. What is a low DTI? Most lenders consider 36% or lower to be very healthy, and of course, lower is always better. When you apply for a loan, lenders love a low DTI because it shows that there's money in your budget that could cover a new loan payment. That's why having a lower DTI could improve your chances for loan approval. In some situations, a low DTI could help you land a lower interest rate on the loan you want. A low DTI isn't just about loan applications, though. It's about managing your budget. Having a low DTI makes it easier to afford your current financial obligations, with money left over for household expenses, savings, unexpected costs, and some fun. What is a high DTI? Anything over 43% is considered high-ish. It's a limit established by many mainstream lenders. However, people get loans with a DTI over 43%, and even over 50%, every day. It depends on the overall strength of your finances and the type of loan you're after. A high DTI could make it harder to borrow when you need to. Or it could make it harder to borrow the amount you want. Mainly because to the lender, it looks like you might not be able to afford the payment. A higher DTI could also lead to more expensive loans. That's because a higher DTI represents a higher risk to the lender, so they might charge more to compensate for the risk. If you have a high DTI, the lender may ask for other evidence of financial stability before approving your loan. The world won't end if your DTI is on the high side, but it's something to watch, and something you'll probably want to work on. Even if you're not planning to apply for new credit any time soon, a high DTI means most of your money is already spoken for. That leaves you less to save, invest, and spend on the necessities of life. Bringing your DTI down means making more of your money available to spend or save the way you choose to. DTI and home loans Mortgage lenders, including home equity lenders, look closely at your DTI when you borrow. In the past, many lenders set 43% as a cut-off for mortgage approval. However, not every lender or loan program applies this limit today. In fact, some home equity loan lenders will consider your application even if your DTI is as high as 50%. Loan eligibility is typically based on multiple factors, including your credit score and the reason you want the loan. If your DTI is higher than 43%, the best thing to do is talk to a mortgage advisor who can help you learn about your options. DTI and personal loans The way personal loans work is ultimately up to each lender that offers them. Providers vary widely in what DTIs they're willing to accept. The typical maximum is 35% to 43%. DTI is just one part of your application. The lender will evaluate your income, your credit standing, the reason you need a loan, and other factors. Keep in mind that DTI isn't about how much money you make or how much debt you have. The focus is on how your monthly income and expenses relate to one another. For example, let's say Alex applies for a personal loan. Alex makes good money and isn't concerned about getting approved for the loan. Here is Alex's debt and income breakdown: A personal loan lender might decline to offer Alex a loan, because any new payment looks unaffordable. If Alex can afford it, a great way to lower DTI would be to pay down (or pay off) the credit card debt and eliminate that expense. Getting rid of the credit card expense would bring Alex's DTI down to under 38%. Tips for improving DTI and increasing loan eligibility There are several ways to improve your DTI. Generally, they fall into one of these three categories: Lower your monthly debt payment by consolidating or refinancing your debtsPay down your debtIncrease your income Debt consolidation:The way debt consolidation works is that you take one new loan and use it to pay off more than one smaller debt. This could lower your DTI if the consolidation loan has a lower payment than the loans it replaces. You could reduce what you pay each month if you get a loan with a lower interest rate and/or a longer repayment term. Debt consolidation doesn't get rid of any of your debts. It only moves your debt from one place to another. Debt refinancing: Refinancing a loan means replacing it with a new one. People do this when the new loan has a lower interest rate, lower payments, or some other benefit. If your new loan has a lower payment, this reduces your DTI. Increase your income: A great way to reduce DTI is to offset your debt expenses with more income. More income could ease financial stress, too. Consider picking up another job or exploring other ways to generate more income. Pay down debt: This is your long-haul plan. You can improve your DTI without taking on a new loan. Get a budget together and set some goals. To pay off your balances over time, you'll need to be mindful about spending. Once you've got your plan in place, make it stick. Check your balances and DTI every month. Do your best to stay on track and don't forget to celebrate your progress. At the end of the day, DTI is a measure of your financial comfort level. If your DTI is on the high side, consider the goals you could work toward if you had more money at your discretion each month. Setting your sights on specific priorities could help motivate you to work toward a lower DTI. Frequently asked questions What does a DTI do? DTI is a calculation. It's your monthly housing and debt payments divided by your monthly pre-tax income. DTI shows how much of your income you spend on housing and required payments. DTI also shows lenders if you can afford a new payment when you apply for a loan. What DTI ratio is good? A DTI under 36% is considered healthy and low. Most lenders allow DTIs up to 43% for most kinds of loans. Many mortgage loans allow a DTI above 50%, but it's not as common for unsecured loans. Is 50% DTI too high? A DTI above 50% is common, especially in areas where housing is expensive, but it's hard. Spending half of your pretax income on housing and debt service doesn't leave you a lot of wiggle room. The rest of your income has to cover income taxes, food, utilities, transportation, school costs, hobbies, household goods, clothing, and anything else. That said, some people manage at a 50% DTI by being ruthless with their budgets. Consider targeting a lower DTI over time to make your life more comfortable and secure. This story was produced by Achieve and reviewed and distributed by Stacker. © Stacker Media, LLC.
