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Happier Americans, More Reliable Mortgage Payments

Americans are paying their mortgages on time more often than they have in nearly two decades, according to the American Institute of CPAs’ (AICPA) Q1 2019 Personal Financial Satisfaction Index (PFSi).

The PFSi states that loan delinquencies dropped 5.5% (1.8 points) from the previous quarter, with the improvement mostly driven by mortgages. While the amount of delinquencies dropped to its lowest level since 2007, the rate is still higher than what was seen between 1994–2003.

The PFSi is calculated as the Personal Financial Pleasure Index (Pleasure Index) minus the Personal Financial Pain Index (Pain Index). Positive readings signal Americans are feeling more financial pleasure than pain.

“No one wants to pay any more taxes than they owe. Now is the perfect time to use the information in your tax return and underlying documents to build a tax-efficient financial plan,” said Michael Landsberg, CPA/PFS member of the AICPA’s Personal Financial Planning Executive Committee. “This was the first year with most provisions of the new tax law on the books. As many have discovered, the changes went far beyond a reduction to income tax brackets. If you haven’t already considered the new tax law changes, now is the opportune time to review and update your financial plan.”

Taxes and money are an important component of the Pain Index, especially when measuring financial satisfaction. The report states then when income taxes change, Americans notice because it impacts the amount of money they take home. Americans also hope for a lower tax burden, which, for some, can be reflected in a higher refund.

Americans received an average tax refund of $2,899 in 2017. In 2018—the first under the new law—the average tax fell to $2,795, according to the IRS.

The Q1 2019 PFSi measured 36.1, an 11.3 percent (3.7 points) increase from the prior quarter. The increase was due to a 2.4-point increase in the Pleasure Index combined with a 1.3-point decrease in the Pain Index.

Stocks surged in the first quarter of 2019 after a sharp decline in the fourth quarter of 2018. Gains in the stock market, combined with an improved job market, pushed American’s personal financial satisfaction to a new record high, according to the AICPA’s Q1 2019 PFSi.

The PFSi bounced back from its first decline in two years to reach its sixth record high in seven quarters.

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.
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