money Almost 30% of Americans, mostly millennials, will use coronavirus stimulus checks for housing costs: survey
More than one-in-four Americans who expect a stimulus check plan to spend it on housing, according to a new survey.
Some 28.4% said they would use the stimulus check to pay for rent or a mortgage, according to a survey of 1,013 Americans by Crediful, a personal finance website based in Scottsdale, Arizona.
“Rent and mortgage payments are a big cost, and it’s one that a person would be looking to maintain. We have seen proposals for rent strikes and calls for delayed mortgages and rent payments from different cities and states, so we knew this would be a pressing issue,” said Joey Morris, a project manager for Crediful.
Millennials were the most likely to plan to use stimulus checks to cover housing costs, at 31.3%. Only 26.3% of Generation X respondents and 22.8% of Baby Boomers planned to use the money on rent or mortgage payments, according to the study.
“Millennials may have less savings and less of a safety net compared to older generations, who have had more time to accumulate more wealth,” said Joe Mercurio, another project manager for Crediful.
The federal government has issued $1,200 stimulus checks as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will be sent to most Americans who make under $75,000. Direct deposit payments began the weekend of April 11, but it could take months for checks to arrive; the Internal Revenue Service plans to release a tracking tool later this week.
Unemployment jobless claims hit a new high, for the week ending April 4, reaching 6.6 million. The economic uncertainty during the pandemic led Google searches for “mortgage relief” and “mortgage refinance” to spike in March to an all-time high. Meanwhile, a third of American renters were unable to pay rent at the beginning of April (updated payment numbers will be released Wednesday).
Certain homeowners are eligible to defer mortgage payments under the CARES Act, but banks have not been able to keep up with demand for mortgage forbearance.
Groceries, utilities and savings more crucial
The Crediful survey also identified other ways Americans will spend their stimulus checks: almost half will buy groceries and pay bills like utilities, while 42% will put the check into savings. Surprisingly, a substantial 26.8% of respondents planned to use the money to pay credit card debt.
“One of the most surprising results was that credit card debt ranked as highly as it did… It could be seen as encouraging that people are considering credit card debt and looking to tackle it, even with finances being volatile right now,” said Morris.
Meanwhile, only 9.4% of respondents planned to use the check for student loan debt — which is surprising because the country faced a student loan crisis prior to the pandemic. But since the CARES Act provides student loan relief, it may be a less pressing concern during the pandemic, said Mercurio.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
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More from Sarah:Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube, and reddit.
More from Sarah:
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