Business Insider
5 days ago
- Business
- Business Insider
Achieve Debt Relief Review 2025
If you find yourself underwater in debt and are struggling to make payments toward your credit card or loan, a debt settlement company like Achieve Debt Relief might be able to help. According to the company, customers who complete the Achieve Debt Settlement program reduce their enrolled debt by 30% to 50% on average. However, the debt settlement process can be risky and is not an easy solution. Business Insider's personal finance team compared Achieve Debt Relief to the best debt settlement companies and found it to be a strong option, with free debt evaluation and a full selection of personal finance options including personal loans. Read on to see if Achieve Debt Relief is right for you. Pros and Cons of Achieve Debt Relief Pros Debt resolution could significantly reduce what you owe Requires a demonstrated hardship to move forward in the program Reduces monthly debt payments Alternative to bankruptcy Cons Debt settlement will not fix all of your debts and will affect credit score You might be responsible for paying taxes on the money you save through debt resolution Get Debt Relief Overview of Achieve Debt Relief Achieve Debt Relief is a debt settlement program. A team of experts work with creditors on your behalf to reduce the amount you owe. This allows you to pay off debts faster than making minimum monthly payments and aims to keep more money in your pocket. Many people turn to debt settlement in an effort to handle matters quickly and when they are feeling overwhelmed, but there are limitations to what debt settlement can do. Debt settlement through any company, including Achieve, will be reported to the credit bureaus, especially if you settle for less than you owe the creditor. Since your creditor took a financial loss on its business relationship with you, the settlement may negatively affect your credit score. Achieve Debt Relief works with unsecured debts. It is available in 31 states and works with legal partners to provide debt relief services in 10 more states (Connecticut, Georgia, New Hampshire, New Jersey, Illinois, Kansas, Maine, Ohio, South Carolina, and Virginia). The smallest debt amount that can be enrolled is $7,500, and Achieve accepts debts up to $100,000. The program takes an average of 24-48 months to complete. Achieve has served over 1.5 million customers and has resolved or consolidated over $20 billion in debt. How Achieve Debt Relief Works Achieve Debt Relief focuses on reducing the amount of debt you owe so you can pay it off quicker instead of making minimum monthly payments. To work with Achieve, you must first demonstrate a hardship. This is an unusual requirement among debt-relief companies and reflects well on Achieve. Qualifying hardships include job loss, unexpected salary reduction, divorce, and medical expenses. Then, you'll go over the debt you would like to enroll with Achieve debt experts and discuss a plan for resolving your debt. That plan will include how much you can afford to pay and what amount you want to settle for. Once onboarded, you will have access to an online dashboard covering your progress in the program 24/7, and member services are available 7 days a week. Achieve will negotiate with your creditors on your behalf and work out an agreed-upon settlement plan. Once you agree to the settlement amount, a payment plan will be implemented. Key Features of Achieve Debt Relief Debt Evaluation Achieve offers a free professional debt evaluation and the assistance of experts who negotiate with creditors on your behalf, often settling your unsecured debt for less than what is owed. Faster debt payoff Through the program, members can pay off debts faster by making one low monthly program deposit, typically less than the minimum monthly payments across all of their debts. Personal finance tools Achieve also offers personal finance options, including Achieve personal loans, home equity loans, and financial literacy and educational tools. Achieve GOOD App Achieve has a mobile app called GOOD, which stands for Get Out of Debt, for users to automate their budgeting and see all of their debt and finances in one place. Achieve Debt Relief Costs and Fees Program fees range from 15% - 25% of enrolled debt. The settlement fees are built into your program deposit so there is nothing extra to pay. There are no membership fees to join Achieve, only the monthly or bi-weekly deposit needed for debt negotiations and settlements. For example, if your total settlement amount after negotiations is $3,600, then you would make a monthly payment to Achieve of $300 every month for 12 months. Achieve will then pay that amount to your creditors to pay off the settlement amount. Achieve