It is safe to say that purchasing a home is quite possibly the single largest investment most consumers will make during their lifetime. So, it is natural for them to be a bit cautious, ensuring they understand all the market nuances before making an offer on a home.
Unfortunately, that is not always the case. Some buyers purchase on impulse without checking the current market conditions, often times costing themselves money or purchasing the wrong property in the process.
When you are ready to start looking for a new house (after getting pre-approved and choosing an agent to represent you), it is a smart idea to do your due diligence to determine if the local market favors buyers or sellers.
Buying a home during a seller’s market is not ideal but it is still possible to get a great deal if you know what you are looking for and have patience in the process.
As a reminder, a seller’s market is one where there is 5 months (or less) of available inventory for consumers to choose from. Obviously, the less homes available, the fewer options both buyers and investors have. It can also mean a lot more competition for the existing properties as there are less homes to pick from. It is simple supply and demand!
In this guide, we will explore some of the strategies buyers should employ and provide essential tips on how to find the right home in a seller’s market.
Get Ready To Buy
The easiest way to lose out on the home of your dreams is to not be adequately prepared to purchase a home when you start actively looking for a property. You can avoid that concern by getting your finances in order quickly.
Start talking with a mortgage broker, lender, or financial institution before you hit the pavement to go look at homes. Getting a loan pre-approval will show you your loan ceiling (how high of a mortgage you qualify for) and will also tell sellers that you are serious about buying a house.
Once you have your pre-approval, your agent should be able to provide a list (many are automated) of all the properties that meet your search criteria.
In many instances, they can provide a drill-down to a specific home style, price point, particular amenity (i.e. pool, 3-car garage, acreage, etc.), school district, and a host of other key features that may be important to you.
The more specific your list is, the less time you will waste looking at properties you have no interest in, and the faster you will be able to check out the houses on your short list that interest you the most.
View Homes As Quickly As Possible
When there is a high demand for homes, do not be the buyer who waits until the weekend to view those properties. The faster you can see the home, the better chance you have of getting it contracted.
If you wait, others may are also interested in it and the property may already be off the market by the time you get around to seeing it.
As always, ensure you have an agent that represents you assist with all your real estate needs, including getting educated on anything you do not completely understand or need more clarification about.
When you can, have your agent schedule a visit as soon as the home is available for showings. This is especially important, critical even, for houses where the viewing times are limited.
Getting in quickly for a preview could be the difference between writing an offer on the house and continuing your search because another buyer beat you to it.
Eliminate Buyer Drama
When there are more buyers than homes to choose from some consumers can become overly aggressive. It is understandable that low inventory makes for a more competitive marketplace but you need to do everything in your power to steer clear of conditions that drive bad behavior and poor decision-making.
With the potential for bidding wars, above list price offers, cash proposals, and no/low home contingencies, you can easily get caught in a minefield without a solid exit strategy.
For instance, the vast majority of buyers will be looking for a good deal that includes a decent location and a home that is in reasonably good shape. The competition to see these homes can cause some buyers to act rashly when the same homes are being previewed and viewing overlap is occurring.
To the best of your ability, remove yourself from any situation where an altercation may occur, and you will minimize the risk of making a hasty decision to “beat the competition”.
Avoid Overpaying
Home prices often go up slightly during a seller’s market because the supply of homes is limited.
Whenever possible, buyers need to remove as much emotion as possible from their purchasing decision to ensure they do not get into a bidding war or rationalize why it is a good idea to pay beyond what the home is worth, especially if that amount is over the appraised value.
Remember, overpaying today could backfire as the market could become a buyer’s market by the time you get ready to sell.
This is why it is critical to have a buyers agency agreement to work with a real estate agent who understands the local market. Your agent can advise you on the price and provide other relevant information about the community as a whole.
They can also provide tips and information about similar homes in the area that have recently sold or are up for sale.
Once you find a home you want, do not rush into making an offer, even at the risk of losing the home to buyers who are willing to make a quicker decision. Re-look all the numbers and have patience through the process.
You may find you will get the home you want at a price you are comfortable with. When ready, always make a strong offer that will pique seller interest and perhaps get the home before others have an opportunity to bid.
Do Not Ask For Special Treatment
When there is minimal inventory, it is not always a good idea to put too many demands on sellers. This is especially true if the home is getting a lot of activity.
When the market is calm, it is normal for buyers to ask for various appliances like washers and dryers, refrigerators, lawn mowers, etc. as a sort of “freebie” with the home purchase.
You should not apply the same principle in a seller’s market because the odds are stacked in the seller’s favor. If there is more than one offer, you can bet the sellers will take the one with conditions that are most favorable to them.
Often times that is the offer without stipulations so keep that in mind when considering what to ask for as a condition of purchasing the property.
Negotiate In Good Faith
Savvy home buyers will attempt to negotiate for a lower price and favorable conditions any chance they get. You can expect sellers to use their leverage to get the most money for the home they can while giving up fewer concessions.
Being able to bridge the gap and find common ground will help the negotiation process go much more smoothly.
Some of the ways you can accomplish this are to avoid haggling over inconsequential items, determining if the items on your must-have list are really worth potentially losing the home over, ensuring you make a fair offer upfront (fair does not always mean your best offer, but a low-ball offer will typically get you nowhere, especially in a fast paced sellers market), and learning to compromise on issues that appear to be slowing down progress (i.e. closing costs, high cost maintenance/upgrade items, and closing dates).
Buying In A Sellers Market Parting Shots
Buying in a seller’s market is not an ideal situation. However, there are still plenty of opportunities to make it through the home purchase process without much fanfare and still buy the home of your dreams!
If you have a little patience, avoid being bullheaded, and keep your wits about you, the chances of getting conditions and a price favorable to you go up dramatically.
By following the tips provided above you will give yourself every opportunity to turn the home buying experience into a positive one that nets you exactly the type of property you are seeking.
Respect and adhere to the advice your buyers agent provides, while staying within your financial means, and the process of buying a home in a sellers market becomes much less daunting to navigate. Happy house hunting!
Pharmacy school student loans are one way for potential pharmacists to subsidize some or all of the costs associated with attending pharmacy school.
There are several pros and cons to taking out a pharmacy school loan, from the opportunity to receive student loan forgiveness to potential fees for late payments or a drop in credit score.
Keep reading to learn how much it costs to attend pharmacy school, a few different ways to pay for it, what a pharmacy school loan covers, and the ins and outs of pharmacy school student loans.
Average Cost of Pharmacy School
The average cost of attending pharmacy school spans anywhere from $65,000 to $200,000.
It’s a wide range but, generally speaking, in-state, public schools are on the lower end of the scale, costing around $14,800 to $82,000 per year, while pharmacy programs at private institutions can run between $74,800 and $160,000.
Average Student Loan Debt Pharmacy School
The American Association of Colleges of Pharmacy (AACP)’s 2021 survey of pharmacy school graduates found that about 85% of PharmD degree holders had to borrow money to get through school.
And the average student loan debt for pharmacy graduates, according to that same report, is $173,561.
There’s good news, though: The return on investment can be promising for pharmacists, whose median pay is around $128,710 per year, according to the Bureau of Labor Statistics.
What Can You Use a Pharmacy School Student Loan on?
There are several ways a student loan can be used to cover the cost of a pharmacy school education:
Tuition
As evidenced above, tuition is one of the biggest pharmacy school expenses that can be covered by a pharmacy school student loan. Since it can cost upwards of $200,000 to complete a pharmacy program, student loans can be helpful in covering that cost.
Fees
The term “fees” can sound a little bit elusive, and you typically see it thrown alongside the word “tuition.” The fees associated with attending pharmacy college vary based on the type of program the student attends, how many credit hours the student completes, and whether or not they’re an in-state or out-of-state student. In some cases, a pharmacy school may charge “comprehensive fees” that cover tuition, fees and room and board.
Books and Supplies
Pharmacy school student loans can be used to pay for books, supplies and other education-related expenses. To acquire the funds for books and supplies, pharmacy school student loans are first applied to a student’s tuition, required fees, and room and board bills. Then, any remaining funds get refunded to the borrower, either in the form of a check or through direct deposit. From there, the money can be used to pay for books and supplies.
Recommended: How to Pay for College Textbooks
Living Costs
Room and board is another expense that can be paid for with pharmacy school loans. Students can use their borrowed funds to pay for student housing — whether that’s in a dorm room or an off-campus apartment with roommates.
Pharmacy School Student Loans: Pros & Cons
Pros of Using Pharmacy School Student Loans
Cons of Using Pharmacy School Student Loans
Help people pay for pharmacy school when they don’t otherwise have the financial resources to do so.
Can be expensive to repay.
Open up more possibilities for the type of pharmacy school a person can attend, regardless of the cost.
Can put borrowers into substantial amounts of debt.
Cover a wide range of expenses — from tuition and fees to school supplies, room and board.
Borrowers might have to forego other financial goals to pay off pharmacy school student loans.
Paying off pharmacy school student loans can help build credit.
Late payments or defaulting on a pharmacy school student loan can damage credit.
Pros of Using a Pharmacy School Student Loan
Using a pharmacy school loan comes with a few pros:
Student Loans for Pharmacy School Can Be Forgiven
In terms of pharmacists student loan forgiveness, there are several options for newly graduated pharmacists who need some help paying off their pharmacy school loans.
Typically, these forgiveness programs are available on a state or federal level.
A few different pharmacy student loan forgiveness options include:
• Public Service Loan Forgiveness (PSLF)
• HRSA’s Faculty Loan Repayment Program
• National Institutes of Health Loan Repayment Programs
• Substance Use Disorder Workforce Loan Repayment Program
• State-based student loan forgiveness programs
Salary
As mentioned above, the median pay for a pharmacist is around $128,710 per year. For a pharmacy school graduate with student loan debt, this salary range could mean the difference between paying off loans and still having money left in the budget for living expenses, an emergency fund, and other types of savings.
Credit Score
Paying off pharmacy school student loans can be one way for a borrower to boost their credit score. When building credit history, making on-time payments is a prominent factor, which can potentially have a beneficial effect on a borrower’s credit score. Although their credit score could face a minor dip right after paying off the loan, it should subsequently level out and eventually rise.
Pharmacy school student loans appear as “installment loans” on a person’s credit report, which can diversify the types of credit they manage, thus potentially improving their “credit mix.” Which could also help enhance their credit score.
Cons of Using a Pharmacy School Student Loan
Pharmacy school student loans can also come with a few cons:
Debt
Since a pharmacy school loan is an installment loan, it’s considered a form of debt. As such, potential pharmacists are signing a long-term contract to repay a lender for the money they borrow. Should they find themselves on uneven financial ground, they may end up missing a payment or defaulting on the loan altogether, which could have a damaging effect on their credit report.
Late Payment Penalties
Many pharmacy school student loan lenders dole out fees for late payments. The terms of the loan are outlined by the lender before the borrower signs the agreement, but it’s important to read the fine print because loan servicers can charge a late payment penalty of up to 6% of the missed payment amount.
Interest Rates
Student loans for graduate and doctoral degrees like pharmacy school have some of the highest interest rates of any type of student loan.
Even federally subsidized Grad PLUS Loans have a fixed interest rate of 7.05% for the 2023-2024 school year, which could cause a pharmacy school student loan balance to climb high over time.
Recommended: Grad PLUS Loans, Explained
Average Interest Rates for Pharmacy School Student Loans
Pharmacy students have a variety of student loan options available to them. This table details the interest rate on different types of federal student loans that might be used to pay for a portion of pharmacy school.
Loan Type
Interest Rate for the 2023-2024 School Year
Direct Loans for Undergraduate Students
5.50%
Direct Loans for Graduate and Professional Students
7.05%
Direct PLUS Loans for Graduate Students
8.05%
Private student loans are another option that may help pharmacy students pay for their college education. The interest rates on private student loans are determined by the lender based on factors specific to the individual borrower, such as their credit and income history.
Paying for Pharmacy School
Before looking into an undergraduate student loan option or a graduate student loan option, potential pharmacists might be able to secure other sources of funding to help them pay for pharmacy school.
Scholarships
Scholarships are funds used to pay for undergraduate or graduate school that do not need to be repaid to the provider.
They can be awarded based on many different types of criteria, from grade point average (GPA) to athletic performance to acts of service, chosen field of study, and more. Scholarships might be offered by a college or university, organization, or institution.
For potential pharmacy school students, there are several available options for scholarships through their individual states and other providers. The American Association of Colleges of Pharmacy (AACP) is a great resource for finding a pharmacy school scholarship.
Grants
Unlike scholarships or loans, grants are sources of financial aid from colleges, universities, state/federal government, and other private or nonprofit organizations that do not generally need to be repaid.
The AACP breaks down grants and awards for health profession students and government subsidized grants for pharmacy school students on their website.
Recommended: The Differences Between Grants, Scholarships, and Loans
State Pharmacy School Loans
Some potential pharmacists may be eligible to participate in a state student loan program. The cost of attending a state pharmacy school will vary depending on whether or not the student lives in the same state as the school, so researching the accredited pharmacy programs by state can help them determine how much they’ll need to borrow.
Federal Pharmacy School Loans
The U.S. Department of Education offers Direct Subsidized and Unsubsidized Loans to undergraduate and graduate pharmacy school students. The school will determine the loan type(s) and amount a pharmacy school student can receive each academic year, based on information provided by the student on the Free Application for Federal Student Aid (FAFSA®) form.
