In December 2021, when the 30-year fixed mortgage rate still averaged 3.1%, a borrower could get $700,000 mortgage that required monthly payments of principal and interest of just $2,989.
Fast-forward to Wednesday, and a $700,000 mortgage taken out at the current average mortgage rate of 6.90% would equal a $4,610 per month payment, which is $583,000 more over 30 years than that mortgage issued at a 3.1% rate. When adding on insurance and taxes, that monthly payment could easily top $6,000. Not to mention, that calculation doesn’t account for the fact that U.S. home prices in June 2022 were 12% above December 2021 levels and 39% above June 2020 levels.
Mortgage planners like John Downs, a senior vice president at Vellum Mortgage, have the hard job of breaking this new reality to would-be homebuyers. However, unlike last year, Downs says most 2023 buyers aren’t surprised. The sticker shock, the loan officer says, is wearing off.
Just before speaking with Fortune, Downs wrapped up a call with a middle-class couple in the Washington D.C. area, who told him they were expecting a mortgage payment of around $7,000.
“The call I just had was a typical area household. One person makes $150,000, the other makes $120,000. So $270,000 total and they said a payment goal of $7,000. I’m still not used to hearing people say that out loud,” Downs says.
Even before these borrowers speak to Downs—who operates in the greater Baltimore and Washington D.C. markets—they’ve already concluded that these high mortgage payments will be “short-lived,” and they’ll simply refinance to a lower payment once mortgage rates, presumably, come down.
To better understand how homebuyers are reacting to deteriorated housing affordability (and scare inventory levels), Fortune interviewed Downs.
This conversation has been edited and condensed for clarity.
Fortune: Over the past year, mortgage rates have spiked from 3% to over 6%. How are buyers in your market reacting to those increased borrowing costs?
John Downs: I must say, the reaction today is quite different from last year. It’s almost as if we have lived through the “7 stages of grief.” We appear to have entered the “acceptance and hope” phase.
With all the reports pointing to home prices stabilizing, one might think that buyers are comfortable with these rates and corresponding mortgage payments. The reality is quite different. Many would-be homebuyers have been pushed out of the market due to affordability challenges through loan qualifications or personal budget restraints. Move-up buyers also find themselves in the same predicament.
As a result, my market (Baltimore-DC Metro Region) has 73% fewer available homes for sale than pre-pandemic, 57% fewer weekly contracts, and an 8% increase in properties being relisted. (Information per Altos Research) As a result, prices have remained relatively stable due to the balance of buyers outweighing sellers.
I’m seeing buyers today taking the payments in stride for various reasons. Their incomes have risen dramatically, upwards of 25-30% since 2020, and the income tax savings through the mortgage interest deduction is now a meaningful budget item to consider. Many also say, “I can always refinance when rates come down in the future,” which leads to a sense that this high payment will be short-lived.
When I say buyers are comfortable with these payments, I know there are also two to three times more buyers who run payments using online calculators who opt out of having conversations in the first place! To prove this, our pre-approval credit pulls (a measure of top-of-funnel buyer activity) are running about 50% lower than pre-pandemic.
Among the borrowers you’re working with, how high are monthly payments getting? And how do they react when you give them the number?
For the better part of the last decade, most of my clients would enter a pre-approval conversation with a mortgage payment limit of no more than $3,000 for a condo and $4,500 for single-family homes. It was rare to see numbers higher than that, even for my higher-income wage earners. Today, those numbers are $4,000 to $6,500 respectively.
To my earlier comment, active buyers today seem to expect it. It’s as if they are comfortable with this new normal. Surprisingly, the debt-to-income ratios of today (in my market) are very similar to where they were five years ago. Income is ultimately the great equalizer. Yes, the payments are dramatically higher today, but the buyers’ residual income (post-tax income minus debt) is still in a healthy range due to local wages.
Remember, we are still talking about a much smaller pool of buyers in the market today so this conversation is skewed towards those with more fortunate lifestyles.
Tell us a little bit more about what you saw in the second half of 2022 in your local housing market, and how that compares to the first half of 2023?
There are dramatic differences between those two periods. In the second half of 2022, there was nothing but fear. The stock market was under stress, inflation was running wild, and housing began to stall. Across the country, inventory began to rise, days-on-market pushed dramatically higher, and price decreases were rampant. The safest bet then was to do nothing, and that’s just what buyers did. The mindset was, “I will wait until prices fall and rates push lower before I buy.”
The start of 2023 sparked a reversal in many asset classes. The stock market found a footing and pushed higher, mortgage rates rebalanced, property sellers adjusted their prices, and employers began pushing out significant wage increases. As a result, housing stabilized, and in some areas, aggressive contracts with multiple offers, price escalations, and contingency waivers became the norm.
The strength in housing was not as universal as it was in 2021. There were very hot and cold segments, depending on location and price point. The affordable sector (<$750,000 in my market) and higher-end (>$1.25 million) seemed to perform very well with heightened competition. The mid-range segment is where we noticed some struggles. One common theme is that buyers at every price point seem much more sensitive to the property’s condition. When the housing payments are this elevated, it doesn’t take much for the buyers to walk away!
What do you make of the so-called “lock-in effect”— the idea that existing market churn will be constrained as folks refuse to give up those 2-handle and 3-handle mortgage rates?
I believe the “lock-in effect” is very real. My opinion is based on countless conversations I’ve had in the past 6-9 months with homeowners who want to move but can’t. Some cannot afford to buy their current home at today’s value and rate structure. Others just cannot stomach the significant jump in payment to justify the increase in home size or the preferred location.
I believe the reason we are seeing struggles in the mid-range home is that the traditional move-up buyer is stuck. In my market, that would be the person who sells the $700,000 home to purchase at $1 million. They currently have a PITI housing payment of $2,750; the new payment would be $6,000 rolling their equity as a down payment. That jump is too much for most, especially those with a median income. That payment would have been $4,500 a couple of years ago, which was much more manageable.
Based on what you’re seeing now, do you have any predictions on what the second half of 2023 might look like? And any thoughts on the spring of 2024?
Despite high rates, the desire to buy a home is still high for many. Given the lag effects of Fed tightening (raising interest rates) coupled with an overall improvement in inflation, one can assume mortgage rates have topped out and will continue to improve from here. Think of playing with a yo-yo on a down escalator, up-and-down movement but generally pushing lower. As rates improve, affordability and confidence will shift, bringing out more buyers and sellers.