Debt Relief Reviews and Ratings Achieve Debt Relief has a customer rating of 4.8 out of 5 stars on Trustpilot with over 11,000 reviews and an A+ rating with the Better Business Bureau. Common complaints include that creditor payments and consolidation loan payoffs were slow. Achieve Debt Relief is a member of The American Association of Debt Resolution (AADR). All members are accredited through a bi-annual audit for compliance with federal and state regulations as well as AADR industry standards. Achieve Debt Relief is also a member of the Financial Health Network, an organization dedicated to developing solutions to improve financial health. Achieve Debt Relief Alternatives Achieve Debt Relief vs. National Debt Relief National Debt Relief does not charge upfront fees; like Achieve, its service fees range from 15%-25% of the debt enrolled. It does not charge any fees until you start to see results. Also, like Achieve, there is an eligibility threshold of $7,500 of debt enrolled to work with National Debt Relief, and the debt settlement process can be lengthy. One advantage of Achieve is that it also offers personal loans, which can help borrowers with bad or fair credit qualify and make the service a one-stop stop. National Debt Relief offers services in 46 states and Washington, DC, while Achieve Debt Relief offers services in 31 states and works with legal partners to offer services in 10 other states where debt relief through a debt relief company is not allowed (Connecticut, Georgia, New Hampshire, New Jersey, Illinois, Kansas, Maine, Ohio, South Carolina, and Virginia). If you live in one of those 10 states, your debt resolution will be handled by Achieve's legal partners, which is something to consider, but the additional features like personal loans could still make Achieve a stronger choice. National Debt Relief review Achieve Debt Relief vs. Pacific Debt Relief Pacific Debt Relief does not charge upfront fees, and, like Achieve, service fees range from 15% to 25% based on the amount of your debt. Fees are rolled into your monthly payment and are due only when you start to see results. Also like Achieve, the average time of completion is 24-48 months. Unlike Achieve, Pacific Debt Relief requires at least $10,000 in debt to enroll in its program. If you have debt between $7,500 and $9,999, you'll choose Achieve. We rate debt settlement services like Achieve Debt Relief by taking into account the following criteria: Accreditation by trade associations or organizations Fee structures and disclosure Number of years in operation Money-back guarantees in cancellation policies Read the full breakdown of how we rate debt settlement companies. FAQs
Yahoo
13-05-2025
- Business
- Yahoo
Consumer confidence falters as financial expectations fall flat, Achieve survey finds
Economic optimism fades as households continue to struggle under mounting debt and tight budgets. SAN MATEO, Calif., May 13, 2025 /PRNewswire/ -- A new survey by digital personal finance company Achieve reveals a gap between consumers' financial expectations and their economic reality. While 57% of respondents believed their finances were poised for improvement over the past year, only 32% of American households actually realized those expected gains. This reversal of fortunes underscores the fragility of household budgets as broad cost pressures from inflation, high interest rates and now, tariffs, push more consumers into relying on debt to make ends meet. Achieve's April 2025 survey found 33% of consumers said their financial situation deteriorated over the past year — a stark contrast from the 10% who predicted a decline in Achieve's inaugural survey in spring 2024. "Households enter 2025 more pessimistic and with fewer financial gains in hand than most were expecting," said Achieve Co‑Founder and Co‑CEO Brad Stroh. "The optimism gap is a warning sign that highlights the need for tools and strategies that address the financial strain facing households. The reality of high debt loads, high interest costs and persistent inflation cast a sustained shadow on the financial optimism for many Americans." Economic optimism erodesWorsened/Will get worse Stayed the same/Will stay the same Improved/Will improve How do you think your financial situation will change from April 2024 to April 2025? (2Q24 Survey) 10 % 33 % 57 % How did your financial situation change from April 2024 to April 2025? (2Q25 Survey) 33 % 35 % 32 % Source: Achieve Center for Consumer Insights The survey, conducted by Achieve's think tank, the Achieve Center for Consumer Insights, complements the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit by providing qualitative insights into consumer borrowing and debt. The latest edition of Achieve's study highlights some of the risks that persistent reliance on debt poses for many consumers: 25% of respondents accrued more debt over the past three months, nearly level from Achieve's first quarter 2025 study. Meanwhile, 40% said their total debt remained flat and 35% decreased their debt (approximately level from last quarter). 