In Brief : Summer 2019
In Print
In Brief : Summer 2019
December 6, 2019 1:34 PM
by
Vincent Valvo

 

AS RECESSION FEARS LOOM, MIDDLE-CLASS ANXIETY ABOUT THE AMERICAN DREAM GROWS

Middle-class Americans are less optimistic about their ability to achieve upward mobility than they were six months ago, according to new data from CUNA Mutual Group, a provider of lending, insurance, investment,and financial technology solutions for credit unions.

When CUNA Mutual Group first polled the middle class in fall 2018, survey respondents gave themselves a “B minus” grade when asked to evaluate their prospects for achieving the “American Dream.” Amid increasingly uncertain economic conditions, however, that grade has dropped to a “C.”

A potential driver of this anxiety is fear the other shoe will drop after several years of strong economic growth, with close to 50 percent of respondents expressing worry the U.S. will enter a recession in the next year.

However, when thinking about their personal economic position, the majority of respondents feel relatively stable, with 61 percent saying they are somewhat to very confident, and 88 percent saying they feel their job is somewhat or very secure over the next year. That said, the middle class could be doing better – of the respondents who say they are confident in their personal economic position, two-thirds are only “somewhat” confident,meaning they can comfortably pay their bills, but want to save more in the long run.

“The middle class is mired in uncertainty. We’re seeing stagnating job growth, limited wage growth and increasing market volatility attributable to headwinds from tariffs and unfinished trade negotiations,” said Steve Rick, chief economist, CUNA Mutual Group. “This should be a wake-up call to families to start shoring up their finances now, whether that takes the form of cutting spending, reassessing their savings to avoid having to cut into their retirement to stay afloat, or even refinancing a mortgage if that’ll put them in a better position. If there’s one thing 2008 taught us, it’s that you can’t afford to be caught on your heels if a recession hits.”

On the positive side, survey respondents are aware of their economic vulnerabilities. In the event of a recession, they say they would decrease discretionary spending (53 percent) and make lifestyle changes (52 percent).

ARE WOMEN MORE SENSITIVE TO A POTENTIAL DOWNTURN?

Overall, female respondents appear to be more pessimistic when it comes to the current economy. Specifically:

• Women are less bullish about their personal economic situation.

• Only 54 percent say they feel somewhat or very confident about their economic position, versus 68 percent of men

• Eighteen percent say they don’t feel very confident about their economic position, compared to 11 percent of men

• Women are significantly less likely to feel their employment is secure, with 43 percent saying their job feels very stable,versus 51 percent of men

• Female respondents are more wary of a recession, with 51 percent saying they are somewhat or very concerned, compared to 48 percent of men.

MORE DEPENDENTS, MORE PROBLEMS

Women aren’t the only respondents with a heightened sense of uncertainty, with the survey finding more anxiety among parents than their child-free counterparts. People with children are more concerned the U.S. will enter a recession in the coming year compared to those without children (54 percent versus 47 percent).

Parents are also willing to be more aggressive about steps they would take to maintain stability in a recession. Most notably, they are almost twice as likely as those without children to reduce their retirement savings contributions. These findings are from a CUNA Mutual Group survey assessing 1,288 U.S. adults ages 18 or older and making an annual income of$35,000 to less than $100,000. The survey was fielded in May 2019.

FREEDOM MORTGAGE’S STANLEY AND MICHAEL MIDDLEMAN RECEIVE HONORS

Stanley C. Middleman, CEO of Freedom Mortgage Corporation,one of the nation’s largest full-service non-bank mortgage companies and a leader in VA and government-insured lending, has been named the winner of Ernst& Young (EY)’s Entrepreneur of The Year® Greater Philadelphia Award in the financial services category.

Middleman was among several finalists selected by a panel of independent judges for the award, which celebrates entrepreneurs who are building and leading successful, growing and dynamic businesses. Award winners were announced at a special gala event on June 19, 2019 at the Kimmel Center for the Performing Arts in Philadelphia.

Middleman founded Freedom Mortgage in 1990. As other lenders failed to survive the Great Recession and 2009 foreclosure crisis, Middle man grew his company to become a market leader in VA mortgages and government-insured lending, with a staff of more than 4,000 employees nationwide and customers in all 50 states. Over the past three decades, Freedom Mortgage has helped more than 1 million home buyers, including countless veterans and military service men and women, obtain affordable mortgages and achieve the American dream of home ownership.