I believe this will be supportive for home values and give buyers more choice as inventory increases. Keep in mind, most sellers become buyers, so the net impact on inventory will be negligible. Knowing that some sellers will keep their current home as a rental, one could argue that inventory will worsen. At least buyers will have more house options each week, a stark difference from today.
When discussing strength in housing, thinking through local dynamics is crucial. The DC Metro area has a diverse, stable job market which I do not see reversing if an economic slowdown occurs. We didn’t have a tremendous push towards short-term rentals as many other areas and the “work-from-home” (WFH) environment had most people stay within commuting distance to the cities.
One thing I expect is an unwinding of WFH in 2024. In fact, I’m already experiencing that. Many clients are being called back to the office, either through employer demands or fear they will be exposed to corporate downsizing efforts. As a result, I expect underperforming assets (D.C. condos and single-family homes in transitional areas of the city) to catch a bid while single-family homes in the commuting neighborhoods plateau from their record-setting appreciation over the past few years.
Housing market affordability (or better put the lack thereof) is at levels unseen since the peak of the housing bubble. Do you have any advice on how would-be buyers can ease that burden?
This may be the most complex question because everyone is at a different place in life. For the better part of the last 20 years, my consultation calls were 20 to 30 minutes long, and we could formulate a great plan. Today, that pushes over an hour and usually requires a detailed follow-up call. If I had to sum up all my conversations, I would say it comes down to forecasting life and patience.
Forecasting is a process where you map out life over the next two to three years—discussing job stability, income projections, saving and investment patterns, debts rolling off (or being added), kids, schools, tuition, etc. From there, talking about local market dynamics such as housing supply, population growth, and interest rate cycles and projections. This helps formulate a solid budget to use for a home purchase.
Patience can mean several things. For some, it means renting for a period of time to save more money or ride out periods of uncertainty. For others, it could be looking for the right sale price mix and seller concessions for rate buy-downs, closing costs, etc. Sometimes it means being patient with your desired location. Maybe you just can’t have that specific house in that specific area for a few years and settling for the next best location is good enough for now. Housing used to be a stepping stone for many but the low-rate environment of the past few years allowed everyone to get what they wanted right away. We seem to have lost the art of having patience in life.
Wells Fargo, which downsized its home lending unit early this year, originated $7.8 billion of mortgage loans in the second quarter, up 18.2% from the previous quarter. However, the bank’s home lending earnings were down 13% to $847 million during the quarter compared to $972 million in the second quarter of 2022. The decline was due to loan spread compression and lower mortgage banking income driven by lower originations.
Read next: Wells Fargo lays off 500 mortgage staff as downsizing continues
Wells has also set aside an additional $994 million for expected losses from commercial real estate office loans. The company’s provision for credit losses in the second quarter was $1.7 billion, compared to just $580 million a year ago.
“As expected, net loan charge-offs increased from the first quarter,” Scharf said. “Commercial charge-offs increased driven by a small number of borrowers in commercial banking, with little signs of systemic weakness across the portfolio, and higher losses in commercial real estate, primarily in the office portfolio.
“We had a $949 million increase in the allowance for credit losses, primarily for commercial real estate office loans, as well as for higher credit card loan balances. While we haven’t seen significant losses in our office portfolio to date, we are reserving for the weakness that we expect to play out in that market over time.”
There’s no avoiding it, the colour pink has taken a life of its own over the past few months, and that is courtesy of the firepower from the Barbie movie’s multi-million dollar marketing machine. While the tenants of the Barbiecore aesthetic may appear to be fairly fresh and new, influencing everything from fashion to entertainment and of course room decor, the fact stands that true devotees of the movement have known about its infectious effervescence for decades now.
Naturally, the look lends itself perfectly to a life of celebrity with its vibrance and glamour, with notable names such as Angelyne and of course, Paris Hilton, counting themselves as proponents across generational gaps worth of lavish pink opulence. But if you’re new to the Barbiecore movement, let’s break it down into simple terms: taking its name after Mattel’s famed doll and her life in pink plastic, the idea is to unapologetically layer pink on pink, with touches of dollhouse whimsy thrown in for good measure.
As all movements do, this one has also seen its fair share of rises and dips, where public opinion towards it oscillated between a curious novelty to a reviled symbol of bimbofication. In the case of modern-day convention, the Barbiecore aesthetic has come to represent a much-needed breath of fresh, strawberry-tinged air that heralds optismism and confidence into a post-pandemic world.
So if you’re looking to bring a little of that infectious joy into your own space and transform it into a Barbie Dream House of your own making, here are some great room decor tips you may want to consider!
1. Nailing the right shade of Barbiecore pink
The most obvious way to jump on board the Barbiecore room decor bandwagon is unsurprisingly, by painting your walls in the appropriate hue of pink. But selecting a pink that works best with your space is crucial, as different hues and shades can alter the visual proportions of a room, making it look either smaller or larger than it actually is. So pick wisely!
Shop our picks here!
In the case of Barbie’s exact shade of pink, it tends to lean heavily into an almost lurid tone of magenta. The closest possible paint swatch that matches this pink from Pantone™ is the PMS Rhodamine Red U.
If painting your room pink is too big of a commitment (understandably so), you can always pick to add pink accents such as cushions, lamps, or a mirror, into your space instead.
2. Consider adding a piece of mid-century modern furniture
Introduced in 1959, Barbie and her accompanying dollhouses are inspired by the mid-century modernist trend that had taken architecture and interior design by storm at the time. Mid-century modern design, most commonly abbreviated into ‘MCM’, refers to an aesthetic that typically features clean, geometric lines accented by splashes of colour and an interplay of materials such as wood, glass, and metalware.
Shop our picks here!
This design motif is most famously featured in the first-ever Barbie Dream House set, which was introduced as a two-storey loft chock full of wood facade appointed MCM furnishings and pinks, yellows, and blues, representing the pinnacle of luxury living for the Mod era.
Naturally, you can score some extra Barbiecore points by adding mid-century modern furniture to your room or home, such as a sofa. Fortunately, furniture pieces after MCM can still be commonly found in most stores. Bonus points if it’s pink, for maximum Barbiecore room decor vibes.
3. Camp it up
Another obvious design motif that is common to the Barbiecore aesthetic is naturally, camp. If you missed out on the show notes from 2019’s MET Gala theme, camp simply refers to the ‘love of artifice and exaggeration’, as American writer Susan Sontag describes.