58% of those surveyed use credit card debt to cover essential expenses. Two out of every five of these respondents have had this debt for more than six months. 37% say it's difficult to pay their debts on time, up slightly from 36% last quarter. 59% report paying all of their bills on time, down from 65% during 1Q25 and 61% in 2Q24, the inaugural edition of Achieve's study. Missed Payment Risk Rises Consumers are increasingly at risk of being late or missing debt and monthly bill payments, Achieve's survey found. Consumers reported a higher risk of missing a payment in the next three months on nearly all of the monthly obligations covered in the survey. In 2Q25, missed payment risk on student loans increased to 35% (up from 32% last quarter), while even secured debts like auto loans (14%) and mortgages (10%) are at greater risk of a late or missed payment, the survey found. Consumers who expect to miss or be late on a loan or bill payment in the next three months Debt Type 2Q24 3Q24 4Q24 1Q25 2Q25 Student loan 29 % 28 % 38 % 32 % 35 % Personal loan 18 % 15 % 18 % 20 % 17 % Auto loan 10 % 12 % 11 % 7 % 14 % Utilities 11 % 12 % 12 % 11 % 13 % Cable/internet 9 % 10 % 11 % 10 % 13 % Credit card 11 % 13 % 12 % 13 % 13 % Buy now, pay later 13 % 19 % 13 % 17 % 13 % Mortgage/rent 8 % 9 % 9 % 7 % 10 % Mobile phone 7 % 9 % 10 % 8 % 10 % Car insurance 7 % 7 % 7 % 7 % 9 % Homeowners/renters insurance 8 % 8 % 7 % 5 % 8 % Q: What will you do to stay current with your bills over the next three months? Sample ranges from 1,460-2,000 and varies by quarter and number of respondents within each category of bill payment. Source: Achieve Center for Consumer Insights "When people are squeezed by debt levels and ongoing bills, their stress level rises," Stroh said. "Our data shows that even small income disruptions or timing mismatches can lead to late payments and these challenges are magnified by higher borrowing costs that make it more costly to carry debt balances." Drivers of Rising Debt Among respondents whose debt increased over the past three months, one in three (33%) pointed to difficulty making ends meet without borrowing, 28% cited employment and income challenges and 21% acknowledged falling victim to general overspending. Healthcare costs and other medical issues remain a key challenge, with 16% of respondents attributing their debt to these expenses. The leading causes of rising debt2Q24 2Q25 Difficulty making ends meet without additional debt 36 % 33 % Job loss or reduced income 27 % 28 % General overspending or living beyond your means 16 % 21 % Major health change 10 % 16 % Car accident, breakdown or major repair 12 % 12 % Expenses related to raising children 12 % 12 % Major home repair 11 % 12 % Major appliance replacement or repair 11 % 11 % Victim of a crime 4 % 9 % Change in housing situation 8 % 9 % Emergency pet expense 8 % 8 % Legal issues 3 % 8 % Became the primary caregiver of an adult 4 % 6 % Helped family or friend with large sum of money 5 % 6 % Death of a family member 3 % 6 % Divorce, separation or relationship break-up 2 % 4 % Gambling debt 2 % 3 % Going through bankruptcy, credit counseling or debt relief 3 % 2 % Natural disaster 4 % 1 % Other 18 % 10 % Q: Why has your debt increased over the past three months? Select all that apply. n=490 (2Q25) and 396 (2Q24) Source: Achieve Center for Consumer Insights Methodology The data and findings presented are based on an Achieve survey conducted in January 2025 consisting of 2,000 U.S. consumers ages 18 and older with an active account for one or more of the following categories of consumer debt: auto loan; major credit card with a minimum outstanding balance of $100; first-lien mortgage; home equity line of credit (HELOC); student loan; and other (unsecured personal loan, store-branded credit card, buy now, pay later loan, or closed-end home equity loan). The sample was augmented to include a statistically significant subset of credit card, auto loan and student loan borrowers who have been 30 days or more past due at least once in the past six months. About the Achieve Center for Consumer Insights The Achieve Center for Consumer Insights is a think tank that leverages Achieve's team of digital personal finance experts to provide a view into the state of consumer finances. In addition to sharing insights gleaned from Achieve's proprietary data and analytics, the Achieve Center for Consumer Insights publishes in-depth research, bespoke data and