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Individuals' optimism regarding future financial prospects increased substantially from 2013 to 2014, while perceptions of current financial well-being improved only modestly, according to a survey conducted by the Federal Reserve released Wednesday. The Fed's 2014 Survey of Household Economics and Decisionmaking, which was completed by about 5,800 individuals last fall, found that 65 percent of adult respondents said they were either "doing okay" or "living comfortably" as far as their personal finance situation, which represented an increase of 3 percentage points from the survey the previous year.
Meanwhile, the percentage of respondents who said they expect their income to be higher in the next year jumped from 21 percent in 2013 to 29 percent in the 2014 survey. Despite the reasons for optimism, however, the Fed said the survey's findings "highlight that economic challenges remain for a significant portion of the population." The survey indicated that many Americans are not prepared for economic emergencies or for the future. Just more than half of survey respondents, 53 percent, said they would be able to cover an emergency expense costing $400 without borrowing money or selling something.
The Multi-Indicator Market Index released monthly by Freddie Mac revealed Wednesday that the housing market is continuing to stabilize, with the most improving metro markets seeing stronger demand for home sales for the spring homebuying season in March 2015. Low mortgage rates are keeping payments affordable according to consumers’ incomes for the typical family in the market, in spite of strong house price appreciation. In March, 36 of the 50 states and 77 of the 100 metros were showing an improving three-month trend.