Of course, given how children are the intended target demographic for the Barbie franchise, the notion of camp has always been inherently woven into the fabric of the brand and its visuals with its playful, larger-than-life interpretation of reality.
Shop our picks here!
You can imbue your living space with just a little touch of camp too by incorporating decorative accents such as pillows in the shape of a pair of lips, an oversized high-heel that also doubles as a recliner, or even light fixtures in the form of clouds.
4. More is more
In the Barbie universe, maximalism is king. This is to say that when your life is plastic and fantastic, you wouldn’t have to worry about downsizing or paring things down, whether it be in terms of your wardrobe or your home. Where the latter is concerned, forget about taking pages from Kon-Mari minimalism and find joy instead by filling your happy space with happy things.
Shop our picks here!
Think overhead LED strip lights or fairy lights for ambiance, or plants in fuscia pots to bring nature into your Dream House. There is truly no bric-a-brac too big, or too small, in this Barbiecore fantasy.
5. Don’t forget scents!
Naturally, a big part of cementing the ambiance of your Barbiecore space beyond furniture and decor is by scenting it accordingly. With an entire market dedicated to room scents varying from stone diffusers to candles and even atomisers, the options are truly endless here.
Shop our picks here!
For the purposes of staying on-brand, floral-based scents are your best bet. Some great options include Jo Malone’s Peony and Blush Suede Home Candle, or the Red Roses Home Candle. For a more budget-friendly alternative, Champagne Toast and Tea Rose three-wick candles from Bath and Body Works are also absolutely perfect.
By now, many of us have settled into the continuous shifts of 2020. Hopefully you’ve learned to take it in stride and adjust your business model when necessary in order to continue hitting your goals each month.
As we rapidly cruise towards Q4, I wanted to share some insights from my digital marketing and data teams here at BoomTown to help you move your real estate business forward confidently and strategically.
Data Shows Market Rebound
The data continues to show a promising rebound for the housing market. After a massive halt in March and April due to COVID-19, pending home sales, listings, and solds have continued to increase month-over-month, showing that buyers are back in the market. Agents need to continue monitoring the data, keep an eye on the trends, and work hard to stay on top of their goals.
This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership…This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery. – Lawrence Yun, Chief Economist at NAR
There are several factors driving this rebound. Here are few of the contributors that we’ve identified.
1. All-Time Low Interest Rates
Low interest rates on long-term mortgage loans have fallen even further, hitting an all-time historic low in August, 2020. “Mortgage buyer Freddie Mac reported Thursday that the average rate on the key 30-year fixed-rate mortgage fell to 3.07%, down from last week’s 3.13%. For the second week in a row, it is the lowest level since Freddie began tracking average rates in 1971. A year ago, the rate stood at 3.75%.”(ABC News)
2. Remote Workforce/More People in 1 Home
In fact, a recent survey showed that 75% of respondents plan to increase the number of permanent remote employees. (Gartner) Additionally, a study asking employees if they would choose to go back to the office or continue to work from home showed that 60.2% would continue to work from home. (Hanley Wood)
3. Pent-Up Demand
After the drop in the March and April spring months, the data has continued to show a steady bounce back — indicating pent up demand from the spring. In fact, the number of people applying for home mortgages increased for nine consecutive weeks and recently hit the highest level in over 11 years. (Mortgage Bankers Association)
4. Life Events Continue to Happen
The pandemic may make it seem like the world has stopped, but while things have changed, life continues to go on. Major life events; graduations, babies, promotions or job changes, marriages, retirements, downsizing, etc. These events will continue to happen and consumers demand will move forward in congruence.
The Shift: Consumers & Agents Flock to Digital Solutions
Our BoomTown data is showing promising numbers for new leads generated. The boom in leads generated in July 2020 vs 2019 indicates that the usual hot spring market was delayed a bit, shifting that pent up demand to the later summer months.
New Leads Generated
Jan vs. July (Pre-Pandemic) ↑ 9%
April vs. July (Spring to Summer) ↑ 8%
July ‘19 vs ‘20 (YoY) ↑ 9%
Additionally, some good news for real estate businesses doing digital advertising: cost-per-lead has dropped pretty dramatically and digital engagement is high.
Cost-Per-Lead
Jan vs. July (Pre-Pandemic) ↓ 16%
April vs. July (Spring to Summer) ↓ 3%
July ‘19 vs ‘20 (YoY) ↓ 22%
Most notably, leads that are being generated now exhibit behavioral patterns that indicate strong buying intent. These are leads that are submitting multiple showing requests and repeatedly visiting / favoriting specific listings on our partner clients’ websites.
High Interested Leads
Jan vs. July (Pre-Pandemic) ↑ 51%
April vs. July (Spring to Summer) ↑ 53%
July ‘19 vs ‘20 (YoY) ↑ 53%
Capitalizing on The Right Opportunities
I’ve been hearing for months from brokers and agents who are BoomTown clients — the demand is there. So, the question becomes, how do we capitalize on that demand despite the obstacles posed by the 2020 market? Meaning, combating low inventory and staying productive despite pandemic measures.
Invest in Digital Presence
It’s pretty simple, strike while the demand is hot. Based on the data we’ve seen and the fact that an unprecedented amount of people are spending countless hours on their computer and social networks, there’s never been a smarter time to focus on your digital marketing strategy.
Plus, we’ve seen in our BoomTown data that ~20% of consumers who fill out a buyer lead form also respond that they have a home to sell. We are also seeing the percentage increasing by 1% each month. Agents are always looking for the silver bullet to generate seller leads, but they need to keep in mind that most buyers have a home to sell.
Educate Sellers
What do sellers want more than anything? Current, reliable data that will help them make the smartest decision about selling their home. You are the key here! Take the compelling data that you have within your system and your MLS to show your potential seller leads just how much buyer demand is in the market right now.
So, in addition to educating sellers in your market and investing in your digital presence, I recommend staying on top of the data. Now, more than ever, being “the knowledge broker” is your key to finding success in 2020 and beyond.
When bills begin to hide your kitchen table, your mind may scramble for a quick fix.
Can I make money fast on eBay or Craigslist? Should I apply for a personal loan?Maybe I could sell plasma? You could also pull a classic Michael Scott move and declare, “BANKRUPTCY!”… But, I wouldn’t recommend it.
While flipping thrifted goods or selling fluids can certainly help you make more money, another alternative is to make better useof your current income.