PLUS Loans are another federal pharmacy school loan option, eligible to graduate or professional students through schools that participate in the federal Direct Loan Program.
Recommended: Types of Federal Student Loans
Private Pharmacy School Loans
A private student loan is another way for students to pay for pharmacy school. When comparing private student loans vs. federal student loans, it’s important to note that because private loans are not associated with the federal government, interest rates, repayment terms. Benefits also vary depending on the lender. For these reasons, private student loans are considered an option only after all other financing sources have been exhausted.
When applying for a private pharmacy school loan, a lender will usually review the borrower’s credit score and financial history, among other factors.
Private pharmacy school student loans can help bridge the gap between other payment options like the ones listed above, and give potential pharmacists the opportunity to shop around for the option that works best for them.
Income-Driven Repayment Plans
Income-driven repayment plans in particular help borrowers qualify for lower monthly payments on their pharmacy school loans if their total debt at graduation exceeds their annual income.
Here are the four income-driven repayment plans available for federal student loans:
• Income-Based Repayment (IBR
• Pay As You Earn (PAYE)
• Revised Pay As You Earn (REPAYE)
• Income-Contingent Repayment (ICR)
The Takeaway
Nearly 85% of pharmacy school graduates have student loans, according to the AACP. Pharmacy school loans can be used to pay for tuition and fees, living expenses, and supplies like books or required lab equipment. Federal student loans can be used in combination with any scholarships and grants the student may qualify for. If you find yourself still looking for a way to pay for your pharmacy school education after exhausting scholarships, grants, and federal student loans, a private student loan option might be an option to consider.
With SoFi’s private student loans, you get a six-month grace period post-graduation before you start thinking about repayment. Interested applicants can find out their rate in just a few minutes.
Learn more about borrowing a SoFi private student loan.
FAQ
How long does it take to pay off pharmacy school loans?
Depending on the type of pharmacy school loan you take out (private vs. federal) and when the funds were distributed, it can take between five and 30 years to repay a pharmacy school student loan.
How can I pay for pharmacy school?
There are several ways to pay for pharmacy school, including federal student loans, private pharmacy school loans, scholarships, grants, and personal savings.
What is the average student loan debt for pharmacy school?
According to the American Association of Colleges of Pharmacy, the average student loan debt for pharmacy graduates is $173,561.
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Inside: Looking for the best care packages for college students? Look no further! This guide will teach you everything you need to know about choosing the right gifts and packing a care package that will make your student feel at home during their time away.
It’s that time of year again! Time to send your college student a care package. But what should you include?
We’ve got you covered with this comprehensive list of the best care packages for college students.
From food and snacks to study aids and dorm decor, we’ve got ideas for every type of student.
This year, I seem to know so many parents sending off their college students.
So whether your child is homesick or just needs a little pick-me-up, check out our list of the best care packages for college students.
What is a Care Package?
A care package is a heartfelt bundle filled with handpicked items, designed to uplift the spirits of the recipient.
A care package for a college student is a curated box filled with various items such as food, products, or novelty items, tailored to their interests, to remind them they’re loved and provide them with needed or desired items while they’re away from home.
Nonetheless, a care package can be a wonderful surprise!
What goes in a care package for a college student?
Who says that college life has to be tough?
Show your college-bound kid you’re thinking of them with an amazing care package! Here’s how:
Pamper them with toiletries like soap, body scrub, or dry shampoo. It’s practicality meeting indulgence.
Include favorite snacks like popcorn, pretzels, candies, chips, or nuts—because nothing beats study stress like mouthfuls of favorite munchies!
Throw in souvenirs from your hometown because nostalgia is a comfort blanket away from home.
Don’t forget a gift card or two. It’s the little ticket to a happy spree when the budget runs low.
And finally, a heartfelt, handwritten note to remind them they’re loved, even from miles away.
In every box, you’re not just bringing joy to your college kid, you’re sending them love and comfort!
Why Send A Care Package To A College Student?
1. A Gift of Sustenance and Comfort 2. A Way to Express Love and Support 3. A Means to Introduce New Things 4. A Way to Help College Students Cope with Stress 5. A Resource for Essential Kitchen Items 6. A Means to Stay Connected 7. A Way to Provide a Mood Booster 8. A Tool to Help College Students Transition into Life Indoors 9. A Way to Give Money 10. A Gift That Can Help College Students Get Ahead
What are some care package ideas?
Care packages are personalized boxes filled with essentials, comforting items, or little luxuries that can offer solace, promote self-care, or give a delightful surprise.
Here are some ideas to get the creative juices flowing!
Imagine delivering a box packed with their favorite homemade goodies, essential school supplies, novel books, or even a themed package for that upcoming stressful finals week or just because!
Unbox this opportunity and read on to discover unique ideas for designing amazing care packages. Excite a college student today with this heartfelt gesture!
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What item should every care package include?
Creating a care package can be a delightful way to demonstrate your care and thoughtfulness. It combines a mixture of practical items, fun surprises, and often much-needed essentials.
What goes into each package can vary greatly, but a gift card is always a must!
Care Packages Themes for College Students
Choosing a theme for a care package can help streamline the process and reduce the stress of deciding what to include.
Themes could be traditional, humorous, or catered towards particular interests or events, such as a holiday-themed box, an orange-colored items package to signify the end of exams or a coffee-themed care package for those who love a good brew.
Regardless of the theme, here are a few items that should ideally be included in every care package:
Self-Care Items: These can include items like face masks or beauty products, scented candles, and relaxing bath products, among others. They offer the recipient the luxury of self-pampering.
Comfort Items: Usually, soft items such as socks, blankets, or even simple things like their favorite tea or coffee can provide comfort.
Snacks & Treats: These are a must-have. Include their favorite bites or homemade goods if possible.
Drinks: Depending on the recipient’s preference, you can include a variety of drinks, like coffee, tea, or hot chocolate.
Fun Things: Small games, coloring books, or novels can serve to reduce stress and provide entertainment.
Personal Care: Essential items such as toiletries or grooming products are always useful.
Cleaning Supplies: Especially for those away from home, cleaning supplies can be handy.
School Supplies or Work Essentials: Depending on the recipient’s needs, this could include notebooks, pens, sticky notes, etc.
Personal Safety Devices: Consider adding items like a mini first aid kit, a personal alarm, or a safety whistle.
Other Useful Things: Depending on the recipient’s interests, you could add items like a new book, a special photo, study aids, or sports gear.
Regardless of what you choose to include, the most important aspect of a care package is that it conveys love and care to the recipient.
Make sure you time sending your package well, and learn what time do Amazon packages arrive.
Best Care Packages for College Students
College students, often away from home for the first time, can sometimes struggle with homesickness or stress.
One of the most cherished remedies for these feelings is a thoughtful care package from home. It is an amazing way to remind them they’re loved and missed, bridging the gap between home and school.
But what really makes the best care package?
One that aligns with their interests, meets their fundamental needs and contains a surprise or two for fun.
A care package can boost their morale, make them feel less homesick, and get them through challenging times. It’s not just about what’s in the package, it’s about the thought and care that goes into it.
Here is a list to fill your care package with:
Food & Drinks:
1. Snacks: College students need fuel for their late-night study sessions. A variety of healthy snacks can give them that energy boost they need.
2. Instant coffee or tea bags: For caffeinated moments without needing to leave their dorm room.
3. Homemade Cookies or Baked Goods: Nothing says ‘care’ like homemade treats.
4. Specialty Coffees: For the coffee-lover student. Because it serves as an essential tool for late-night study sessions, helping students remain awake and energized.
5. Spirulina Powder: A superfood that’s great for a health boost.
6. Granola Bars or Oatmeal: Quick and easy to make, these are ideal for those mornings when students are running late for their classes.
7. Sugar-free chewing gum: Helps to maintain focus while studying.
8. Recipe Books: For the college student who needs help learning to cook. Even better create your own digital recipe book to pass along your family favorites!
9. Water Bottle: A reusable water bottle serves both as a health and environment-friendly gift.
10. English Breakfast Tea: This can provide a comforting, hot beverage that is easy to make in a dorm room. This electric tea kettle would be a special treat!
11. Hot Sauce: A versatile condiment like hot sauce can spice up drab, repetitive cafeteria meals.
12. Snacks & Munchies: Items like popcorn and pretzels are perfect for late-night cravings or for sharing with roommates.
13. Treats: Candies, chips, cookies, marshmallows, and nuts give students a sweet or savory option for a quick snack between classes.
14. Healthy items: Vitamins are great to keep students healthy, especially during finals when stress levels are high and sleep is compromised.
15. Fondue Set: A fun treat and a good reason to invite friends over.
Besides these food items, it would also be wonderful to include a few gift cards for local eateries or popular chains like Starbucks to give students the chance to have a meal or two outside the college cafeteria.
Self Care & Pampering:
16. Facial Masks: A fun and relaxing self-care item.
17. Natural Skin Care Products: To ensure their skin stays healthy too.
18. Cozy blanket: For those chilly nights in the dorm.
19. Candles: especially battery-powered ones, offer a relaxing ambiance without posing a potential fire hazard, making them ideal for dorms.
20. Spa Items: Think along the lines of bath bombs, Epsom salts, body lotion
21. Sheet Masks: this popular DIY spa at-home item is a must!
22. Essential Oils: These are needed as they offer a calming and uplifting aroma that can alleviate stress and contribute to an overall sense of well-being, especially in high-stress environments like colleges or workplaces.
23. Nail Care Kit: specifically items to do gel manicures at home. This is something I love to do myself!
24. Sleep Mask: To ensure a good night’s sleep.
25. Cute or neutral cozy socks: Socks provide warmth and comfort, helping individuals relax after a long day of classes or studying.
26. Shower Massager: A shower massager can provide much-needed stress relief after a day filled with classes, activities, and studying.
27. Scalp Massager: This can be an excellent tool for relaxation and stress relief, making it a perfect inclusion for a college beginning or the exam period.
28. Mini First Aid Kit: Every student should have a basic first aid kit.
To Get Moving (Health & Fitness):
29. Sports Equipment: For some physical activity.
30. Bluetooth Speaker: For listening to music or watching movies with friends.
31. Yoga Mat: It’s crucial to note that a yoga mat plays a significant role in providing comfort, reducing injury, and enhancing concentration during workouts.
32. Running Shoes: Running is one of the easiest ways to stay active. Or maybe to replace an old set of shoes.
33. Fitness resistance bands: These bands are perfect for incorporating into a student’s fitness routine, keeping them in shape even with their busy schedule.
Artsy Or Creative:
34. Coloring Book and Colored Pencils: A relaxing way to take study breaks. Or try this backward coloring book.
35. Colored Pencils: These complement the coloring books perfectly.
36. Notebooks and Stationary: Artists and writers would appreciate sets of beautiful stationery.
37. Origami Paper: tap into their creativity by providing a relaxing and enjoyable pastime that can help alleviate the stresses of academic life.
38. DIY Crafts: Handmade items for a personal touch.
39. Art Supplies: If they have an artistic side, new supplies can help fuel their creativity.
Mindfulness:
40. Stress Balls: Perfect for stressful exam periods. These are my favorite item on my desk!
41. Letters or Notes of Encouragement: Personal notes to show your love and support.
42. A Self-Care Journal: Helps to promote mindfulness and wellbeing.
43. An Inspirational Book: Can provide motivation and comfort.
44. Fidget Toy: Great for stress relief and concentration.
45. A calming lavender scented candle: This can help create a soothing environment, perfect for stress relief after a long day of lectures.
46. Zen Garden: This mini-sandbox can foster a bit of creativity and provide a mindless distraction from overwhelming studies.
47. Meditation guidebook: This can introduce a beginner to effective meditation techniques and potential benefits for mindfulness.
48. Affirmation cards: Daily positivity prompts can boost mood, and encourage a positive mindset.
49. White noise machine: This can provide calming background noise, assisting in good quality sleep and fostering mental well-being.
50. Weighted blanket: Proven to stimulate serotonin production, this blanket can increase feelings of calm and aid in better sleep.
51. Gratitude journal: This promotes the daily practice of noting down things one is grateful for, fostering a positive mindset, and reducing stress.
52. Mini Buddha Board: With this, they can paint with water and watch it slowly evaporate, reminding them of the impermanence of life’s stressors.
For School:
53. Portable Charger: No student wants to run out of battery while on the go.
54. Noise-Canceling Headphones: A fantastic tool that can help students study in peace, even in a noisy dorm.
55. iPhone/Android Charging Cord: An extra charging cord can be a lifesaver for busy students.
56. Planner: Helps students keep track of their assignments and plans. Don’t forget these planner stickers.
57. USB Flash Drive: For backing up important assignments and projects.
58. Study Supplies: Flashcards, highlighters, sticky notes, and more.
59. Stickers: These can be used to decorate their laptops, notebooks, or other personal items, adding a fun and creative element.
For Fun:
60. Birthday decorations: For a surprise birthday celebration.
61. Flying Butterflies out of the Box: This is one of my favorites! The butterflies fly out of the box when opened! Very easy to set up too.
