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68 68 68 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal FANNIE MAE STUDY FINDS CONSUMERS REMAIN WORRIED ABOUT HOUSING COSTS With wage growth failing to keep up with the pace of inflation over the past year, many households feel increasingly burdened paying for necessities such as gas, food, medical bills, and housing payments, according to a study from Fannie Mae. To maintain spending, many have turned to drawing down previously built-up savings from the COVID-19 period and related stimulus programs, while also increasingly taking on more consumer debt. While inflation appears to be cooling, consumer spending still significantly exceeds its historical trend relative to disposable income, resulting in a near record-low personal savings rate this past fall of 2.4% (compared to a more typical 7-9%). Meanwhile, outstanding revolving consumer credit (mostly card debt) is growing briskly, rising 17% on an annual basis in November, the fastest pace since 1996, according to the Federal Reserve. And now, consumer debt delinquency rates have begun to rise. e unsustainable growth in con- sumer debt to maintain household expenditures may soon be coming to an end, and it's likely to have implications for the general economy and the housing and mortgage markets. Over the course of 2022, from April to Sep- tember, Fannie Mae's National Housing Survey examined some of the challenges that consumers are facing amid high levels of inflation, including the ability to save money, concerns over being able to pay for necessities, and the topic of household debt. is helped paint a picture of the state of households' finances entering this year. Many consumers cite problems affording household necessities • Amid rising prices, surveyed consumers' top areas of concern were gas, food, and medical care. More than one-third of consumers expect their ability to pay for food (35%), medical care (34%), and gas (33%) to be impacted in the next 12 months (as of September). Across all of these categories, respondents polled in September expressed more concern than those surveyed in April. • Among those surveyed in September, 26% of consumers expressed concern about making future mortgage/rent payments, up from 18% in April. is concern was far higher among renters (39%) than mortgage holders (22%), but both groups increased significantly from April to Sep- tember (renters up 8%, mortgage holders up 7%). • More than a quarter (28%) of the general population reported not being able to save any money as of September (up from 23% in April), indicating a growing group at risk of depleting their savings should any shocks to income occur in a potential recession. Renters were more likely to report not being able to save (35%) than mortgage holders (28%), but mortgage holders grew far more significantly over time (from just 18% unable to save in April, compared to 32% of renters in April). Household Debt Grows, Increasing Levels of Consumer Stress • Consumer stress over their ability to make debt payments in Q3 2022 (35% very/ somewhat stressed) was higher than we have seen historically—primarily driven

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