If you’re stuck in a cycle of overspending and mounting debt, it may be time to completely rethink your spending habits. Extreme budget methods — like biking to work, moving in with your parents, or even dumpster diving for dinner — can help you free up spare change in your paycheck and make the most of your hard-earned income!
What’s Ahead:
What is extreme budgeting?
If you’ve ever worried about a surprise medical bill, said “no” to a trip due to lack of cash, or purchased a case of ramen to make sure you had enough food till your next paycheck, you’re not alone.
While there is a myriad of ways to achieve temporary peace of mind, extreme budgeting is for the folks who want to stop the I-never-have-enough-money cycle dead in its tracks.
Instead of just eating out only once a week or canceling their monthly manicure, extreme budgeters reevaluate the simplest of routines.
Do I shop at the grocery store or dig through the trash for dinner?
Do I buy a cheaper vehicle at the dealer or consider rideshare instead?
They cut costs down to the bare essentials, adopt habits that protect their savings, and create a lifestyle that anticipates and eliminates stressful financial circumstances.
10 extreme budget methods to consider
Start your extreme budgeting by scanning your most recent bank statements for nonessential purchases: your subscription to Netflix, afternoon Starbucks run, gym membership, weekend vacations, drinks with friends, and so on. Ask yourself whether or not the transaction qualifies as a basic need for everyday life. If the answer is “no,” then next time say “no.”
You can also use a service like Money Patrol to set spending limits for yourself and begin developing new, healthy habits. However, the true extreme budgeter will take penny-pinching to new heights.
Listed below are ten extreme ways to save money on everything from transportation to toilet paper!
1. Become a “Freegan”
Freegans are known for rejecting consumerism and reducing waste by making use of discarded foods and goods.
You might gag at the thought of rummaging through garbage for your dinner, but freeganism has certainly proved to be an effective means of cutting costs. In fact, by dumpster diving instead of grocery shopping, Freddy Freegan has saved more than $2,000 a year on food.
2. Try vegetarianism or veganism
Did you know one pound of chicken breast and one pound of black beans have approximately the same grams of protein per serving? The difference is the chicken costs five times as much as the beans!
Next time you’re at the grocery store, avoid expensive items like meat and buy cheap, whole foods instead — beans, rice, potatoes, eggs, etc. Test out this tip for a month and see how you and your budget fare!
3. Stop driving and start riding
For individuals who truly want to adopt an extreme budgeting mentality, trim transportation costs down to the bone and ditch the car! Consider ridesharing, take the bus, or ride a bike. Not only will you save tons of money, but it’ll also be better for the environment too!
Check out PocketSmith’s budget projection tool to see just how much money you can save without your current auto expenses.
4. Practice military showers
Instead of swapping your shower head for a low-flow alternative — or, inaddition to swapping out your shower head — save big bucks on your water bill by practicing military showers, or navy showers.
Once you’re wet all over, turn off the water to lather up with soap, then turn it back on once more to rinse. You could save as much as 15,000 gallons of water a year!
5. Downsize your home
Downsizing to an apartment, tiny home, or even a van, may seem intense, but this tip has the potential to increase your savings more than any other. In fact, according to data from ValuePenguin, the average American household spends more than a quarter of their budget on housing alone (including mortgage/rent, property insurance, utilities, and more).
6. Move in with your parents
Living with mom and dad is not a glamorous solution; however, it’s more common than you might think.
Instead of spending thousands of dollars on rent or mortgage payments, redirect those funds to pay down debts, start investing, and even pursue the career path you really want, versus a job that merely pays the bills.
7. Water it down
You heard me. Add a little water to your shampoo, dish soap, orange juice, and even milk to save on grocery costs and make products last a little longer.
8. Use a bidet
If you stood in line for toilet paper in 2020 (right there with ya), this tip may not seem as drastic as it once did. Bidets can cost upwards of $250, or you can pick up a water-spraying attachment for $30. Either way, research suggests you could save $182 a year with this tip.
9. Cut your own hair
Depending on your hairstyle, this may be a no-go; however, this tip could save you hundreds of dollars a year in salon costs. If you’re not ready to attempt a trim yourself, consider volunteering to have your hair cut by a stylist-in-training for cheaper or free.
10. Practice “no spend” weekends
No spend weekends — which are exactly what they sound like — can help you steer clear of impulsive habits like eating out and shopping with friends. Instead, this trick motivates you to plan ahead.
Pack your coffee in a travel mug, invite your friends on a walk or a picnic, host a game night, etc. You could also set aside any cash you would have spent during the weekend and save up for a larger goal instead, like a down payment on a home or a summer vacation.
How does extreme budgeting help your finances?
“Couple Pays off $100,000 in Loans in One Year!” “Man Retires at 35: Here’s How he Did it!” The dramatic nature of extreme budget methods certainly grabs our attention, but the real draw is that they offer us a means of accomplishing significant personal goals quickly.
As referenced above, money is one of the biggest stressors for modern Americans, occupying our thoughts and impacting the lifestyle we’re able to pursue. In the midst of this chaos, extreme budgets offer an attractive alternative. They can help you cut down debt, save up for a house, retire early, set aside money for your kid’s college expenses, and more. You reclaim the reins of your financial circumstances and, in the process, set yourself and your family on track towards independence.
How does extreme budgeting hurt your finances?
While extreme budgeting may effectively address your current needs or help you pursue an ambitious goal, sometimes they neglect the big picture.
You may have plenty of money to put food on the table, but you ignore saving for retirement. As you divert spare change towards student loan payments, you forget to build an emergency fund and aren’t prepared for a surprise dental bill.
An extreme budget puts an immediate need or single goal in the spotlight, but a balanced budget accounts for a variety of costs today and tomorrow. Before you adopt any extreme budget methods, make sure you’re prepared for unexpected expenses and future needs.
Who should (and shouldn’t) practice extreme budgeting?
As mentioned previously, extreme budget methods can sometimes distract us from managing a variety of financial needs well.
If you have an “all-or-nothing” personality, for example, extreme budgeting may make you laser-focused on one goal, like stretching your paycheck to cover food, housing, and transportation. In the process, you might struggle to prioritize your student loan debt.
In the same way, extreme budgeting habits may help you make ends meet but also prevent you from addressing a larger problem — like excessive credit card usage. No matter how much you penny-pinch, that hefty bill will continue to find its way into your inbox every month.