62. Movie Night Pack: A collection of films, popcorn, and candy for a sweet night in.
63. Mini Board Games: Something fun they can do during their free time.
64. Board Game or Playing Cards: Fun games to play with friends during downtime.
65. Funny Socks: Just to put a smile on their faces.
66. “Orange you glad exams are almost over?” care package: A box full of orange-colored items will not only be visually striking but will also offer a light-hearted joke to help reduce exam stress.
To Help Their Budget:
67. Wallet or Money Clip: To keep their money and ID safe.
68. Budget Binder: make sure they are starting out right! Here are the best budget binders.
69. Laundry Detergent Pods: This easy-to-carry, mess-free laundry solution is perfect for college students.
70. Hygiene Products: Essential toiletries like toothpaste, soap, shampoo, and conditioner can save them a trip to the store.
71. Extra set of Sheets: Comes in handy during laundry day.
72. Prepaid Visa Gift Cards: These can be for anything from their favorite stores, food places or for movie tickets.
73. CASH: Check out these money gift ideas on ways to package it.
74. Money Cake with Cake: These are extremely popular with the recipient.
Maybe it is a good reminder for them to find remote jobs for college students.
Nostalgia:
75. A DIY Scrapbook: A place to store all of your pictures and mementos.
76. Stuffed Animal: For comforting cuddles on lonely nights.
77. Postcards from Home: Reminds them of their roots while away.
78. Cute photo frames: For them to display their favorite memories.
79. Personalized Keychain: To carry a piece of home with them at all times.
How to Choose the Right Care Package for a College Student
Transitioning to college life is notoriously challenging for students.
Tackling the academic load, juggling social responsibilities, and handling homesickness can be overwhelming. That’s where a thoughtful care package comes in as a ray of hope, bringing a taste of home, a load of love, and a boost of morale.
While choosing the ideal care package, consider these critical attributes:
Personalization: Pick items aligning with their tastes and interests. The more personal, the more cherished.
Versatility: Include a variety of items, from fun snacks to useful goods. Variety is the spice of life.
Affordability: There’s no need for a high budget. Thoughtfulness doesn’t need to be expensive.
Thematic elements: Consider packages focused on upcoming holidays or exam seasons for added relevance. The more timely, the more needed.
Convenience: Prioritize products that save your student time and energy. The simpler, the better.
Remember, these packages are powerful messages of love and support. Choose wisely.
When to Send Care Packages for College Students
One of the most fitting times to send a college student a care package is at the beginning of the freshman year when they are trying to adjust to their new environment.
However, these thoughtful packages can be sent at any time throughout their college journey to remind them that they are missed and cared for back home.
Fall
Thanksgiving
Christmas
Valentine’s Day
Easter
Finals
Birthday
Or any other holiday!
Especially during stressful periods, like exam season, a care package can be a well-appreciated and timely morale booster.
Tips for Sending a Care Package to a College Student
1. Consider the Student’s Needs
Do you puzzle over what to put in a care package for your college student? You’re not alone.
Many parents struggle with creating a meaningful gift that caters to their child’s actual needs.
The key is convenience and usefulness—factors often overlooked in the thrill of care package creation. Let’s transform your approach.
Tailoring your package to their needs ensures your thoughtful gift becomes a practical blessing in their hectic college life.
2. Consider the Budget
Overspending on care packages for your college student can shock your wallet. Just like trying to figure out how much to give for high school graduation.
The wrong box size could lead to needless extras and unexpectedly high shipping costs. Thankfully, you can easily drop ship the items with Amazon Prime.
Also, think about how many times per year you plan to send a care package. That way you can spread out the fun throughout the year.
This is especially true if you want to know how to pay for college without loans.
3. Email or Call the Student to Find Out What They Need
Don’t risk sending unneeded items to your college student that end up wasting space and money.
Imagine the disappointment when they open the package to find redundant or unnecessary supplies.
But there’s an easy fix! Before assembling a care package, make a quick call or send an email asking what they actually need. This simple step ensures your thoughtful gesture aligns perfectly with their requirements.
Remember, it’s about sending useful items that your student appreciates and utilizes – making your effort truly count!
FAQ
Feeling homesick is a common challenge for many college students. Their new environment can seem excitingly novel but also distressingly foreign. But you can help alleviate this uncomfortable feeling by sending thoughtful, comforting care packages.
Snacks from Home: Local snacks can evoke a sense of nostalgia, making them feel closer to home.
Personal Mementos: Tokens like pictures of family, posters of hometown landscapes, or preserved local flowers help create a familiar space in their dormitory.
Money: An unexpected cash bonus is not just practical, but also a mood booster. Who doesn’t love a surprise windfall?
Heartfelt Note/Card: A message of love and encouragement can provide emotional resiliency in distressing times.
Remember, your care packages remind them that they’re loved and thought of, even miles away.
Sending care packages to college students is a thoughtful gesture that can be done at any frequency you prefer.
For example, once a quarter might be a good rule to ensure your student receives regular reminders of your love and support.
Supplements around finals, or during difficult times, are always appreciated. Feel free to adjust the frequency based on your student’s needs and preferences.
Sending a college girl a care package is a great way to remind her of home and boost her spirits. And typically, girls want fun things specific to them.
Here are the top 5 items to include:
Hair Accessories: Such as colorful hair ties or headbands to add a fun touch to her looks.
Socks: Choose cozy and cute ones, they’ll be perfect for chilly dorm nights.
Lip Balm: This is essential for avoiding chapped lips, consider tinted options for a dual-purpose product.
Fun Study Supplies: Including unique pens or sticky notes as they can make studying a bit more entertaining.
Face Masks: They offer a chance for self-care and relaxation, especially for those stress-induced skin flare-ups.
Time to Pack Those College Care Packages!
Transitioning to college life can be both exciting and overwhelming. Often, college students find themselves daunted by academic rigors, social pressure, and the unique environment of living away from home.
But what if there was a simple way to overcome these challenges?
Enter: the care package.
With a little bit of planning, you can easily put together a care package that will make your student smile.
So what are you waiting for? Get started today!
Know someone else that needs this, too? Then, please share!!
Just days after Houston was named the 4th best city in the United States for women in technology by SmartAsset, Parkway Property Investments lands more technology tenants at fabulous Greenway Plaza. The Houston Chronicle reported AI leader ThoughtTrace, the engineering company DMC, IoT provider Detechtion Technologies, and seven other major technology leaders as tenants. Despite being shunned by Amazon, the Texas energy town could emerge as a glowing tech hub.
Greenway Plaza is a 52-acre master-planned, mixed-use development of 11 buildings and almost 5 million square feet of office space in the center of Houston business. The development includes on- site amenities like fine dining, an underground food court with over 16 options, multiple fitness facilities, three full service banking centers, and unlimited conferencing facilities. The center also has full-service automotive care, commercial printing and graphics services, and a long list of other amenities for tenants and their clients.
Rounding out the list of new tenants were Nuveen Real Estate, Goldman Sachs Asset Management Private Real Estate, Liberty Lift Solution, Texas Installs, NAI Partners’ Investment Fund, TriArc Properties, and SLI Group.
Meanwhile, Houston as a tech professional magnet is not only reflected in the migration of technology firms moving to the city center. The SmartAsset study mentioned above showed that Houston’s tech pay makes the city a standout for men and women. For female tech workers, the usual disparity in pay between men and women is almost non-existent. With a ratio of 99 percent, Houston’s wage gap when it comes to tech jobs ranked the city No. 3 for the smallest wage gap among major U.S. cities.
A long-time energy hub, Houston, is in the process of transitioning to become more of a tech hub through an Innovation Corridor anchored by physical structures being rebooted to push the city forward. Some of the properties being reworked are the 1939 Sears department store at 4201 Main, the former Exxon Mobil building at 800 Bell; and the former KBR complex at the East End.
Even though the city was recently shunned by a “no vote” for Amazon’s HQ2, the city is seeing healthy growth in this sector. The news that digital payments leader Bill.com is moving to the Westchase area of Houston illustrates this too. In addition, the coming Green New Deal from Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey may just be a cloud with a silver lining for Houston of the energy sector can rethink renewable. Whether it’s the “Trump” energy first way or the opposing “Green Deal” – Houston planners only have to tool up for “next.”
Evidence of such forward thinking comes in the form of a report by Robert Vaughn, the Houston metro market manager for Robert Half Technology and The Creative Group. According to Vaughn, Houston actually leads the U.S. in tech job hiring plans for 2019. And despite the fact that Austin is currently a more attractive tech startup hub, Houston has huge advantages thanks to its population and age distribution- With the right incentives by city decision makers, the city could take off to match New York as in the next couple of years. And this, of course, would be a shot in the arm for every Houston real estate metric. Stay tuned, we’ll do more in-depth coverage soon.
Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.
90 percent of the real estate professionals reading this report will understand that the leveraging of property technology (PropTech) to research, buy, sell and manage real estate, is the future. This report is to help the other 10 percent and to validate what most industry professionals already know.
The PropTech 101
Before diving into the deep end of PropTech investing, it’s important
to define what this new wave of PropTech incorporates. Advancements in the way
real estate professionals process data are not new, you see. However, the
breaking technologies that have powered up almost all business are set to take off toward a new paradigm. Artificial
intelligence (AI), Big Data analytics, Virtual Reality, and Augmented Reality, and more advanced forms of computer-aided
design (CAD) are the main areas of the innovative shift. 20 years ago such
technologies were considered science fiction, but today PropTech startups are
addressing everything from fixing a tenant’s leaking faucet to industry
insights and more. Make no mistake, PropTech is not only here, but it’s also
becoming as indispensable as the telephone. If you are among the 10 percent, who think your real estate related
business can operate without these new technologies, imagine running your store
with no phone.
PropTech Investment Barometer
The latest Global PropTech Confidence Index published by New York VC
firm MetaProp reveals the robustness of the investor segment. The report also
frames the overall maturity of the startup ecosystem from data gleaned from
over 500 investors across 1,600 startups. The twice-per-year index also shows
that 60% of PropTech investors surveyed plan to invest even more in 2019. With
2018 seeing the most investment ever, this vote of confidence is a significant
litmus test. Even with a mixed bag of geo-policy and economic factors weighing
on investors, confidence in the segment still runs very high. There are several
reasons for this including the quality of investment pitches VC receive. The
“maturity” of innovation is reflective of the overall quality advancements
innovators are creating. Take so-called “smart buildings,” as a for instance.
In a report for Forbes, real estate innovator, and entrepreneur,
Angelica Krystle Donati predicted coming investments in segments aligned with
“direct synergies on the concept of “smart cities,” such as AI, IoT, cybersecurity, mobility, and e-commerce.” Her
prediction is in line with the more than one-third of major investors who feel
smart building tech will take off. The PropTech innovations are like a snowball
set to roll over and snatch up anything in their path. The investment landscape
mirrors what happened in the mid-2000s with internet technologies and phones.
Maturing Globally
Then there is the revelation that PropTech sector is maturing. This
is best illustrated by the fact there is a sharp division in winners and losers
in the space. Just as was the case in the Web 2.0 era, the cream of innovation
and value is rising to the top, while the rest end up in what became known as
“the dead pool” of technology startups. The best become profitable, and the
useless, underfunded, or ill-planned startups end up bankrupt. In such a
metamorphosis we can expect these big winners to make the next logical step –
to become international companies.
News from Italian proptech startup Casavo is a subtle indicator that
PropTech winners will scale globally. The with the goal of decreasing the time
it takes to sell a property just snagged a €7 million Series A round from
Berlin-based Project A Ventures, Picus Capital, 360 Capital Partners, Kervis
Asset Management, Boost Heroes, alongside Marco Pescarmona and Rancilio Cube.
At its core, Casava creates a simplified transaction process leveraging the Instant Buyer
(iBuyer) model in combination with an s automated valuation engine. The
valuation/offer process is greatly streamlined, with the seller receiving a
full cash payment with a month. Casavo’s
automated valuation engine factors in 70 plus variables to provide the seller
with a fair market value for their property – and a buy offer is presented.
There are many other examples.
Now, let’s say the
Casavo model takes off across Europe. This will create a lot of competition,
and things like the negative aspects of the iBuyer model will squeeze Casava
and other early adopters. What will fill the value void? This is the big
question. You see, the downside of iBuyer models are the losses suffered
on account of commissions and discounts built in. The quick and easy sale is at
the expense of the seller and not the agents or intermediaries. Here’s where
the competition comes in, a competition that will be won by big players like
Zillow and the other U.S. players. The end of the story will be innovators like
Casavo innovating and finding an exit runway with a huge profit, or failing to
innovate and going bankrupt.
Invest in Collaboration
Modernizing the transaction process technologies like AI, AR, CAD,
and VR are allowing potential buyers to visualize without even visiting the
property. The homebuyer can even us CAD and VR alongside Big Data analytics to
check demographics, tax incentives, neighborhood statistics, and local
amenities without ever leaving their reclining living room chair. Agents can
use intelligent machines and big data to streamline
much of the traditional transaction process further, and even match
investors to a property type, etc. The list of potential PropTech uses is as
long as the list of tasks agents, buyers, and sellers have in front of them. At
the end of the day, PropTech relieves many pain points encountered by both real
estate professionals and potential buyers – and investors know this. That’s why
the investing trend is the barometer for PropTech adaptors.
