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Inflation forces 38% of American Adults To Delay Major Purchases
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Many American adults are delaying major milestones such as buying a house or buying a car due to inflation. 51% of respondents delayed major purchases by one year, while 38% plan to delay due to higher prices from inflation (41-year high). 20% of American adults are delaying car purchases. Over 10% are reconsidering house purchase. The Balance online survey interviewed 1,200 Americans for 10 days in June-July 2022, in a self-filled questionnaire to a panel of respondents from a market research third party. Adult participants managed their own finances, with quotas to ensure equitable national representation as per 2019 US Census estimates as benchmark. Quotas also matched national political affiliation with Pew Research’s 2022 American Trends Panel as benchmark.
Americans Reconsidering Changing Careers
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Source: Pexels
10% of those surveyed planned to delay career changes due to inflation. Of those changing careers within 12 months, 72% planned to delay or even reconsidering job switches. Job openings in June fell to its lowest level since September 2021, meaning inflation, recession and rising interest rates, and fears affect hiring, though the labor market is strong overall with 10.7 million job openings.
Degrees, Weddings, and Babies Also on Pause
Some are reconsidering life milestones due to higher prices, like going to college or grad school, getting married or having children. Six % are planning to delay college / grad school, five % are reconsidering having children, and four % are delaying weddings. With inflation hitting budgets for essentials like groceries and gas, reprioritizing major financial commitments, makes sense. With recession looming, stick to a budget without major expenses. Continue to save and invest to meet financial goals for the future, despite the economy.
Buying a Car Takes a Backseat
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Source: Pexels
Buying a car was the major item delayed due to recent price increases. Among those buying a car over the next year, 76% plan to delay indefinitely. New cars are not affordable due to supply shortages, with average new cars costing $48,043 in June and monthly new car payments were $730. Used cars were affordable as prices stabilized with increasing inventory as average consumers paid $28,012, down $300 from May’s average. Gas prices deter people from buying a car, with the majority noticing inflation at the gas pump. Many avoid their work commute, choosing to work from home, with 22 % saying remote work is preferred as 59 % work from home due to high gas prices.
Americans Put Buying a Home on Hold as Prices Rise
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Source: Pexels
The next common purchase delayed, is buying a house, with 11% delaying to 2023, due to inflation. Those buying a home in 2023, 78% are delaying or even reconsidering. A home purchase is less affordable as mortgage rates rose sharply over the past six months while the average sales price of a home was $416,000 in June, pushing many homebuyers from the market. As the Federal Reserve fights against inflation by hiking interest rates, borrowing is expensive as the interest rates of most loans, including car loans and mortgages, increased. Home prices might slow the upward trend in 2023, as per experts as home prices will increase by 4.3% from June 2022 to June 2023, in contrast to the 18.3% increase from June 2021 to June 2022.
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