With this in mind, extreme budget methods can be particularly beneficial for individuals who want to accomplish a specific goal in a specific amount of time. Biking to work or only buying discount foods, for example, can help a college graduate save money for a down payment on a house. An engaged couple may temporarily forgo dining out to collect cash for upcoming wedding expenses. Or, a young family could put every $5 bill earned into a jar to save up for a Disney vacation.
Remember: the primary goal of extreme budget methods is to help you regain control of your finances. So if your intense financial regime becomes oppressive or distracts you from future needs, those habits may not be a helpful means of achieving financial freedom.
How to start extreme budgeting
The best place to begin your extreme budgeting journey is by developing a clear understanding of your current financial situation.
How much income are you bringing in?
How much are you spending and on what?
What areas of your budget have been neglected?
As you dive into your bank statements, it’s easy to feel overwhelmed. However, there are a variety of personal finance and budgeting apps available to help you get organized.
One option to consider is PocketSmith, which connects with more than 12,000 financial institutions worldwide. Once PocketSmith has imported your personal information, the app presents you with several tools to categorize and organize your finances. You can break your current budget down into more manageable chunks, such as weekly or even daily budgets, and even forecast your spending and saving habits up to 30 years in the future.
Test out PocketSmith’s free Basic Plan today or sign up for the Premium Plan for $9.95 a month to receive automatic bank feeds, transaction importing, and more.
If you want a tool to help you monitor and manage your investment portfolio, consider Empower. Empower provides a “skimmable” version of your investments with a color-coded, visual representation of your asset allocation. Empower also has resources to help you budget, prepare for retirement, develop an estate plan, refinance your mortgage, and more — so you can keep all your finances in one location!
(Personal Capital is now Empower) Empower Personal Wealth, LLC (“EPW”) compensates Webpals Systems S. C LTD for new leads. Webpals Systems S. C LTD is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
Summary
Extreme budget methods are not for the faint of heart.
You may bike to work in the rain to avoid spending money on gas. Or, perhaps you’ll miss trying that new local bistro with your partner and opt for a dumpster dive out back instead. However, the discomfort you feel forgoing creature comforts and adjusting ordinary routines is a small price to pay for financial independence.
Next time you pull your credit card from your pocket, first ask yourself, “Is there a cheaper way?” Sign up for a budgeting app like Empower or PocketSmith and start reevaluating your spending habits today!
“Consumers looking to re-mortgage may find it difficult to afford higher interest rates, so seeking independent advice is essential to consider every option available to them, such as downsizing,” says Rachel Springall from financial data firm Moneyfacts.
Finding deals that work proves challenging “The hardest thing for us has been the underwriting at current interest rates,” MacDonald-Korth said. “Most buildings’ financials were not designed to withstand the 520-, 550-basis-point jump in rates from one year to the next. While we have seen our pipeline balloon, especially with banks holding back and credit … [Read more…]
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The ripple effect of a financial mindset can be seen in every aspect of your life.
Think about it: If you are not mindful of how you spend and save money, then you will be in a constant struggle each and every month.
If you are simply someone who is struggling to make ends meet, there are many things we can do to save money. If you are trying desperately to reach financial freedom sooner, then you need these best money hacks to make it happen sooner.
Around here at Money Bliss, we spend a lot of time on our money mindset and setting goals.
Everyone is in a different season with their finances.
But, one thing is true… Most of us never learned proper money management.
Do you find yourself in a constant cycle of financial struggle? Do you feel like you are constantly trying to live up to unrealistic standards?
It is easy for people to feel that they are constantly broke, and in some cases this is true. But, it is also important to remember that there are ways in which you can make more money and start saving for your future.
Since changing money habits does not always come easy and often requires some serious changes in our mindset, we are here to support you to find the top money hacks.
Read on as we share 50+ ways you can start saving more money as well as making more money while also saving your sanity!
What are Money Hacks?
Money hacks are the ways in which people stretch their money.
These money hacks can come from a variety of sources, such as personal experience, family members or friends, and other individuals on social media.
Money hacks can come in many forms such as:
Simple money saving hacks
Ways to make money on the side
Strategies to make every dollar count
Thrifty ideas to be more frugal
Ideas to be more conscious of our waste
All in all, money hacks will help you to spend less money. Thus, saving more money.
As you will learn at Money Bliss, saving money opens up doors of opportunities
Best Money Hacks
Money hacks are ways to build long-term wealth.
Even though most of the hacks for money include quick saving wins, over the long term, you will actually start a snowball effect of more money in your bank account.
Sometimes, it can be difficult to find the motivation to save money, but these 7 best real money hacks will help you reset your financial mindset and start saving!
The best money hacks are the overarching big picture concepts that you must master for long-term success.
1. Think Big
Open up your mind.
One way to reset your financial mindset is by opening yourself up to new ways of thinking about spending and saving.
Too often, we are focused on what is directly in front of us instead of thinking about the big picture.
A great way to think big with your finances is to decide how you want to live life with intention.
2. Habit of Saving Money
Get back in the habit of saving.
If you have been beyond your means or barely scraping by, the best way to get back on track is by saving at least 20% of your income.
This may seem a little ludicrous. However, by prioritizing saving first, you will be pleasantly surprised how well you live off the rest.
In this post, there will be so many simple and easy ways to start saving today.
3. Make a Plan for Your Money
Create a spending plan (aka that dreaded word budget).
Creating an outline for what you want and need will help you to make smarter decisions about your spending.
This concept has been made too difficult over the years.
The bottom line is you want to spend less than you make. So, make a plan for that to happen today.
4. Make Money on the Side
This one is huge!
Personally, making extra money has been a priority for the last 5 years. We spent many years trying to cut our expenses and hating our inability to actually spend less as a growing family. So, we changed our focus to finding ways to make more money instead.
Start a side hustle. If you are not making enough to live comfortably, start a side hustle! Use your unique skill set to make extra cash.
Pick up a second job or ask for more hours.
There are plenty of ways to make money fast.
5. Invest in Stock Market
This means a way to make money or increase your net worth. AKA make your money work for you.
Too many times, the concept of investing is big and scary. The thought of starting is way too overwhelming. So you put it off until next week or next month. Then, a couple of years go by and you have not invested your money.
That is the biggest financial mistake you can make.
Start small by investing in an index fund. Each month consistently add more money.
If you want to learn to trade stocks, then you must enroll in the best investing course I have found.
Read my in-depth investing course review.
6. Pay Off Debt
Ugh… debt is the cash flow killer.
You are unable to make forward progress if you are straddled by debt.
Figure out how to pay off debt ASAP.