Finally, this report from KPMG in 2017
reveals how real estate professionals can integrate PropTech and bride the gap
between the “built” and the digital environment. The research confirms that Big
Data and analytics will reap the biggest rewards for adopters, but the IoT that
will power smart buildings comes in second, followed by AI innovations. Those
surveyed also validate that streamlined process and improved decision making
are at the top of the list of benefits real estate businesses will receive from
these innovative technologies. What most striking about this 2017 study is the
fact that collaborative PropTech ventures are the key to success in adaptation.
What this means is, “build your own” solutions will no longer work, not even
for the huge players like Zillow. In the end, a collaboration between real
estate and technology players will be the future. Almost half of the leading
real estate decision makers surveyed by said they would collaborate with a new
or existing supplier of PropTech.
Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.
You’ve heard how awesome Roth IRAs are and how starting one now can mean big bucks when you’re older. You’ve even done some research so you have a vague idea of how a Roth IRA works. Now what? How do you actually open a Roth IRA for yourself?
The good news is that it’s surprisingly easy to set up a retirement account and begin investing in your future. Here’s what to do…
How to open a Roth IRA
Decide where to open your Roth IRA account. Financial services providers such as Vanguard or Fidelity will have IRA products.
Gather your information.
Transfer money into your account.
Set up an automatic investment plan.
1. Where to Open a Roth IRA
One of the reasons people fret about opening a Roth IRA is because there are so many financial institutions offering IRA products. It’s important to search for a company that suits your needs, but how do you evaluate each company’s strengths and weaknesses?
Consider reputable Advice
If you already have an investment advisor, ask her for recommendations, but look at other options too. Some banks and credit unions also offer individual retirement accounts. My credit union, for example, has Roth accounts but they’re limited to certificates of deposit at 1.50%.
2. Gather Your Information
Gather all your information in one location when you are ready to begin. Most firms provide online applications, but some still require that you download forms and mail or fax them to the company. (If you’re opening an IRA through a brick-and-mortar bank or broker, take this information with you.)
From this point, it’s just a matter of answering simple questions. The entire process should take about an hour of uninterrupted time. (Actually, you’ll probably only need 15 minutes, but allocate more time just to be safe.) Before you begin the application, make sure you have all the documents listed below:
Here’s What You Need to Open an Account
Your social security number.
Your driver’s license or other photo I.D. like a passport.
Your bank account information — your bank’s routing number and your bank account number.
Your employment information — your employer’s name and address.
Some money. (Depending on where you choose to open your IRA, you may need $25 or as much as $3,000.)
Note: For each beneficiary you choose, you will need to supply their name, social security number, and date of birth as well.
3. Transfer Money Into Your Account
Once you’ve completed the application process, you will be asked to transfer money to your account. This money will probably earn interest in a money market fund until you choose an investment. [In Part 4 of this series, we’ll discuss good investment options for Roth IRAs.]
4. Set Up an Automatic Investment Plan.
I’m a big fan of automatic investment plans. Most of the companies mentioned later in this article offer some sort of program that will pull money from your bank account every month to invest in the stocks or mutual funds you designate. By setting aside $50 or $100 or $500 in this way, saving becomes a habit. You don’t notice the money is missing. It’s a regular expense that just becomes incorporated into your budget.
A final note: Opening a new account usually is quick and simple. However, be aware that it may take a few weeks before you can start trading. That’s because they will wait for checks you send to properly clear the bank.
Ongoing IRA account transactions at banks, brokerages or mutual fund families happen quickly, but they all take some time to activate a new account. In other words, don’t become impatient if you can’t buy things right away.
Related >> IRA Contribution Limits, Deadlines and Deductions
Before You Invest
There are two things you should take care of before opening a Roth IRA:
Tuck away at least $1,000 in a savings account for emergencies.
Pay off your credit card debt. At the very least, make a significant dent in your debt and have a plan for its elimination. (I chronicled my choice between debt and savings here.)
Related >> Which online high-yield savings account & money market is best?
Related >> Real-life choices: Retirement savings vs. debt reduction
An Excellent Way to Begin Your Retirement Savings
When you’ve finished paying off your debt, take the amount you were using for debt reduction each month and, instead of spending it, stick it into a retirement account.
You’ve already developed the habit of using the money to improve your financial life. This is just another way to do it!
Consider Taking a More Active Role
If you’re willing to make some decisions on your own, you can open a self-directed IRA through a mutual fund company or through an online discount brokerage.
In general, you have two choices:
A mutual fund family, like Vanguard or Fidelity, which will open an IRA account for free and sell you their funds for free. The benefit is that you pay no commissions, but the downside is you can only buy the funds they sell.
A brokerage, which allows you to pick any index fund, managed mutual fund, or individual stocks and/or bonds but may charge a commission on each trade. The major online brokerages (E-Trade, TD Ameritrade, etc.) usually have no fees to open an IRA but will charge around $10 or less per transaction for most transactions.
How to Evaluate a Roth IRA provider
Is there a minimum initial investment?
Does the company offer automatic contributions?
Are there minimum contributions?
What types of fees are assessed to the account?
What investment options are available — stocks? mutual funds? real estate?
Is it possible to download statements automatically to your money management program?
How reputable is the provider?
Mutual Fund Family
If you decide to go with a mutual fund family, many people recommend starting at one of the big three Vanguard, Fidelity, or T. Rowe Price because of the large variety of managed and indexed funds they offer. If mutual funds (indexed or managed) are the cornerstone of your investment strategy, it makes the most sense to go with one of the major fund families.
For those focusing on index funds, Vanguard is the most logical choice, because they specialize in index funds and offer the widest variety. They actually created index funds to begin with, and their costs tend to be the lowest. Click here to open a Roth IRA at Vanguard.
For those who prefer managed mutual funds over index funds, your best approach is to go to a review site like Morningstar or Zacks to see which of the funds that pursue what you have in mind (e.g., foreign stocks, domestic bonds, etc.) perform the best. Click here to open a Roth IRA with Fidelity.
All the major mutual fund families make it easy to open no-cost accounts. Simply go to their website and follow their instructions. But there are still other places that you can open a Roth IRA.
Click here to open an IRA at T. Rowe Price.
Discount Brokers
Discount brokers appeal to many people because they have a low barrier to entry. They offer lower fees than traditional brokers because they don’t have research departments and they don’t offer investment advice. They act purely as middlemen for trading in the market.
The primary benefit of using a broker is that you can pick from many different mutual funds or, if you prefer, individual stocks or bonds.
How to Bridge a Gap
Discount brokers are a good option if you are short on cash. Most of them will also offer a cash account, similar to a savings account. You can use that account to accumulate the money necessary to meet the minimum initial deposit.
Online discount brokers want your IRA business and, consequently, they make it very easy to open an account. You can compare their fine print details, but for the most part, their pricing is very similar.
The major players in the discount brokerage space are E-Trade, Scottrade, and TD Ameritrade. Simply visit their home page and look for the link offering a no-cost IRA account. Some have minimum deposits of $500 or so; but if you commit to a monthly automated contribution, many will waive that requirement.
Don’t Delay Because of These Misconceptions
I always believed opening a retirement account was difficult, but that’s all there is to it really. The most difficult part is deciding where to open your account. Set aside an hour or two some Saturday morning to explore your options over a cup of coffee. With some research, you should be able to find a company and program that fits your place in life.
I also used to think, I don’t have money to invest. Last year I forced myself to find the time and the cash to open a Roth IRA, and I can say that it has been one of the best financial decisions I’ve ever made.
The GRS Introduction to Roth IRA Series
Understanding how important it is to get started saving for retirement, check out the rest of our Roth IRA series to learn about how to start your Roth IRA, which investments are best, and other general questions about these great accounts.
Part 1: The extraordinary power of compound interest Part 2: What is a Roth IRA and why should you care? Part 3: How to open a Roth IRA (and where to do it) Part 4: Which investments are best for a Roth IRA? Part 5: Questions and answers about Roth IRAs
High mortgages and stubbornly elevated home prices are worsening the housing affordability crisis. A first-time homebuyer must earn roughly $64,500 per year to afford the typical U.S. “starter” home, up 13% from a year ago, according to a new report from Redfin.
In June, the typical starter home sold for a record $243,000, up 2.1% from a year earlier and up more than 45% from before the pandemic. Average mortgage rates hit 6.7% in June, up from 5.5% the year before and just under 4% before the pandemic.
New listings of starter homes dropped 23% from a year earlier in June, the biggest drop since the start of the pandemic, the report found. Meanwhile, the total number of starter homes on the market is down 15%, also the biggest drop since the start of the pandemic.
As a result of the limited supply, still-rising prices and elevated mortgage rates, sales activity for starter homes has stifled. It dropped 17% year over year in June.
The cost of financing a median-priced U.S. home, assuming a 20% downpayment, rose 12.4% from June 2022, according to Realtor.com economic researcher Hannah Jones.
Meanwhile, average U.S. wages have risen 4.4% from a year ago and roughly 20% from before the pandemic. It is not enough to make up for the jump in monthly mortgage payments and higher home prices.
To compound matters, rents remain elevated too, applying additional pressure on already challenged prospective first-time homebuyers. The typical U.S. asking rent is just $24 shy of the $2,053 peak hit in 2022.
“Buyers searching for starter homes in today’s market are on a wild goose chase because in many parts of the country, there’s no such thing as a starter home anymore,” said Redfin Senior Economist Sheharyar Bokhari. “The most affordable homes for sale are no longer affordable to people with lower budgets due to the combination of rising prices and rising rates. That’s locking many Americans out of the housing market altogether, preventing them from building equity and ultimately building lasting wealth. People who are already homeowners are sitting pretty, comparatively, because most of them have benefited from home values soaring over the last few years. That could lead to the wealth gap in this country becoming even more drastic.”
San Francisco, Austin and Phoenix buck the trend
A homebuyer in San Francisco must earn $241,200 to afford the typical “starter” home, down 4.5% ($11,300) from a year earlier. Austin buyers must earn $92,000, down 3.3% year over year, and Phoenix buyers must earn $86,100, down about 1%.
Those are also the metros where prices of starter homes have declined most, with median sale prices down 13.3% to $910,000 in San Francisco, down 12.2% to $347,300 in Austin, and down 9.7% to $325,000 in Phoenix.
The housing markets in Austin and Phoenix have fallen back down to earth since the remote-work relocations craze stopped. High mortgage rates and scarce listings brought down home prices as well.
Florida is the state where the income necessary to buy a starter home has risen the most
The biggest uptick of the 50 most populous US metro goes to Fort Lauderdale, Florida. There, buyers need to earn $58,300 per year to purchase a $220,000 home, up 28% from a year earlier. Next comes Miami, where buyers need to earn $79,500 (up 24.8%) to afford the typical $300,000 starter home. Third is Newark, NJ, where buyers need $88,800 (up 21.1%) to afford a $335,000 home. The three metros also had the biggest starter-home price increases, with prices up 15.8% year over year, 13.2% and 9.8%, respectively.
Meanwhile, starter-home prices are down year over year in 13 metros, mostly expensive West Coast markets, with the next-biggest declines in San Jose, CA (-8.7% to $925,000), Sacramento, CA (-7.3% to $417,000) and Oakland, CA (-7.3% to $630,000).
Starter-home prices also dropped in Las Vegas, Seattle, Denver, Los Angeles, Portland, OR, Anaheim, CA, San Diego, Riverside, CA, Pittsburgh and Minneapolis. However, in those places, lower prices often don’t make up for higher mortgage rates.
More than one-third (36.6%) of the country’s starter homes were purchased in cash in May, down just slightly from the previous month’s decade-high and up from 35.2% a year earlier.
Real estate investors are buying up a sizable chunk of today’s affordable homes. A record 41% of investor purchases were small homes–those with 1,400 or fewer square feet–in the first quarter. That’s up from 37% a year earlier.
When it comes to making ends meet, many people are falling a bit short every month. A big part of that has to do with the fact that minimum wage hasn’t kept up with the rate of inflation – in the slightest bit. And because of that, a huge chunk of Americans are finding it harder and harder to bridge the gap.
Due to this fairly wide financial discrepancy, the market for cash advances has soared. In fact, an average of one out of every 50 Americans uses cash advances at least once a year. That’s huge! Especially so when you consider how many fees are normally tacked onto these payday advances.
Because of this ongoing financial crisis, I wanted to find some of the best cash advance apps with minimal to no fees to help you make it to your next payday a bit easier.
What’s Ahead:
Overview of the best cash advance apps
App
Amount you can withdraw
When you can withdraw
Fees
Earnin
$100
Once per pay cycle
Free
Empower
$25 to $250
Once per pay cycle
Subscriptions start at $8 per month
Dave
$100
Once until account is paid in full
$1 per month
Brigit
$250
Once per pay cycle
$10 per month
Chime
Full paycheck
2 days before normal payday with direct deposit
Free
MoneyLion
$250
Once per pay cycle
Free
Varo
Full paycheck
2 days before normal payday
Free
Earnin
Amount you can withdraw – $100.
When can you withdraw – Once per pay cycle.
Fees – Free.
Earnin was the first payroll advance app on the market, so it’s safe to say that it has been around awhile. Which means it has had time to grow and tweak its platform to serve people more effectively.
