New statistics released by Money Management International (MMI), a nonprofit financial counseling provider, show a 90% increase in the number of clients seeking mortgage help for delinquency counseling in 2023 compared to the same period in the previous year. This surge is particularly pronounced among clients in their 30s.
And it’s not just mortgage debt people are struggling with. MMI found that housing default counseling clients in 2023 are burdened with an average unsecured debt that is 12% higher than clients in 2022. This rises to a concerning 24% increase for clients in their 30s. Furthermore, clients in 2023 are grappling with average non-mortgage secured debt 10% higher than in 2022.
"The 30s are a pivotal financial decade for most individuals, often marked by the responsibilities of parenthood, including expenses such as daycare, tutoring, sports, and clubs, which have all surged in cost since the pandemic," said Kate Bulger, MMI vice president.
"This is also the decade when many of us make our first home purchase. However, between January 2019 and December 2022, the median home price rose by almost 52%. The disproportionate increase in home prices compared to income levels places added pressure on the budgets of those in their 30s, especially when unexpected setbacks occur. Additionally, this demographic carries the highest student loan debt burden, with an average balance of around $42,000, further straining their finances as student loan payments resume,” added Bulger.
Notably, these mortgage-help trends contribute to significantly higher levels of financial stress overall. Since 2020, the percentage of individuals reporting high or very high levels of financial stress has risen by 18%.
As the economy adjusts to post-pandemic realities, the support programs that once buoyed homeowners, such as COVID forbearances and the Homeowners’ Assistance Fund, have mostly drawn to an end. Consequently, consumers facing mortgage payment challenges today have fewer lifelines compared to previous years.
The impact of rising interest rates is further exacerbating the situation. Previously manageable levels of unsecured debt have suddenly become unmanageable for many consumers, affecting their overall financial budgets, including their ability to meet mortgage obligations.