When calculating how long it will take to pay off high-interest debt, you should consider paying the highest interest rate first. Here is the best debt payoff app available.
7. Watch Your Spending
Be mindful of your spending.
This is a great practice that many people need to start doing again, regardless of how much money or how little money they have.
Every few months, you need to evaluate your spending to see if it matches up with your values.
As you can imagine there are many money hacks that can help you save, but the list above is the money hacks that will make the biggest difference the quickest. Below we have many more money hacks for you to explore.
Hacks for Saving Money
Money app hacks are small, quick, and easy ways to improve your finances.
They can range from things like automating your budget or creating a money jar that pays for itself, to more complex solutions like changing your tax withholding or moving money around to get a higher return.
Honestly, there are so many life hacks for saving money.
8. Automatic Savings
This is a practice of automatically transferring money from your checking account into your savings account on a regular basis.
It is best to set a transfer amount and stick to it.
Since it is easier to save your money before you spend it, you must save as much money as possible in order for this strategy to be effective.
9. Financial goals
A financial goal is a long-term, quantifiable expectation for how much money you want to have, or what you plan on doing with your money. Your goals can be as simple as saving for the down payment on a house or as involved as saving for retirement.
Our financial goals allow us to set specific, numerical targets that help us achieve our desired lifestyle in a more concrete way.
You must set smart financial goals.
10. What brings you joy?
At the end of the day, it is important to remember that life is all about finding what brings you joy.
The question is open-ended, but your money must line up with what brings you joy.
Spend a few minutes and stew on the question.
11. Build an emergency savings fund
Building an emergency savings fund is a great idea if you are in the habit of saving money and want to make sure that you have some money saved up when times get rough.
If you are struggling to save, there are a few ways you can increase your savings.
For example, you might be able to set up automatic transfers from your checking account into an investment account. You should also make sure that you have a way to save money outside of your checking account.
Saving cash in a jar or saving up coins are ideas for some people.
12. Invest spare change
If you go shopping and buy something, most stores will give you change. If you use a debit or credit card, you can do the same thing with help of a popular app!
Simple money hack: investing your spare change.
In order to invest your spare change in an account, you can open one for as little as $5. Acorns then automatically invest the money from your checking account and into a savings acorn account.
As the round-up feature continues to add upon each purchase, it is a good idea to invest in this app so that you can save more dollars!
13. Challenge Yourself to Save
If you are looking to save money, it is best to set up a budget that includes challenging yourself.
A great way to do this is with the no spend challenge.
A no-buy is when you decide to simply not make any purchases for a certain amount of time.
A no-spend is when someone decides to not spend any money in a certain period of time.
When you are struggling with spending too much money and want to reset your wallet, then give up spending money. Period.
14. Join a buy nothing group
The buy nothing groups are a growing movement that started in order to help people cut their ecological footprint, save money, and break free of consumerism.
This is a great way to find things you need as well as declutter your house.
15. Negotiate everything
The key to successful negotiation is preparation.
Research the company’s past sales, price changes, and discounts offered in order to get a better understanding of what you’re negotiating for.
Don’t be afraid to negotiate.
What is the worst thing that can happen when someone says no!?!
16. Refinance Your Mortgage
It is never too late to refinance your mortgage.
In fact, it might be a good idea if you’re in the market for a new home or refinancing your loan on an existing property.
You must weigh the costs of refinancing to how much you will save over the time period of the loan.
Ask around for mortgage broker recommendations and get at least two quotes.
17. Downsize your Home
Downsize your home is the term for reducing a residence in size. This can be done by either moving to an apartment or buying a smaller house. There are many benefits of downsizing, including living a more affordable lifestyle and having less upkeep.
Downsizers use their homes as investments and save money on rent or mortgage payments.
18. Cut the cord
With the internet becoming accessible to everyone, people have started cutting their cable and watching shows online. People can save up to $500 a year by cutting cable from their bills.
Cut the cable & stop watching TV!
19. Learn about Finances
Ask for help.
If you are struggling, there is no shame in asking for assistance from your friends or family members.
The goal is to get ahead with money and not keep digging further into a hole.
Check out any of our courses to help you.
20. Save for What You Want
Decide what you want most and work towards it with the money you have now, instead of waiting for a windfall or a large inheritance.
This may mean setting aside $200 a month.
For example, as a reminder of your long-term goal of buying a beach property, you may buy something you would hang in the new place. Every time you see it, you will be reminded of what you are saving towards.
Budget Hacks
Financial hacks are not unusual.
Since it is so easy to overspend, you must know a few budgeting hacks ahead of time.
21. Need vs Want
A want is a desire for something, while a need is something that fulfills the requirement of your body like food or shelter.
When you think about buying something, ask yourself if it is a want or a need.
By uncovering needs vs wants, you are quickly able to find ways to spend less and save more.
22. Avoid Temptation
To avoid temptation, it is important to maintain a healthy amount of physical and emotional distance from the things that tempt you.
Sometimes, spending triggers are easy to avoid but other times they’re not.
However, people should always be aware of their temptations and try to stay away from them because it will lead to unnecessary debt or stress in the long run.
23. Practice the 30-day rule
Many people wonder what’s the 30 day rule with money…
The 30-day rule is the principle that states that you should practice a new habit or stop an old habit for at least thirty days before expecting success.
When it comes to your money, it means to wait thirty days before making big purchases or changes.
24. Keep a Budget Binder
A budget binder is an important tool that helps people keep track of their finances.
The binder can help people plan out their finances by providing a place to record expenses and income.
Keeping a budget binder is an effective way to track your spending and keep yourself accountable.
By keeping it, you can easily plan for future expenses in advance as well as see what money could be saved or spent on different items over time.
25. Get a spend tracker and use it regularly
Track your spending for 30 days. It can be a good idea to track your spending for at least a month to get an idea of what you’re spending and where.
A spending tracker is a tool that helps people keep track of how much they are spending on a certain item. It is important to use this tool regularly in order to be able to see patterns in your spending.
Then, review your spending. Share it with a trusted friend or family member to come up with some goals to reduce expenses in order to save money.
26. Create a budget
Create a budget, and follow it.
When you schedule your spending, make sure to leave room for savings. This is the easiest way to ensure that you can stick to your budget.
Find more budgeting resources on our site.
27. Pay Bills on Time
This should be a simple statement that we all know. However, life can throw curveballs.
Try to pay your bills on time and in full every month, and make sure all of your bills are paid each month.