They are similar to Dave in that they will only allow you to take up to $100 cash advance per pay cycle. And, like Dave, they don’t charge you any fees or interest on this advance. Even though there is no fee for the service, they do have an option for you to add a tip to help keep the app running.
They also offer a few other great features on top of the standard cash advance option. Three of these include:
BalanceShield operates the same way that Dave does in that it will send you an alert when your account balance drops below a certain amount. When this happens they automatically deposit a $100 cash advance into your account to keep your account in the green.
Health Aid is a service to help get your medical bills reduced. You just have to submit a photo of the medical bill within the app and then Earnin will begin negotiating with the company to get your medical bill reduced. You can tip them whatever you feel inclined to once they finish the negotiation. Pretty cool!
Tip Jar is an in-app savings platform so that you can begin saving small amounts at a time towards larger goals.
As if these weren’t already three helpful bonuses, there is one more great addition to the Earnin platform. The Earnin app can be used as a shopping app to help you earn cash back. If you do your shopping within the app and pay with your Earnin account, you can get anywhere from 1% – 10% back on your purchases.
Empower
Amount you can withdraw –$25 to $250^.
When can you withdraw –Once per pay cycle. Eligibility to Cash Advance is updated automatically in the app.
Fees – Free for the first 14 days, and then $8 per month which gives access to all money management features in the app (including saving and budgeting to help you get out of the cycle of needing Cash Advance).
Empower is another extremely diverse app with Cash Advance options. You can sign up for the Empower Card which is interest bearing. Plus, there’s no overdraft fees and no minimums and you can get your paycheck up to two days early.*
Additionally, Empower has one of the most robust budgeting apps out there, akin to how Personal Capital works. When you set up the budgeting portion of the app, you have a plethora of options to help customize the budget for maximum effectiveness. These options can include:
Tracking spending in multiple categories.
Setting spending limits within specific categories.
Setting the frequency within specific categories as to how much you can spend at certain times.
Setting a weekly savings goal and using the AutoSave function to reach your savings target faster.
Once you have all of your budgeting categories, limits, spending, and AutoSave set up you are ready to go. And if you find yourself in a jam between paychecks, there is the option to get up to $250¹ in a Cash Advance with no late fees or interest. This will then be taken out of your next deposited paycheck and your budget reconfigured to help you get back on track.
Empower is a financial technology company, not a bank. Banking services provided by nbkc bank, Member FDIC.
Empower Disclosure – ^ Eligibility requirements apply. * Early access to paycheck deposit funds depends on the timing of the employer’s submission of deposits. Empower generally posts such deposits on the day they are received which may be up to 2 days earlier than the employer’s scheduled payment date. Cashback deals on Empower Card purchases, including categories, merchants, and percentages, will vary and must be selected in the app. Cashback will be applied automatically when the final transaction posts, which may be up to a week after the qualifying purchase.
Dave
Amount you can withdraw – $100.
When can you withdraw – Once until the account is paid in full.
Fees – $1 per month.
Dave is an app that creates an online checking account for you with the option of cash advances. Once the app sees that you might be close to overdrafting your account, they will send a notification to warn you.
At this point, you will have the option to take up to $100 cash advance against your next paycheck. If you decide to take the payday advance, they won’t charge you interest on anything you take. They also don’t require a credit check to implement the cash advance either.
While just that option alone is great, Dave has quite a few other perks to sweeten the pot. These include:
Building your credit history by automatically reporting rent payments to the credit bureaus.
No ATM fees at over 32,000 ATMs.
Automatic budgeting feature to help you get back on track and stay there.
Find a side hustle feature to help you earn extra cash.
And if those extra added bonuses don’t win you over, you can also earn credits to offset the monthly fee just by connecting your debit card.
Brigit
Amount you can withdraw – $250.
When can you withdraw – Once per pay cycle.
Fees – $10 per month.
Brigit is a payday advance app that has the most flexibility with their cash advances. You have the option to get a cash advance up to $250 per pay cycle.
Not only could you get a larger payday advance, but you can also file an extension on your advance up to three times. There are no penalties or fees to do this either.
However, Brigit doesn’t just allow everyone to apply for a cash advance. They have some fairly stringent barometers for determining whether you qualify for a payday advance. If you meet the following criteria, then you can apply for the cash advance option within the app:
Have an individual checking account that is at least 60 days old.
Must have a balance in your checking account at least two days after getting paid.
Must continually have an account balance of over $0.
Use your checking account almost daily.
Have at least three paychecks deposited from the same employer.
Have an average paycheck of at least $400.
Show at least $1,500 per month deposited from the same employer.
If you don’t meet the aforementioned criteria though, you can still use their varied budgeting tools to help you get your finances back on track.
Chime®
Amount you can withdraw – Full paycheck.
When can you withdraw – Two days before normal payday with direct deposit.3
Fees – Free.2
Chime is a little bit different than all of the other cash advance apps. This is due to the fact that it’s not actually geared towards cash advances. In fact, payday advances are a new product offering for them. Their area of focus has been more along the lines of creating a dynamic online mobile financial app product instead.
In addition to being free, their mobile financial app product has myriad additional options.2 When you have a Chime account, you will be able to:
Access over 60,000 ATMs.6
Receive banking alerts anytime there is a deposit or charge.
Select an automatic savings option out of every paycheck.1
Round up charges to put money into a savings account automatically.^
Turn off your debit card with one swipe if you notice suspicious activity.
These are perks that most brick-and-mortar banks don’t even think about offering. * Which makes Chime’s mobile platform one of the most robust out there. But, as an additional bonus, Chime will give you the option to take a cash advance. Sort of. Chime will deposit your paycheck as soon as your employer deposits it into your account. This is usually around two days earlier than you would normally get it.3 So instead of holding the funds, Chime is basically giving you a cash advance with your own money, for free. Gotta love this!
* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. ^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account. 1 Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account. 2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account. 3 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. 6 Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
MoneyLion
Amount you can withdraw – $250.
When can you withdraw – Once per pay cycle.
Fees – Free.
MoneyLion has the option to get one of the larger cash advances on the market, of up to $250. Should you need a payday advance, MoneyLion makes it very easy to get one through their app. When you log into their Instacash feature, you can choose how much money you need until your next payday.
But, MoneyLion doesn’t stop there. They have quite a few extra perks that most of the other cash advance app companies don’t have. Some of their most prominent features include:
Free credit monitoring.
Free checking account.
Access to over 55,000 ATMs for free.
Fraud protection with debit card lock.
Credit building loans.
They also have a cash back rewards program in the works to give you up to 12% back on purchases with your debit card. And, if you choose to go with their paid membership, then you get an additional option to help you invest. This investment fund has no management or trading fees and is fully managed, to help you begin planning for retirement.
Varo
Amount you can withdraw – Full paycheck.
When can you withdraw – Two days before normal pay day.
Fees – Free.
Varo is known for their live customer service. They want to ensure that you have all of your questions answered and their expert assistance at your fingertips.
Varo is another mobile banking platform with the capability to get you your paycheck deposited up to two days earlier. Which is similar to a cash advance, without the fees or having to pay anything back.
As an addition to an easy-to-use platform, they offer quite a few other features that make their app enticing. Some of these include:
Debit card with automatic locking capability.
No fee transfers between your Varo account and anyone else who has a Varo account.
Instant notifications when money goes in or out of your account.
Access to over 55,000 ATMs for free.
Capability to overdraw your account by $50 with no fees when using your debit card.
Deposit checks remotely using the Varo app.
Save Your Pay option lets you automatically put a certain amount of each paycheck into a Varo Savings Account.
Save Your Change options lets you round up every transaction from your checking account to the nearest dollar and deposits it into your Varo Savings Account.
Even if you don’t choose to use all of the options available to you, Varo has so many choices that it can be difficult to even know where to begin. And that is where their live customer service can really shine.
How I came up with this list
This list of cash advance apps was a bit more difficult to create than I originally thought. The primary reason is that there are so many companies adding this feature recently. A lot of the apps mentioned have been around for a while and have been focusing on other areas of personal finance.
But, with the realization that so many of us are barely making ends meet on a monthly basis, adding a payday advance option to their platform only increases their diversity. So, I wanted to find apps that had a wide variety of other options besides just the ability to take out a cash advance. The hope here is that any of these options will create a more robust app to help you along your financial journey and not charge any excess fees along the way.
What to watch out for with cash advances
Even if a cash advance sounds like it might be a good solution to your temporary financial cash flow issue, there are some things to watch out for.
Expensive fees
Many cash advances come with hefty fees attached to them. The companies mentioned in this article do not, but reading the fine print is extremely important before taking out any kind of loan. Some of these fees can range between $10 to 5% of the loan, depending on the cash advance and the servicer.
High APR’s
High APR’s are another thing to really be careful with. While none of these companies charge an APR to take a payday advance, most others on the market do. And sometimes they can charge an APR of up to 400%. That is just crazy!
Continual use
If the fees and the ridiculously high APR weren’t enough to make you stop in your tracks, there is one other thing to seriously consider. When you take a cash advance, your next paycheck is reduced by that amount. Plus any fees or APR that may be tacked on. When you do this, you are shorting your future self money you might need to make ends meet during the next pay period.
Therefore, once you take one cash advance, it can easily create a downward spiral in which you will have to continue to do so. When this happens, it makes it so much harder to ever get back on the right side of the ship.
Most important features of a cash advance
If you are considering a cash advance to help you bridge the gap until your next paycheck, there are a few very important features to consider before pulling the trigger.
The amount you can withdraw
The amount you are allowed to withdraw will not be the same across the board. The amount you have available as an option for a payday advance may be based on a multitude of differing criteria. The most common numbers are between $100 – $250 per pay period.
When you can take a cash advance
When you will be allowed to take a cash advance can also vary. Some companies will allow you to qualify for one per month, whereas others are okay with one per pay period.
Associated fees
The fees and APR can also vary by company. None of the companies mentioned in this article have any fees or APR’s associated with their cash advances. But, if you choose to go with another company for a cash advance, make sure to read all the fine print regarding potential fees before signing on the dotted line.
Repayment terms
Not all repayment terms are created equally either. Some companies, like Brigit, will let you extend your repayment deadline. But, most companies have a specific time period designated for the cash advance repayment. So you will need to ensure you will have the money in your account by that date in order to repay the loan in full.
Cash advance alternatives
While taking out a cash advance can really help you make it through to the next payday, it still might not be enough. When this happens, it might be time to consider taking out a personal loan.
There are many different options to consider when it comes to taking out a personal loan. However, two of the best options are Credible and LendingTree.
Fiona
Fiona is a loan provider marketplace that offers many of your loan options all in one place. Fiona makes the loan finding process as easy as possible. All you need to fill out is a simple form that takes a matter of seconds, and you’ll see a list of some of the most reputable lenders with their offers perfectly tailored to your needs.
You can enter any amount you’re looking for and let Fiona know what your credit score is (they won’t run a hard pull on your score), and they’ll eliminated any lenders you may not qualify for.
Credible
Credible is another online marketplace for loan servicers to connect with consumers needing a wide variety of loans. These loans can include personal loans also. It is a quick and easy process to begin looking at the marketplace. And once you find a lender, or two, who have a personal loan with terms you can manage financially, then you will be connected to them through the Credible platform to complete the loan process.
Credible Credit Disclosure – Requesting prequalified rates on Credible is free and doesn’t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.
LendingTree
LendingTree is one of the largest online marketplaces out there, so they have a ton of product offerings in any category. Currently, they have quite a few different loan offerings ranging from $1,000 – $50,000 and 5.95% – 34.98%. This is a pretty widespread, so chances are they will have a personal loan product that will work for you.
The biggest thing to remember when considering a personal loan on top of a cash advance is that you will only be perpetuating the cycle and can keep yourself in debt longer. So, if there is any other way, such as side hustles, to bridge the gap, then check into those options first.
Mortgages are essential financial tools that create a pathway to homeownership for millions of Americans each year. In recent years, however, many homebuyers have struggled to obtain small mortgages to purchase low-cost homes, those priced under $150,000.1 This problem has garnered the attention of federal regulators, including the Federal Housing Administration (FHA) and the Consumer Financial Protection Bureau (CFPB), who view small mortgages as important tools to increase wealth-building and homeownership opportunities in financially undeserved communities.2
Research has explored mortgage access at different loan amounts, such as below $100,000 or $70,000, and found that small mortgages are scarce relative to larger home loans. Those analyses show that applications for small mortgages are more likely to be denied than those for larger loans, even when applicants have similar credit scores.3 Although the existing research has identified several possible contributing factors to the shortage of small mortgages, the full spectrum of causes and their relative influence are not well understood.4
The Pew Charitable Trusts set out to fill that gap by examining the availability of small mortgages nationwide, the factors that impede small mortgage lending, and the options available to borrowers who cannot access these loans. Pew researchers compared real estate transaction and mortgage origination data from 2018 to 2021 in 1,440 counties across the U.S.; looked at homeownership statistics; and reviewed the results from Pew’s 2022 survey of homebuyers who have used alternative financing methods, such as land contracts and rent-to-own agreements.5 (See the separate appendices document for more details.) This examination found that:
Small mortgages became less common from 2004 to 2021. Nationally, much of the decline in small mortgage lending is the result of home price appreciation, which continually pushes properties above the price threshold at which small mortgages could finance them. However, even after accounting for price changes, small mortgages are less available nationwide than they were two decades ago, although the decline varies by geography.
