We see evidence of it everywhere — big pink mustaches on car dashboards, round black “U” stickers slapped on the back of car windows and friends allowing out-of-towners to rent rooms in their homes for a modest price. The gig economy, in which individuals work under shorter contracts, can be their own bosses, set their own hours and add some extra cushion to their savings accounts, has been gaining steam as people still seek solid financial footing post-recession.
The gig economy is a rejuvenated world of freelancers that goes beyond musicians and comedians looking to make an extra buck. With apps and websites like Uber, Lyft, Airbnb and TaskRabbit, people can sign up to specialize in different areas of service and help others in need of those services, wherever and whenever they’re available. That means the workers can decide for themselves how many hours they’d like to work and, in some cases, how much they’d like to be paid.
Nearly one-fifth of American adults work in the gig economy, doing everything from ride-sharing and accommodation sharing, to food delivery and babysitting. Based on data from its third quarter National Housing Survey, Fannie Mae found that 83 percent of gig economists work full-time and 66 percent have pursed college education. Impressively, roughly half of gig economists make around $50,000 a year from their freelance services alone, with 34 percent reporting more income this year over last year and 44 percent expecting their income to grow even more in 2018.
Gig economy and homeownership
In a recent study of how participants in the gig economy perceive homeownership, Fannie Mae researchers found that freelancers accumulated more household income in 2017 than non-gig economists and view their financial situations more optimistically than most — 44 percent even see their finances improving in 2018.
In terms of actually purchasing homes, however, participants in the gig economy aren’t as confident. According to the study, most gig workers who currently rent think it’s too difficult to get a mortgage because they can’t afford to a down payment or their credit will disqualify them. However, most stated a desire to own a home rather than rent, but are scared away by the current housing market and don’t plan on buying anytime soon. They do remain optimistic about buying in the future, however.