This will show lenders that you are responsible and that you are taking care of your credit. Plus you don’t rack up those pesky late fees and high interest rates.
28. Avoid Missed Payments
Don’t miss any payments, and pay off your balances each month to avoid paying high interest rates or fees on late or missed payments.
Read again… do not miss paying your bills.
29. Reconcile Your Checking Account
Balance your checkbook monthly. Okay, no one really uses a checkbook anymore, but you can still do this with pen and paper.
Even better, use Quicken as a simple way to balance your checking account. Read my Quicken review.
This is a great way to check for being charged too much or find a subscription you don’t use anymore.
30. Avoid Summer Budget Busters
Avoid spending money for the summer by just being conscious of your spending and reviewing what is different than the norm.
It is too easy to get into the trap of spending money because the weather is warm.
31. Review your Credit Card Statements
If you’re like most people, you probably review your credit card statements once every six months.
What’s the best way to go about reviewing them?
It depends on how often you use your credit card, how much debt you have, and what your credit score is. You should review your statements at least once a year if you’re carrying a balance on your credit cards.
If you use your credit card, then you should review your statements at least monthly.
32. Use the Cents Plan Formula
While the 50/30/20 budgeting rule is popular, our method of budgeting your money will be more helpful.
Learn how to divide your income into various categories.
Check out the Cents Plan Formula.
33. Use Cash
Use cash instead of credit cards to spend, which will make it easier to limit yourself to how much you can spend.
The envelope system helps you save money by only spending from one designated cash stash each month and withdrawing a set amount for different types of expenses (like groceries).
34. Spending Freeze
Implement a spending freeze, which helps you get used to not buying things for an allotted time so that when the freeze is over, it’s easier to buy what you want.
You will be surprised how much random online shopping you do.
Begin your spending freeze now.
35. Use a Budgeting App
Use your bank’s budgeting tools, like Quicken, which can help you track how much money is coming in and out of your account.
This is the simplest way to manage your money wisely.
Using a money app or a personal finance website can help you to stay organized and get more creative about your budgeting.
Check out this list of the best budgeting apps available.
Hacks to Make Money
Hacks to make money are a list of ways to generate income for yourself. Many ways to make money include blogging, affiliate marketing, or day trading. These money making hacks are great, but they can take more time and energy invested.
36. Use cash back apps
Cash back reward apps like Ibotta are a way to get extra money for your purchases.
They take some time getting used to and you only have access to partner stores that offer cash-back offers. It only takes a few seconds to make some extra cash.
Check out the best cash back apps available.
37. Ask for a Raise
A raise is an increase in pay for a job, labor, or service.
If you are concerned about asking for a raise, then you are missing out on lost money.
Your boss may be receptive to it, then try negotiating more money. Not only will this be good for your career, but also the relationship between you two can improve as well.
38. Get a side hustle
A side hustle is an additional job or career, usually, one that requires only a small amount of time and effort.
For example, someone who wants to work on the weekends might start a side hustle as a bartender.
Side hustles are a form of entrepreneurship that allows you to earn money and do little tasks. They are not difficult or time-consuming, but they can still help you make extra cash on the side.
Pick one of the best gig economy jobs.
39. Rent out a part of your home
A part of your home is often a room, which can be rented out on Airbnb.
Airbnb is the largest and most successful company in the world that lets people rent their extra space or properties. They are a well-known company that provides an easy way for people to make money from their extra space.
Use Neighbor to lend out your space in your home.
40. Declutter: sell your junk for cash
Decluttering is the act of getting rid of excess or unnecessary items.
In order to declutter, you must be willing to give up something that has been a part of your life for a long time. It is important to remember that decluttering does not have to be a quick or easy process.
Then, sell your stuff on Facebook Marketplace, Nextdoor, eBay, etc.
Learn more at Flea Market Flippers.
41. Earn Money While Watching TV
Although it is not a fast way to get rich, this can be used as a side hustle.
It’s better to use the money earned from watching TV or something else that takes up your time for other things like bills and groceries.
Survey platforms are online sites that allow people to earn money while watching TV.
The survey platform will send surveys through the mail or email, and then they can choose whether they want to take the survey for a set reward amount or if they would like cash back on their purchase.
One of these options is MyPoints, which allows users to earn points by completing tasks such as taking surveys and shopping online at specific retailers.
Others include:
42. Maximize Your Income
Find ways to increase the amount of money you bring in, whether that’s through a side hustle, increasing hours at work, or asking for a raise.
In today’s society, there are plenty of ways to make more money.
Only you put a limit on what you are capable of earning.
43. Build Your Credit
Building your credit can be a long process, but it’s worth the effort. If you’re trying to establish or improve your credit score, here are some tips that might help:
Try to keep your credit utilization rate below 30% at all times.
Do not open too many new lines of credit in a short period of time.
Pay your bills on time.
This will help you avoid damaging your credit score.
Hacks for Free Money
Hacks for free money are a form of fraud wherein the perpetrator solicits payment via PayPal, credit card, or other methods in exchange for access to what they promise will be a legitimate business opportunity.
Hacking free money is a way to make more cash, fund your financial goals, or help you pay off debt. There are lots of ways that people hack their finances and use cash back apps for some extra income.
Other options include signing up for bank bonuses or credit card bonuses.
Honestly, real free money hacks are more likely to be scams. So, beware when searching online.
Money Hacks in the Kitchen
You can save the most money by looking at what you eat.
Typically, people waste over 25% of their grocery budget and throw out food. Would you willingly throw out $250 a month? Probably not.
So, learn how to stretch your money for food.
44. Start meal planning
Meal planning is a money-saving strategy that can help in the long run. It’s also important to eat healthily and reduce food waste when meal planning.
But planning ahead will help save on the grocery budget, and it’s not too late to start now.
Start meal planning by deciding what you want to eat for each day. Then, make a list.
45. Say no to prepackaged foods
Packing your lunch for work or school can be time-consuming, especially if you have a family.
Some people prefer to buy prepackaged foods because they save time, but this is not always the best option.
A better choice is to make your own food at home and pack it for lunch, which you can then eat in peace without worrying about what other people might be saying about the food you packed.
46. Eat at home
Eating at home is a way to save money. It may be uncomfortable for those who do not enjoy cooking as it requires extra effort and time.
Instead of getting food at restaurants, consider cooking your favorite meals at home.
You can save money and time by eating the same meal over and over again.
Learn about the frugal home must haves.