Most low-cost home purchases do not involve a mortgage. Despite rising prices, sales of low-cost homesremain common nationwide, accounting for more than a quarter of total sales from 2018 to 2021. However, just 26% of properties that sold for less than $150,000 were financed using a mortgage, compared with 71% of higher-cost homes.
Borrowers who cannot access small mortgages typically experience one of three undesirable outcomes. Some households cannot achieve homeownership, which deprives them of one of this nation’s key wealth-building opportunities. Others pay for their home purchase using cash, though this option is challenging for all but the most well-resourced households and is almost never available to first-time homebuyers. And, finally, some resort to alternative financing arrangements, which tend to be riskier and costlier than mortgages, because in most states they are poorly defined and not subject to robust—or sometimes any—consumer protections.
Structural and regulatory barriers limit the profitability of small mortgage lending. The most significant of these barriers is that the fixed costs of originating a mortgage are disproportionally high for smaller loans. Federal policymakers can help address these challenges by identifying opportunities to modernize certain regulations in ways that reduce lenders’ costs without compromising borrower protections.
Mortgages are the main pathway to homeownership
In the United States, homeownership remains a priority for most families: In one nationally representative survey, 74% of respondents said owning a home is an integral part of the American Dream.6 Some Americans value homeownership for personal reasons, citing it as a better option for their family, their sense of safety and security, and their privacy.7 Still others emphasized homeownership’s financial benefits, noting that owning makes more economic sense than renting, enables them to take advantage of their home’s resale value, and can provide substantial tax benefits.8
But regardless of their reasons for buying homes, most American families rely on mortgages to gain access to homeownership because they cannot afford to purchase a home with cash. According to a survey conducted from July 2021 to June 2022, 78% of homebuyers financed their purchases with mortgages, most of which were fixed-rate loans. Mortgages are even more prevalent among first-time homebuyers: 97% used a mortgage to purchase their starter home.9 Given the predominance of mortgages, it is no surprise that changes in mortgage availability have closely correlated with shifts in the nation’s homeownership rate over the past two decades.10 (See Figure 1.)
Mortgages not only enable homeownership, but they also enhance its financial benefits. In most cases, these loans help borrowers purchase larger or more valuable homes than they could otherwise afford. Fixed-rate mortgages also serve as a hedge against inflation and offer borrowers housing cost certainty in the form of a predictable schedule of payments for the duration of the loan.
In addition, mortgages are subject to robust consumer protections. Most mortgages include inspection and appraisal contingencies, which ensure that homes meet minimum habitability standards and that the sale price reflects the home’s true market value, respectively.11 Further, real estate transactions involving mortgages typically include a clear process for transferring the property’s title from seller to buyer, which is a crucial step in guaranteeing that borrowers can demonstrate ownership of their property. And in the event of default, CFPB rules contain clear foreclosure and delinquency processes that give mortgage borrowers an opportunity to make any missed payments and retain their homes.12
Because of these advantages, financing a home purchase with a mortgage is almost always in buyers’ best interest. However, homebuyers seeking loans under $150,000 are often unable to find a mortgage and so are deprived of the benefits of homeownership, of mortgages, or both.
Small mortgages are scarce
Small mortgages are less common today than they were before the Great Recession, when lenders issued small and large mortgages in roughly equal measure. In 2004, for example, lenders originated 2.7 million mortgages for less than $150,000 (in 2004 dollars) and 2.9 million large mortgages—those of $150,000 or more. But Pew estimates that from 2004 to 2021, small mortgage lending fell by nearly 70% to 830,000 loans a year, while large mortgage lending grew by 52% to 4.4 million loans annually. The decline was more acute in certain parts of the country. For instance, the Federal Reserve Bank of Philadelphia found that small mortgages declined by only 28% in Pennsylvania and Delaware from 2019 to 2021 but fell by 43% in New Jersey over the same span.13
Some of the decrease in small mortgage lending can be explained by rising home prices. As homes become more expensive, fewer properties can be purchased using a small mortgage. And the issue of housing affordability has grown more acute over the past two decades. According to the Zillow Home Value Index, single-family home prices rose faster than the rate of inflation from 2004 to 2021. Furthermore, those increases were largest among lower-priced homes.14 Still, home price appreciation does not fully account for the decline in small mortgage lending. (See Figure 2.)
Although low-cost properties are scarcer than they once were, they continue to be bought and sold in large numbers across the country. But the share of those homes purchased with a mortgage is far lower than that for higher-priced properties. From 2018 to 2021, the 1,440 counties Pew studied collectively recorded about 20 million home sales, of which 5.3 million were for less than $150,000. Although the share of low-cost properties varied based on local market conditions, every county in this analysis recorded at least one low-cost sale. During the same period, lenders originated about 12.1 million mortgages in the counties Pew studied, including roughly 1.4 million for purchases under $150,000.15 Based on these mortgage origination and home sale figures, Pew estimates that about 71% of homes priced at $150,000 or more were financed using a mortgage, compared with just 26% of lower-cost homes. (See Figure 3.) This amounts to a financing gap of 44 percentage points, or about 560,000 home purchases that were not financed with small mortgages.
Importantly, however, this analysis probably overstates the magnitude of the financing gap for two key reasons. First, Pew is unable to observe the physical quality of the homes purchased in the studied counties. Evidence suggests that low-cost homes are more likely than higher-cost homes to have structural deficiencies that disqualify them from mortgage financing. Second, even if small mortgages are readily available, many sellers, and probably some buyers, are likely to prefer cash transactions. (See “Cash purchases” below for more details.) Still, these factors do not fully account for the gap in small mortgage financing.
What happens when people cannot get a small mortgage?
When prospective buyers of low-cost homes cannot access a small mortgage, they typically have three options: turn to alternative forms of financing such as land contracts, lease-purchases, or personal property loans; purchase their home using cash; or forgo owning a home and instead rent or live with family or friends. Each of these outcomes has significant disadvantages relative to buying a home using a small mortgage.
Alternative financing
Many alternative financing arrangements are made directly between a seller and a buyer to finance the sale of a home and are generally costlier and riskier than mortgages.16 For example, personal property loans—an alternative arrangement that finances manufactured homes exclusive of the land beneath them—have median interest rates that are nearly 4 percentage points higher than the typical mortgage issued for a manufactured home purchase.17 Further, research in six Midwestern states found that interest rates for land contracts—arrangements in which the buyer pays regular installments to the seller, often for an agreed upon period of time—ranged from zero to 50%, with most above the prime mortgage rate.18 And unlike mortgages, which are subject to a robust set of federal regulations, alternative arrangements are governed by a weak patchwork of state and federal laws that vary widely in their definitions and protections.19
But despite the risks, millions of homebuyers continue to turn to alternative financing. Pew’s first-of-its-kind survey, fielded in 2021, found that 36 million people use or have used some type of alternative home financing arrangement.20 And a 2022 follow-up survey on homebuyers’ experiences with alternative financing found that these arrangements are particularly prevalent among buyers of low-cost homes. From 2000 to 2022, 50% of borrowers who used these arrangements purchased homes under $150,000. (See the separate appendices document for survey toplines.)
Further, the 2022 survey found that about half of alternative financing borrowers applied—and most reported being approved or preapproved—for a mortgage before entering into an alternative arrangement. Pew’s surveys of borrowers, interviews with legal aid experts, and review of research on alternative financing shed some light on the advantages of alternative financing—despite its added costs and risks—compared with mortgages for some homebuyers:
Convenience. Alternative financing borrowers do not have to submit or sign as many documents as they would for a mortgage, and in some instances, the purchase might close more quickly.21 For example, Pew’s 2022 survey found that just 67% of respondents said they had to provide their lender with bank statements, pay stubs, or other income verification and only 60% had to furnish a credit report, credit score, or other credit check, all of which are standard requirements for mortgage transactions.
Upfront costs. Some alternative financing arrangements have lower down payment requirements than do traditional mortgages.22 Borrowers who are unable to afford a substantial down payment or who want small monthly payments may find alternative financing more appealing than mortgages, even if those arrangements cost more over the long term. For example, in Pew’s 2022 survey, 23% of respondents said they did not pay a down payment, deposit, or option fee. And among those who did have a down payment, 75% put down less than 20% of the home price, compared with 59% of mortgage borrowers in 2021.23
Specifics of a home. Borrowers who prioritize the location or amenities of a specific home over the type, convenience, and cost of financing they use might agree to an alternative arrangement if the seller insists on it, rather than forgo purchasing the home.
Familiarity with seller. Borrowers buying a home from family or friends might agree to a transaction that is preferable to the seller because they trust that family or friends will give them a fair deal, perhaps one that is even better than they would get from a mortgage lender.
However, regardless of a borrower’s reasons, the use of alternative financing is cause for concern because it is disproportionately used—and thus the risks and costs are inequitably borne—by racial and ethnic minorities, low-income households, and owners of manufactured homes. Among Americans who have financed a home purchase, 34% of Hispanic and 23% of Black households have used alternative financing at least once, compared with just 19% of White borrowers. (See Figure 4.) Further, families earning less than $50,000 are seven times more likely to use alternative financing than those earning more than $50,000. And nearly half of surveyed manufactured home owners reported using a personal property loan.24 In all of these cases, expanding access to small mortgages could help reduce historically underserved communities’ reliance on risky alternative financing arrangements.
Cash purchases
Other homebuyers who fail to obtain a small mortgage instead choose to pay cash for their homes. In 2021, about a quarter of all home sales were cash purchases, and that share grew in 2022 amid an increasingly competitive housing market.25 The share of cash purchases is larger among low-cost than higher-cost property sales, which may partly be a consequence of the lack of small mortgages.26 However, although cash purchases are appealing to some homebuyers and offer some structural advantages, especially in competitive markets, they are not economically viable for the vast majority of first-time homebuyers, 97% of whom use mortgages.27
Purchasing a house with cash gives buyers a competitive advantage, compared with using a mortgage. Sellers often prefer to work with cash buyers over those with financing because payment is guaranteed, and the buyer does not need time to secure a mortgage. Cash purchases also enable simpler, faster, and cheaper sales compared with financed purchases by avoiding lender requirements such as home inspections and appraisals. In essence, cash sales eliminate “financing risk” for sellers by removing the uncertainties and delays that can accompany mortgage-financed sales. Indeed, as the housing supply has tightened and competition for the few available homes has increased, purchase offers with financing contingencies have become less attractive to sellers. As a result, some financing companies have stepped in to make cash offers on behalf of buyers, enabling those borrowers to be more competitive but often saddling them with additional costs and fees.
However, most Americans do not have the financial resources to pay cash for a home. In 2019, the median home price was $258,000, but the median U.S. renter had just $15,750 in total assets—far less than would be necessary to buy a house.28 Even households with cash on hand may be financially destabilized by a cash purchase because investing a substantial sum of money into a home could severely limit the amount of money they have available for other needs, such as emergencies or everyday expenses. Perhaps because of the financial challenges, homes purchased with cash tend to be smaller and cheaper than homes bought using a mortgage.29
These challenging economic factors limit the types of homebuyers who pursue cash purchases. Investors—both individual and institutional—make up a large share of the cash-purchase market, and are more likely than other buyers to purchase low-cost homes and then return the homes to the market as rental units.30
Researchers have questioned whether cash purchases are truly an alternative to mortgage financing or whether they fundamentally change the composition of homebuyers. One study conducted in 2016 determined that tight credit standards enacted in the aftermath of the 2008 housing market crash resulted in a large uptick in cash purchases, mostly by investor-buyers.31 More recent evidence from 2020 through 2021 suggests that investor purchases are more common in areas with elevated mortgage denial rates, low home values, and below-average homeownership rates.32 In each of these cases, a lack of mortgage access tended to benefit investors, possibly at the expense of homeowners.
No homeownership
Some prospective homebuyers who are unable to access a small mortgage simply forgo homeownership entirely. Instead of buying, these families may choose to rent or live with friends or family. And although these are not necessarily bad outcomes, they lack the financial advantages of homeownership.
On average, homeowners have a net worth that is more than 40 times that of renters, largely because of the equity they accrue from paying down their mortgage balances and from their homes’ appreciation over time.33 In 2019, the median homeowner had $225,000 of equity, accounting for almost 90% of their overall net worth.34
Further, in rental markets with few vacancies and commensurately high costs, owning a home can cost less per month than renting. Recent evidence suggests that, particularly when mortgage interest rates are low, a mortgage payment for a three-bedroom house can be cheaper than the monthly rent for a three-bedroom apartment.35 Likewise, some evidence suggests that buying an inexpensive starter home costs less than renting in some metropolitan areas in the South and Midwest.36
Importantly, the financial benefits of homeownership are not shared equally throughout the country. Historical patterns of discrimination in mortgage lending and government policy have prevented Black, Hispanic, and Indigenous households from accessing homeownership at the same rate as White households. And many of those structural barriers persist, as evidenced by the Black-White homeownership gap, which was wider in 2020 than it was in 1970.37
Mortgage Denials Play a Small Role in Low Access to Credit
Lenders deny applications for small mortgages more often than those for larger loans. From 2018 to 2021, lenders received about 700,000 small mortgage applications per year for site-built single-family homes, of which they denied 11.8%. In contrast, lenders denied just 7.8% of the roughly 3.6 million applications submitted annually for larger mortgages during the same period.