“I’m truly humbled to receive this award, considering how many excellent entrepreneurs and companies there are in the Philadelphia area,”said Middleman. “It’s an amazing honor, surpassed only by the satisfaction that my team at Freedom and I experience by helping people buy the homes of their dreams.”

Meanwhile, company executive vice president Michael Middleman has been recognized by The Philadelphia Inquirer for his philanthropic contributions to the United Service Organizations (USO) in support of military families.

Middleman, who is the founder of Freedom Mortgage’s First Flyer recruitment and training program, received The Inquirer’s Leadership Award at the newspaper’s Corporate Philanthropy Conference & Awards ceremony. The Leadership Award recognizes executives who are “champions of charity in the workplace” by empowering employees to support charitable activities.

The Freedom Mortgage’s First Flyer college recruitment and training program develops new leaders among the mortgage lender’s expanding workforce. Over the past 18 months, First Flyers have raised more than $61,000 for military organizations through multiple charity events, including a 5K run/walk, Skating for Service and a Veterans Jeans Day fundraiser. First Flyers have also collected over 1,500 brand new backpacks for schoolchildren that contained donated school supplies, including pencils, pens, notebooks, folders, glue,crayons, toys and more.

LOANDEPOT SURVEY: HOME BUILDERS OFFERING FINANCING DELIVER HIGHER LEVELS OF CUSTOMER SATISFACTION

76% of customers who financed through a home builder cite ease of use, competitive rates and time savings as top reasons

A recent national survey conducted by loanDepot revealed that 76% of respondents who financed through a home builder were satisfied with their financing experience, citing ease of use, competitive rates and incentives as their top reasons for satisfaction. However, less than half of those surveyed (39%) indicated that they were offered financing, demonstrating a significant opportunity for more home builders to improve their home buyers’ experience by having a dedicated on-site lender.

The survey, which was conducted on a random sample of 1,000 customers who had purchased homes in the past 18 months, also revealed that the top sources of awareness for home builders are referrals from family and friends (30%), or an introduction from a realtor (28%), indicating that past positive customer experiences offer exceptional opportunities for home builders and mortgage providers to establish a pipeline of future customers. In fact,according to Nielsen 1, 92% of consumers believe recommendations from friends and family over all forms of advertising. What this demonstrates is that these positive purchase experiences can translate into valuable relationships with new customers well into the future.

“Home builders who leverage the services of experienced, new home lenders—and especially those that focus on exceptional borrower experiences—will definitely have the advantage in competitive markets,”explains Dan Peña, Senior Vice President of National Joint Ventures for loanDepot.

The survey revealed that respondents found the new home construction experience to be pleasant (40%), easy (33%) and convenient (28%).Top negative associations with the experience were that it was time consuming(35%) and stressful (28%).

Another revealing survey finding was that more prospective homebuyers are thinking financing first, another reason for home builders to consider the lender impact earlier in the sales process. According to the survey, over two-thirds of respondents were pre-qualified or pre-approved with a lender prior to beginning their home search.

MORE THAN A THIRD OF AMERICANS CRY WHILE SELLING THEIR HOME

More Americans are stressed out by selling a home than planning a wedding or getting fired, according to a new Zillow survey

Selling a home is one of the most stressful experiences in modern life, second only to a relationship break-up. More than three quarters of Americans who have sold a home in the past three years say it was a stressful experience, and it could easily become more stressful as the market slows and turns in favor of buyers.

According to a new Zillow survey, 36 percent of home sellers say the process left them in tears, with millennials and parents far more likely to cry at some point during the sale. Of those who cried, 20 percent shed tears five times or more.

It’s no wonder. In a world of hyper-connection and on-demand everything, selling a home traditionally is one of the few things that has not gotten easier over time.

“If you’ve ever sold a home before, you know how daunting the process can be,” said Zillow Brand President Jeremy Wacksman. “Anticipating that stress can be a huge obstacle that keeps homeowners from moving on to the next stage of their lives. Our survey found more Americans were stressed overselling their home than planning a wedding, getting fired or becoming apparent.”

Selling a home can be challenging for many reasons. Among those surveyed, 70 percent were stressed by uncertainty over the sale price, 69 percent were stressed their home wouldn’t sell in their desired time frame, 65 percent were stressed an offer would fall through and 65 percent were stressed about fixing up their home for sale. According to Zillow’s latest research, 61 percent of sellers are buying a new home at the same time, which adds significant pressure and financial complexity to the process. Zillow’s survey shows that nearly 7 out of 10 people mistimed the process, with more than one-third saying the sale of their home took longer than expected.

 

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