47. Grow your own herbs and food
The most common methods of gardening include container gardening, hydroponics, and both indoor and outdoor gardening.
Many people are growing their own herbs and food for the satisfaction of being able to eat something that was grown with their hands.
48. Take your lunch
If you are interested in saving money, consider taking your lunch. This will save you up to $1,000 a year on work lunches and make it easier to meet the recommended daily intake of fruits and vegetables as well.
“Take your lunch” is an invitation to eat at home. There are many benefits of eating out less often, such as saving money and gaining more control over food choices.
Travel Hacks to Save Money
The following are travel hacks that can help you save money on your next trip.
Some of these hacks include traveling during weekdays, using public transportation, staying at hostels and Airbnb instead of hotels, and using a travel credit card.
49. Use foreign websites for lower prices abroad
Foreign websites are websites that have been created by people from other countries, and they sell products in the language of their country. These websites often offer lower prices on products than what is offered in the United States.
If you’re traveling abroad and need to find a place to stay, there are plenty of websites that can help. A few websites have deals on places where travelers often stay while they travel internationally.
50. Stay for free or get paid to house sit abroad
A house sitter is someone who looks after someone’s property for a certain amount of time in exchange for the promise of payment.
House sitting is typically offered by homeowners to travelers and others who are looking to stay in a particular location for an extended period of time.
The main types of house sitting include:
– full-time house sitters, who are responsible for all aspects of the house and who are typically paid a monthly salary,
– part-time house sitters, who may be responsible for taking care of one or more specific tasks such as gardening or handling the mail
51. Hide your search
To avoid being taken advantage of by airlines, it is best to open a new incognito or private window between searches.
This will make sure that you are not tricked into buying tickets that may be significantly more expensive than they need to be.
Airlines use cookies in your browser to make you believe the prices are going up and up.
Money App Hacks
Money app hacks are ways that people have figured out to make their money work for them in terms of saving and spending. These apps offer different features, such as budgeting, tracking your spending, and saving money.
If you want a simple way to save money, then any of these money apps are designed to find excessive spending.
52. Billshark
This is a legitimate way to save money on monthly bills. Billshark offers you the opportunity to save up to 25% each month (when compared with regular bill payments).
All of this can be done for you by BillShark team, and there are no fees involved!
Try Billshark for free!
53. Trim
Review your spending habits to find what you can cut out, like subscriptions.
Find other ways to save by looking for ways to reduce costly bank fees or getting a discount on your cell phone plan. By using Trim, you are saving money and improving your financial health.
Sign up with Trim now.
54. Truebill
Truebill can help you to track your spending, save money and get a clear picture of your financial life.
This helps you identify services that you are no longer using but continue to pay for. It will help save money by automatically negotiating prices with your service providers and receiving a refund of the money going to waste, which is free money.
Get started with Truebill.
Which Life Money Hacks Can You Start?
This is a lot to take in, but don’t worry.
Take the time to read through each suggestion and consider how you can implement it into your life.
The more hacks you try out, the closer you’ll get to a healthy financial mindset.
These are the life hacks to save money I have found to work for me and my family in order to reset our financial mindsets and grow our net worth.
Everyone will find their niche and what will work best for them.
Personally, you need to figure out how do I make more money. That will make the biggest impact the fastest.
What have you done with your money lately?
Know someone else that needs this, too? Then, please share!!
Finding deals that work proves challenging “The hardest thing for us has been the underwriting at current interest rates,” MacDonald-Korth said. “Most buildings’ financials were not designed to withstand the 520-, 550-basis-point jump in rates from one year to the next. While we have seen our pipeline balloon, especially with banks holding back and credit … [Read more…]
Growing unemployment across the U.S. has prompted millions of adults to move back in with their parents.
As a new Zillow analysis shows, the potential rent lost from Gen Z alone could total an estimated $726 million, and the ripple effects of their next move could have far-reaching consequences for the housing market.
The number of adults living in a parent’s or grandparent’s home grew by more than 2.7 million in March and April, nearly triple the next-largest two-month increase from the past five years. A large majority of those who moved home – about 2.2 million – are from Generation Z, and between 18 and 25 years old.
Those 2.2 million Gen Zers represent an estimated $726 million in rent payments each month – payments that could be lost if these moves prove to be more than a temporary measure. That represents about 1.4% of the rental market at risk. It is highly unlikely that all leases will be broken and this full amount would go unpaid, but it serves as a gauge of the potential impact on housing.
The next move this population makes could shape the housing market’s near future. If jobs quickly return to pre-pandemic levels, the housing status quo could return just as quickly as these renters return to the market. But if jobs are permanently lost or slower to recover than expected, that could free up many rental units and drive down prices.
“The share of adults living with their parents has been high since the global financial crisis of the aughts,” said Zillow Senior Principal Economist Skylar Olsen. “Then, it was Millennials flocking to the basements and spare bedrooms of their Baby Boomer parents, where many remained as rent burdens grew. Now, it’s Gen Z’s turn to ride out today’s crisis amid massive unemployment. But this time, rents are more likely to slow, easing the path to returning to living on their own even if some under-employment persists. Apartment construction has exceeded historic norms in recent years and some are likely to double up or live more affordably in all kinds of ways, which should soften rent growth, at least for now.”
Previous Zillow research has shown renters in some industries highly affected by coronavirus-related layoffs were struggling to keep their heads above water even before the pandemic began. It’s possible that many will appreciate the breathing room afforded by living with parents if allowed to stay rent-free, and stay even after their jobs return. That could allow some Gen Zers to save enough to move into homeownership more quickly, or perhaps even delay their parents from downsizing into a smaller home while a child is still living under their roof.
Young Americans move more often in general because they tend to have less stable employment and have not had time to accrue the same level of savings as older counterparts. Many also move home during the summer due to college schedules, typically bumping up the share of young adults living with parents by 2-3 percentage points from April to July.
It is likely that some college students made that move earlier this year as campuses closed due to COVID-19, contributing to the jump seen in April, but there were far more young people living with parents in April than even during a typical summer peak, indicating the usual seasonal shift was super-charged by soaring unemployment. Recently unemployed young people moved back home at roughly the same rate as usual – about 60% of them typically live with parents – but the pool is much bigger than ever.
Metros with a higher share of young renters have a greater potential for impact. This includes Austin, Kansas City, Cincinnati and Pittsburgh. On the other end are areas with more millennials and older renters, including Miami, New York and Los Angeles, each with less than 1% of the rental market made up of young people who have moved home.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]