These differences do not entirely reflect applicants’ creditworthiness, as measured by debt-to-income ratio (a person’s monthly debt divided by their income), loan-to-value ratio (dollar amount of a mortgage as a share of the subject property’s appraised value), or credit scores. Research demonstrates that, even for applicants with similar credit profiles, denial rates are much higher for small mortgages than large ones.38 Pew’s analysis confirms these findings. Lenders denied small mortgage applicants with low debt-to-income ratios (36% and below) 8.8% of the time, compared with 4.7% of the time for larger loan applicants with a similar profile. Likewise, applicants with loan-to-value ratios under 80% were more likely to be denied for a small mortgage than a large one.
However, mortgage denials are not the primary cause of the small mortgage shortage. Pew’s analysis found that if lenders denied applications for small mortgages at the same rate as those for larger mortgages, they would originate about 31,000 more small mortgages each year. Although thousands of borrowers would benefit from lower small mortgage denial rates, those additional loans would increase the share of low-cost properties financed with a mortgage by only about 3 percentage points. These findings suggest that lowering the denial rate is not sufficient to increase access to safe and affordable mortgage financing and that regulators need to do more to improve incentives for lenders to originate small mortgages and boost awareness among borrowers.
Small mortgage lending is not profitable for lenders
Policymakers, consumer advocates, and industry agree that increasing the supply of small mortgages could boost homeownership—especially in underserved, low-cost communities.39 But many mortgage lenders simply do not offer small home loans to borrowers. Of the more than 5,000 lenders that originated mortgages from 2018 to 2021, 38% did not issue a single small mortgage.40
In conversations with Pew, lenders, consumer advocates, and government officials identified several potential structural and regulatory obstacles to small mortgage lending. These include the high fixed cost of origination, commission-based compensation for loan officers, the poor physical quality of many low-cost housing units, and various rules and regulations that help protect consumers but may add cost or complexity to the origination process and could be updated to maintain safety at lower cost to lenders.
Structural barriers
Lenders have repeatedly identified the high fixed cost of mortgage originations as a barrier to small mortgage lending because origination costs are roughly constant regardless of loan amount, but revenue varies by loan size. As a result, small mortgages cost lenders about as much to originate as large ones but produce much less revenue, making them unprofitable. Further, lenders have reported an increase in mortgage origination costs in recent years: $8,243 in 2020, $8,664 in 2021, and $10,624 in 2022.41 In conversations with Pew, lenders indicated that many of these costs stem from factors that do not vary based on loan size, including staff salaries, technology, compliance, and appraisal fees.
Lenders typically charge mortgage borrowers an origination fee of 0.5% to 1.0% of the total loan balance as well as closing costs of roughly 3% to 6% of the home purchase price.42 Therefore, more expensive homes—and the larger loans usually used to purchase them—produce higher revenue for lenders than do small mortgages for low-cost homes.
In addition, standard industry compensation practices for loan officers may limit the availability of small mortgages. Lenders typically employ loan officers to help borrowers choose a loan product, collect relevant financial documents, and submit mortgage applications—and pay them wholly or partly on commission.43 And because larger loans yield greater compensation, loan officers may focus on originating larger loans at the expense of smaller ones, reducing the availability of small mortgages.
Finally, lenders must contend with an aging and deteriorating stock of low-cost homes, many of which need extensive repairs. Data from the American Housing Survey shows that 6.7% of homes valued under $150,000 (1.1 million properties) do not meet the Department of Housing and Urban Development’s definition of “adequacy,” compared with just 2.6% of homes valued at $150,000 or more (1.7 million properties).44 The Federal Reserve Bank of Philadelphia estimates that, despite some improvement in housing quality overall, the total cost of remediating physical deficiencies in the nation’s housing stock nevertheless increased from $126.2 billion in 2018 to $149.3 billion in 2022.45
The poor physical quality of many low-cost properties can limit lenders’ ability to originate small mortgages for the purchase of those homes. For instance, physical deficiencies threaten a home’s present and future value, which makes the property less likely to qualify as loan collateral. And poor housing quality can render many low-cost homes ineligible for federal loan programs because the properties cannot meet those programs’ strict habitability standards.
Regulatory barriers
Regulations enacted in the wake of the Great Recession vastly improved the safety of mortgage lending for borrowers and lenders. But despite this success, some stakeholders have called for streamlining of regulations that affect the cost of mortgage origination to make small mortgages more viable. The most commonly cited of these are certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the Qualified Mortgage rule (QM rule), the Home Ownership and Equity Protection Act of 1994 (HOEPA), and parts of the CFPB’s Loan Originator Compensation rule.46
The Dodd-Frank Act requires creditors to make a reasonable, good-faith determination of a consumer’s ability to repay a mortgage. This provision has significantly increased the safety of the mortgage market and protected borrowers from unfair and abusive loan terms—such as unnecessarily high interest rates and fees—as well as terms that could strip borrowers of their equity. Lenders can meet Dodd-Frank’s requirements by originating a “qualified mortgage” (QM), which is a loan that meets the CFPB’s minimum borrower safety standards, including limits on the points, fees, and annual percentage rate (APR) the lender can charge.47 In return for originating mortgages under this provision, known as the QM rule, the act provides protection for lenders from any claims by borrowers that they failed to verify the borrower’s ability to repay and so are liable for monetary damages in the event that the borrower defaults and loses the home.
Some lenders and researchers have suggested that the QM rule has increased the cost of mortgage origination because lenders had to establish new processes to verify borrowers’ ability to repay and adhere to stricter compliance requirements.48 In addition, lenders who cannot keep their charges within the QM rule limits often have to offer credits to lower the borrower-facing fees, which can result in lenders originating the loan at a loss.49 And although 2020 revisions to the QM rule gave lenders more flexibility in calculating a borrower’s ability to repay, the extent to which those changes help lenders keep origination costs in check remains unclear.
Another regulation that lenders and researchers have cited as possibly raising the cost of origination is the CFPB’s Loan Originator Compensation rule. The rule protects consumers by reducing loan officers’ incentives to steer borrowers into products with excessively high interest rates and fees. However, lenders say that by prohibiting compensation adjustments based on a loan’s terms or conditions, the rule prevents them from lowering costs for small mortgages, especially in underserved markets. For example, when making small, discounted, or reduced-interest rate products for the benefit of consumers, lenders earn less revenue than they do from other mortgages, but because the rule entitles loan officers to still receive full compensation, those smaller loans become relatively more expensive for lenders to originate. Lenders have suggested that more flexibility in the rule would allow them to reduce loan officer compensation in such cases.50 However, regulators and researchers should closely examine the effects of this adjustment on lender and borrower costs and credit availability. Although such changes would lower lenders’ costs to originate small mortgages for underserved borrowers, they also could further disincline loan officers from serving this segment of the market and so potentially do little to address the small mortgage shortage.
Lastly, some lenders have identified HOEPA as another deterrent to small mortgage lending. The law, enacted in 1994, protects consumers by establishing limits on the APR, points and fees, and prepayment penalties that lenders can charge borrowers on a wide range of loans. Any mortgage that exceeds a HOEPA threshold is deemed a “high-cost mortgage,” which requires lenders to make additional disclosures to the borrower, use prescribed methods to assess the borrower’s ability to repay, and avoid certain loan terms. Changes to the HOEPA rule made in 2013 strengthened the APR and points and fees standards, further protecting consumers but also limiting lenders’ ability to earn revenue on many types of loans. Additionally, the 2013 revision increased the high-cost mortgage thresholds, revised disclosure requirements, restricted certain loan terms for high-cost mortgages, and imposed homeownership counseling requirements.
Many lenders say the 2013 changes to HOEPA increased their costs and compliance obligations and exposed them to legal and reputational risk. However, research has shown that the changes did not significantly affect the overall loan supply but have been effective in discouraging lenders from originating loans that fall above the high-cost thresholds.51 More research is needed to understand how the rule affects small mortgages.
Regulators and lenders have taken some action to expand access to small mortgages
A diverse array of stakeholders, including regulators, consumer advocates, lenders, and researchers, support policy changes to safely encourage more small mortgage lending.52 And policymakers have begun looking at various regulations to identify any that may inadvertently limit borrowers’ access to credit, especially small mortgages, and to address those issues without compromising consumer protections.
Some regulators have already introduced changes that could benefit the small mortgage market by reducing the cost of mortgage origination. For example, in 2022, the Federal Housing Finance Agency (FHFA) announced that to promote sustainable and equitable access to housing, it would eliminate guarantee fees (G-fees)—annual fees that Fannie Mae and Freddie Mac charge lenders when purchasing mortgages—for loans issued to certain first-time, low-income, and otherwise underserved homebuyers.53 Researchers, advocates, and the mortgage industry have long expressed concern about the effect of G-fees on the cost of mortgages for borrowers, and FHFA’s change may lower costs for buyers who are most likely to use small mortgages.54
Similarly, FHFA’s decision to expand the use of desktop appraisals, in which a professional appraiser uses publicly available data instead of a site visit to determine a property’s value, has probably cut the amount of time it takes to close a mortgage as well as appraisal costs for certain loans, which in turn should reduce the cost of originating small loans without materially increasing the risk of defaults.55
At the same time, some lenders have been exploring the use of special purpose credit programs (SPCPs) to increase access to mortgage financing for low-cost homebuyers from historically disadvantaged communities.56 SPCPs allow lenders to design loan products that address the unique needs of borrowers of color, manufactured home buyers, and residents of areas where alternative financing is prevalent, all of whom have typically been underserved by the mortgage industry.
Other entities, such as nonprofit organizations and community development financial institutions (CDFIs), are also developing and offering small mortgage products that use simpler, more flexible underwriting methods than other mortgages, thus reducing origination costs.57 Where these products are available, they have increased access to small mortgages and homeownership, especially for low-income families and homebuyers of color.
Although these initiatives are encouraging, high fixed costs are likely to continue making small mortgage origination difficult, and the extent to which regulations governing loan origination affect—or might be safely modified to lower—these costs is uncertain. Unless policymakers address the major challenges—high fixed costs and their drivers—lenders and regulators will have difficulty bringing innovative solutions to scale to improve access to small mortgages. Future research should continue to explore ways to reduce costs for lenders and borrowers and align regulations with a streamlined mortgage origination process, all while protecting borrowers and maintaining market stability.
Solutions to small mortgage challenges in underserved communities
Structural barriers such as high fixed origination costs, rising home prices, and poor home quality partly explain the shortage of small mortgages. But borrowers also face other obstacles, such as high denial rates, difficulty making down payments, and competition in housing markets flooded with investors and other cash purchasers. And although small mortgages have been declining overall, the lack of credit access affects some communities more than others, driving certain buyers into riskier alternative financing arrangements or excluding them from homeownership entirely.
To better support communities where small mortgages are scarce, policymakers should keep the needs of the most underserved populations in mind when designing and implementing policies to increase access to credit and homeownership. No single policy can improve small mortgage access in every community, but Pew’s work suggests that structural barriers are a primary driver of the small mortgage shortage and that federal policymakers can target a few key areas to make a meaningful impact:
Drivers of mortgage origination costs. Policymakers should evaluate federal government compliance requirements to determine how they affect costs and identify ways to streamline those mandates without increasing risk, particularly through new financial technology. As FHFA Director Sandra L. Thompson stated in April 2023: “Over the past decade, mortgage origination costs have doubled, while delivery times have remained largely unchanged. When used responsibly, technology has the potential to improve borrowers’ experiences by reducing barriers, increasing efficiencies, and lowering costs.”58
Incentives that encourage origination of larger rather than smaller mortgages. Policymakers can look for ways to discourage compensation structures that drive loan officers to prioritize larger-balance loans, such as calculating loan officers’ commissions based on individual loan values or total lending volume.
The balance between systemic risk and access to credit. Although advocates and industry stakeholders agree that regulators should continue to protect borrowers from the types of irresponsible lending practices that contributed to the collapse of the housing market from 2005 to 2007, underwriting standards today prevent too many customers from accessing mortgages.59 A more risk-tolerant stance from the federal government could unlock access to small mortgages and homeownership for more Americans. For example, the decision by Fannie Mae and Freddie Mac (known collectively as the Government Sponsored Enterprises, or GSEs) and FHA to include a positive rent payment record—as well as Freddie Mac’s move to allow lenders to use a borrower’s positive monthly bank account cash-flow data—in their underwriting processes will help expand access to credit to a wider pool of borrowers.60
Habitability of existing low-cost housing and funding for repairs. Restoring low-cost homes could provide more opportunities for borrowers—and the homes they wish to purchase—to qualify for small mortgages. However, more analysis is needed to determine how to improve the existing housing stock without increasing loan costs for lenders or borrowers.
In addition to reducing structural and regulatory barriers to small mortgage lending, a robust policy response on home financing should focus on borrowers who are acutely affected by the lack of small mortgages. Federal policymakers should look for opportunities to expand existing programs and policies for communities that have historically been excluded from homeownership and mortgage access, particularly:
The Duty to Serve rule, which directs the GSEs to improve access to mortgage financing for borrowers of modest means in three underserved markets: manufactured housing, rural communities, and areas requiring funds to preserve affordable housing. Homebuyers in these markets often require a small mortgage to purchase a home, so the GSEs could seek to link their Duty to Serve obligations with small mortgage lending in these markets.