thoughtful commentary in support of Achieve's mission of helping everyday people get on the path to a better financial future. About Achieve Achieve, THE digital personal finance company, helps everyday people get on, and stay on, the path to a better financial future. Achieve pairs proprietary data and analytics with personalized support to offer personal loans, home equity loans, debt resolution and debt consolidation, along with financial tips and education and free mobile apps: Achieve MoLO® (Money Left Over) and Achieve GOOD™ (Get Out Of Debt). Achieve has 2,300 dedicated teammates across the country, with hubs in Arizona, California, Florida and Texas. Achieve is frequently recognized as a Best Place to Work. Achieve refers to the global organization and may denote one or more affiliates of Achieve Company, including Equal Housing Opportunity (NMLS ID #138464); Achieve Home Loans, Equal Housing Opportunity (NMLS ID #1810501); Achieve Personal Loans (NMLS ID #227977); Achieve Resolution (NMLS ID # 1248929); and Freedom Financial Asset Management (CRD #170229). Personal loans are originated by Cross River Bank, a New Jersey State Chartered Commercial Bank, Equal Housing Lender. View original content: SOURCE Achieve
Yahoo
13-05-2025
- Business
- Yahoo
Consumer confidence falters as financial expectations fall flat, Achieve survey finds
Economic optimism fades as households continue to struggle under mounting debt and tight budgets. SAN MATEO, Calif., May 13, 2025 /PRNewswire/ -- A new survey by digital personal finance company Achieve reveals a gap between consumers' financial expectations and their economic reality. While 57% of respondents believed their finances were poised for improvement over the past year, only 32% of American households actually realized those expected gains. This reversal of fortunes underscores the fragility of household budgets as broad cost pressures from inflation, high interest rates and now, tariffs, push more consumers into relying on debt to make ends meet. Achieve's April 2025 survey found 33% of consumers said their financial situation deteriorated over the past year — a stark contrast from the 10% who predicted a decline in Achieve's inaugural survey in spring 2024. "Households enter 2025 more pessimistic and with fewer financial gains in hand than most were expecting," said Achieve Co‑Founder and Co‑CEO Brad Stroh. "The optimism gap is a warning sign that highlights the need for tools and strategies that address the financial strain facing households. The reality of high debt loads, high interest costs and persistent inflation cast a sustained shadow on the financial optimism for many Americans." Economic optimism erodesWorsened/Will get worse Stayed the same/Will stay the same Improved/Will improve How do you think your financial situation will change from April 2024 to April 2025? (2Q24 Survey) 10 % 33 % 57 % How did your financial situation change from April 2024 to April 2025? (2Q25 Survey) 33 % 35 % 32 % Source: Achieve Center for Consumer Insights The survey, conducted by Achieve's think tank, the Achieve Center for Consumer Insights, complements the Federal Reserve Bank of New York's Quarterly Report on Household Debt and Credit by providing qualitative insights into consumer borrowing and debt. The latest edition of Achieve's study highlights some of the risks that persistent reliance on debt poses for many consumers: 25% of respondents accrued more debt over the past three months, nearly level from Achieve's first quarter 2025 study. Meanwhile, 40% said their total debt remained flat and 35% decreased their debt (approximately level from last quarter). 58% of those surveyed use credit card debt to cover essential expenses. Two out of every five of these respondents have had this debt for more than six months. 37% say it's difficult to pay their debts on time, up slightly from 36% last quarter. 59% report paying all of their bills on time, down from 65% during 1Q25 and 61% in 2Q24, the inaugural edition of Achieve's study. Missed Payment Risk Rises Consumers are increasingly at risk of being late or missing debt and monthly bill payments, Achieve's survey found. Consumers reported a higher risk of missing a payment in the next three months on nearly all of the monthly obligations covered in the survey. In 2Q25, missed payment risk on student loans increased to 35% (up from 32% last quarter), while even secured debts like auto loans (14%) and mortgages (10%) are at greater risk of a late or missed payment, the survey found. Consumers who expect to miss or be late on a loan or bill payment in the next three months Debt Type 2Q24 3Q24 4Q24 1Q25 2Q25 Student loan 29 % 28 % 38 % 32 % 35 % Personal loan 18 % 15 % 18 % 20 % 17 % Auto loan 10 % 12 % 11 % 7 % 14 % Utilities 11 % 12 % 12 % 11 % 13 % Cable/internet 9 % 10 % 11 % 10 % 13 % Credit card 11 % 13 % 12 % 13 % 13 % Buy now, pay later 13 % 19 % 13 % 17 % 13 % Mortgage/rent 8 % 9 % 9 % 7 % 10 % Mobile phone 7 % 9 % 10 % 8 % 10 % Car insurance 7 % 7 % 7 % 7 % 9 % Homeowners/renters insurance 8 % 8 % 7 % 5 % 8 % Q: What will you do to stay current with your bills over the next three months? Sample ranges from 1,460-2,000 and varies by quarter and number of respondents within each category of bill payment. Source: Achieve Center for Consumer Insights "When people are squeezed by debt levels and ongoing bills, their stress level rises," Stroh said. "Our data shows that even small income disruptions or timing mismatches can lead to late payments and these challenges are magnified by higher borrowing costs that make it more costly to carry debt balances." Drivers of Rising Debt Among respondents whose debt increased over the past three months, one in three (33%) pointed to difficulty making ends meet without borrowing, 28% cited employment and income challenges and 21% acknowledged falling victim to general overspending. Healthcare costs and other medical issues remain a key challenge, with 16% of respondents attributing their debt to these expenses. The leading causes of rising debt2Q24 2Q25 Difficulty making ends meet without additional debt 36 % 33 % Job loss or reduced income 27 % 28 % General overspending or living beyond your means 16 % 21 % Major health change 10 % 16 % Car accident, breakdown or major repair 12 % 12 % Expenses related to raising children 12 % 12 % Major home repair 11 % 12 % Major appliance replacement or repair 11 % 11 % Victim of a crime 4 % 9 % Change in housing situation 8 % 9 % Emergency pet expense 8 % 8 % Legal issues 3 % 8 % Became the primary caregiver of an adult 4 % 6 % Helped family or friend with large sum of money 5 % 6 % Death of a family member 3 % 6 % Divorce, separation or relationship break-up 2 % 4 % Gambling debt 2 % 3 % Going through bankruptcy, credit counseling or debt relief 3 % 2 % Natural disaster 4 % 1 % Other 18 % 10 % Q: Why has your debt increased over the past three months? Select all that apply. n=490 (2Q25) and 396 (2Q24) Source: Achieve Center for Consumer Insights Methodology The data and findings presented are based on an Achieve survey conducted in January 2025 consisting of 2,000 U.S. consumers ages 18 and older with an active account for one or more of the following categories of consumer debt: auto loan; major credit card with a minimum outstanding balance of $100; first-lien mortgage; home equity line of credit (HELOC); student loan; and other (unsecured personal loan, store-branded credit card, buy now, pay later loan, or closed-end home equity loan). The sample was augmented to include a statistically significant subset of credit card, auto loan and student loan borrowers who have been 30 days or more past due at least once in the past six months. About the Achieve Center for Consumer Insights The Achieve Center for Consumer Insights is a think tank that leverages Achieve's team of digital personal finance experts to provide a view into the state of consumer finances. In addition to sharing insights gleaned from Achieve's proprietary data and analytics, the Achieve Center for Consumer Insights publishes in-depth research, bespoke data and thoughtful commentary in support of Achieve's mission of helping everyday people get on the path to a better financial future. About Achieve Achieve, THE digital personal finance company, helps everyday people get on, and stay on, the path to a better financial future. Achieve pairs proprietary data and analytics with personalized support to offer personal loans, home equity loans, debt resolution and debt consolidation, along with financial tips and education and free mobile apps: Achieve MoLO® (Money Left Over) and Achieve GOOD™ (Get Out Of Debt). Achieve has 2,300 dedicated teammates across the country, with hubs in Arizona, California, Florida and Texas. Achieve is frequently recognized as a Best Place to Work. Achieve refers to the global organization and may denote one or more affiliates of Achieve Company, including Equal Housing Opportunity (NMLS ID #138464); Achieve Home Loans, Equal Housing Opportunity (NMLS ID #1810501); Achieve Personal Loans (NMLS ID #227977); Achieve Resolution (NMLS ID # 1248929); and Freedom Financial Asset Management (CRD #170229). Personal loans are originated by Cross River Bank, a New Jersey State Chartered Commercial Bank, Equal Housing Lender. ContactsAustin KilgoreDirectorCorporate Communicationsakilgore@ TarkazikisManagerCorporate Communicationsetarkazikis@ View original content to download multimedia: SOURCE Achieve Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