Equitable Housing Finance Plans, which are three-year strategies that the GSEs develop to promote equitable access to affordable and sustainable housing for disadvantaged groups, particularly Black and Hispanic communities. People in these communities are less likely to own a home and more likely to use alternative financing than the overall population, which probably indicates an unmet demand for mortgages. The GSE leadership should consider adding an objective to their plans related to refinancing alternative financing arrangements—which the plans’ target communities disproportionally use—into mortgages.
SPCPs, which can help lenders better serve specific populations that would otherwise be denied credit or receive it on less favorable terms. Policymakers should encourage the creation and use of these programs for underserved populations in low-cost areas where there is a special need for small mortgages and measure the impacts.
Future Pew research will explore not only important questions about the barriers to small mortgage origination but also the strategies that policymakers can use to expand the nation’s affordable housing stock, improve the habitability of existing low-cost homes, and ensure that small mortgages are more accessible and competitive in the marketplace.
Conclusion
Mortgages are vital financial tools that enable homeownership and wealth-building opportunities for millions of Americans each year. However, the scarcity of small mortgages deprives some prospective borrowers of homeownership opportunities and drives others to buy their homes with cash or risky alternative financing arrangements.
To address this problem, policymakers should aim to expand mortgage access and the overall safety of financing for low-cost homes by reducing the structural and regulatory constraints that increase lenders’ costs and make small mortgages unprofitable, and establishing strong consumer protections for alternative arrangements. In addition, federal agencies and lawmakers can reduce racial disparities in mortgage lending by prioritizing Black, Hispanic, and Indigenous households in the development and implementation of small mortgage and alternative financing programs. Together, these initiatives would help bring homeownership opportunities to more Americans.
This brief also benefited from the valuable insights of Dan Gorin, lead supervisory policy analyst, Federal Reserve Board of Governors; Roberto Quercia, professor, the University of North Carolina at Chapel Hill; Craig Richardson, professor, Winston-Salem State University; and Sabiha Zainulbhai, senior policy analyst, New America. Although they reviewed drafts of the brief, neither they nor their institutions necessarily endorse the findings or conclusions.
This brief was researched and written by Pew staff members Tracy Maguze, Tara Roche, and Adam Staveski. The project team thanks current and former colleagues Nick Bourke, Ryan Canavan, Jennifer V. Doctors, David East, Anne Holmes, Alex Horowitz, Dave Lam, Omar Antonio Martínez, Cindy Murphy-Tofig, Tricia Olszewski, Reagan Ortiz, Travis Plunkett, Andy Qualls, Ryland Staples, Drew Swinburne, and Mark Wolff for providing important communications, creative, editorial, and research support for this work.
Endnotes
Pew defines small mortgages as loans under $150,000. For the purposes of this study, loan values are adjusted for inflation to reflect 2021 dollars unless otherwise noted. This value is based on conversations with mortgage lenders and on an observed decline in lending below that threshold over the past decade. Additionally, for the purposes of this paper, low-cost homes are those priced at less than $150,000, also in 2021 dollars. This price range is consistent with the majority of purchases financed with small mortgages. The median down payment among small mortgage borrowers is just 5%, and as a result, 75% of small mortgages are used to purchase a home under $157,500, although some borrowers do pair small mortgages with larger down payments to purchase higher-cost homes.
Request for Information Regarding Small Mortgage Lending, 87 Fed. Reg. 60186-87 (Oct. 4, 2022); Request for Information Regarding Mortgage Refinances and Forbearances, 87 Fed. Reg. 58487-92 (Sept. 27, 2022).
U.S. Department of Housing and Urban Development, “Financing Lower-Priced Homes: Small Mortgage Loans” (2022), https://www.huduser.gov/portal/portal/sites/default/files/pdf/Financing-Lower-Priced-Homes-Small-Mortgage-Loans.pdf.
S. Zainulbhai et al., “The Lending Hole at the Bottom of the Homeownership Market” (New America, 2021), https://www.newamerica.org/future-land-housing/reports/the-lending-hole-at-the-bottom-of-the-homeownership-market/; U.S. Department of Housing and Urban Development, “Financing Lower-Priced Homes”; A. McCargo et al., “Small-Dollar Mortgages for Single-Family Residential Properties” (Urban Institute, 2018), https://www.urban.org/research/publication/small-dollar-mortgages-single-family-residential-properties; E. Goldstein and K. DeMaria, “Small-Dollar Mortgage Lending in Pennsylvania, New Jersey, and Delaware” (Federal Reserve Bank of Philadelphia, 2022), https://www.philadelphiafed.org/community-development/credit-and-capital/small-dollar-mortgage-lending-in-pennsylvania-new-jersey-and-delaware; L. Goodman, B. Bai, and W. Li, “Real Denial Rates: A Better Way to Look at Who Is Receiving Mortgage Credit” (working paper, Urban Institute, 2018), https://www.urban.org/sites/default/files/publication/98823/real_denial_rates_1.pdf; A. McCargo, B. Bai, and S. Strochak, “Small-Dollar Mortgages: A Loan Performance Analysis” (Urban Institute, 2019), https://www.urban.org/sites/default/files/publication/99906/ small_dollar_mortgages_a_loan_performance_analysis_2.pdf.
Federal Financial Institutions Examination Council, Home Mortgage Disclosure Act, 2018-2021, https://ffiec.cfpb.gov/data-browser/; Zillow Group Inc., Zillow Transaction and Assessment Database, 2018-21, https://www.zillow.com/research/ztrax/. This analysis uses data on mortgage transactions from the HMDA database, the most comprehensive source of information on mortgage lending in the United States. Mortgage lenders report application-level information directly to the CFPB, which compiles and republishes the data for public use. Data on home sales was provided by Zillow through Zillow’s Transaction and Assessment Database (ZTRAX). More information on accessing the data can be found at https://www.zillow.com/research/ztrax/. The results and opinions are those of the authors and do not reflect the position of Zillow Group.
Bankrate, “Nearly Two-Thirds Say Affordability Factors Are Holding Them Back From Homeownership” (Bankrate.com, 2022), https://www.bankrate.com/pdfs/pr/20220330-march-fsp.pdf.
D. Sackett and K. Handel, The Tarrance Group, letter to Woodrow Wilson Center, “Key Findings From National Survey of Voters,” May 21, 2012, https://www.wilsoncenter.org/sites/default/files/media/documents/article/keyfindingsfromsurvey.pdf.
Ibid.
National Association of Realtors, “Profile of Home Buyers and Sellers” (2022), https://www.nar.realtor/sites/default/files/documents/2022-highlights-from-the-profile-of-home-buyers-and-sellers-report-11-03-2022_0.pdf.
A. Acolin, L. Goodman, and S.M. Wachter, “Accessing Homeownership With Credit Constraints,” Housing Policy Debate 29, no. 1 (2019): 108-25, https://www.tandfonline.com/doi/full/10.1080/10511482.2018.1452042?casa_token=5ZjHGNxo1VoAAAAA%3AtLKWk_xn7JT3Uz2G7T_zziEuPZa0NlarhJ-tGl6m83DgxB6rq-IYSU7eZNI9mIwBAFx5o7BGbulINcjA.
N. Bourke, T. Roche, and C. Hatchett, “Homeowners With Risky Alternatives to Traditional Mortgages Eligible for COVID-19 Relief Money,” The Pew Charitable Trusts, Nov. 1, 2021, https://www.pewtrusts.org/en/research-and-analysis/articles/2021/11/01/homeowners-with-risky-alternatives-to-traditional-mortgages-eligible-for-covid19-relief-money.
Goldstein and DeMaria, “Small-Dollar Mortgage Lending in Pennsylvania, New Jersey, and Delaware.”
Zillow Group Inc., “Zillow Home Value Index (ZHVI),” 2000-22, https://www.zillow.com/research/data/.
Some borrowers use small mortgages to purchase properties valued at more than $150,000, but Pew is primarily interested in expanding homeownership opportunities to underserved populations, so this analysis considers only low-cost properties.
The Pew Charitable Trusts, “What Has Research Shown About Alternative Home Financing in the U.S.?” (2022), https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2022/04/what-has-research-shown-about-alternative-home-financing-in-the-us.
Consumer Financial Protection Bureau, “Manufactured Housing Finance: New Insights From the Home Mortgage Disclosure Act Data” (2021), https://files.consumerfinance.gov/f/documents/cfpb_manufactured-housing-finance-new-insights-hmda_report_2021-05.pdf.
A. Carpenter, T. George, and L. Nelson, “The American Dream or Just an Illusion? Understanding Land Contract Trends in the Midwest Pre- and Post-Crisis” (Joint Center for Housing Studies of Harvard University, 2019), 9, https://www.jchs.harvard.edu/sites/default/files/media/imp/harvard_jchs_housing_tenure_symposium_carpenter_george_nelson.pdf.
The Pew Charitable Trusts, “What Has Research Shown?”; National Consumer Law Center, “Summary of State Land Contract Statutes” (2021), https://www.pewtrusts.org/en/research-and-analysis/white-papers/2022/02/less-than-half-of-states-have-laws-governing-land-contracts.
The Pew Charitable Trusts, “Millions of Americans Have Used Risky Financing Arrangements to Buy Homes” (2022), https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2022/04/millions-of-americans-have-used-risky-financing-arrangements-to-buy-homes.
H.K. Way, “Informal Homeownership in the United States and the Law,” Saint Louis University Public Law Review XXIX, no. 113 (2010): 113-92, https://law.utexas.edu/faculty/hway/informal-homeownership.pdf.
Ibid.
HMDA data for 2022 was not available at time of publication.
The Pew Charitable Trusts, “Millions of Americans Have Used Risky Financing Arrangements to Buy Homes.”
National Association of Realtors, “Realtors Confidence Index Survey” (2022), https://cdn.nar.realtor/sites/default/files/documents/2022-09-realtors-confidence-index-10-20-2022.pdf; D. Anderson, “Share of Homes Bought With All Cash Hits Highest Level Since 2014,” Redfin, https://www.redfin.com/news/all-cash-home-purchases-fha-loans-october-2022/.
T. Malone, “Single-Family Investor Activity Bounces Back in the First Quarter of 2022” (CoreLogic, 2022), https://www.corelogic.com/intelligence/single-family-investor-activity-bounces-back-in-the-first-quarter-of-2022/.
Federal Reserve Board, Survey of Consumer Finances, 1989-2019, https://www.federalreserve.gov/econres/scf/dataviz/scf/table/#series:Transaction_Accounts;demographic:agecl;population:all;units:median. In 2019, the median balance in the checking and savings accounts of Americans younger than 35 was just $3,240; it jumps to $5,620 for accountholders ages 55 to 64.
Ibid.
S. Riley, A. Freeman, and J. Dorrance, “Alternatives to Mortgage Financing for Manufactured Housing” (The University of North Carolina at Chapel Hill Center for Community Capital, 2021), https://www.pewtrusts.org/-/media/assets/2022/03/alternatives-to-mortgage-financing-for-manufactured-housing.pdf.
L. Goodman, J. Zhu, and B. Bai, “Overly Tight Credit Killed 1.1 Million Mortgages in 2015,” Urban Wire (blog), Urban Institute, Nov. 21, 2016, https://www.urban.org/urban-wire/overly-tight-credit-killed-11-million-mortgages-2015.
E. Dowdall et al., “Investor Home Purchases and the Rising Threat to Owners and Renters: Tales From 3 Cities” (Nowak Metro Finance Lab, 2022), https://drexel.edu/~/media/Files/nowak-lab/220923_InvestorHomePurchases_Final.ashx?la=en.
Federal Reserve Board, Survey of Consumer Finances, 2019, https://www.federalreserve.gov/econres/scfindex.htm.
Ibid.
ATTOM Data Solutions, “Owning a Home More Affordable Than Renting in Nearly Two Thirds of U.S. Housing Markets,” Jan 7, 2021, https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-2021-rental-affordability-report/.
D. Olick, “Here’s Where Owning a Home Is Cheaper Than Renting One,” CNBC, Feb. 7, 2020, https://www.cnbc.com/2020/02/07/where-owning-a-home-is-cheaper-than-renting-one.html.
The Pew Charitable Trusts, “What Has Research Shown?,” 5.
Goodman, Bai, and Li, “Real Denial Rates.”
Consumer Financial Protection Bureau, “Request for Information: Mortgage Refinances and Forbearances,” Sept. 27, 2022, https://www.regulations.gov/document/CFPB-2022-0059-0001/comment; U.S. Department of Housing and Urban Development, “Request for Information Regarding Small Mortgage Lending,” Oct. 4, 2022, https://www.regulations.gov/docket/HUD-2022-0076/comments.
Alan S. Kaplinsky et al., “DOJ Fair Lending Focus Continues in Settlement of Case Challenging Lender’s Minimum Loan Amount Policy by the Consumer Financial Services and Mortgage Banking Groups,” Casetext, https://casetext.com/analysis/doj-fair-lending-focus-continues-in-settlement-of-case-challenging-lenders-minimum-loan-amount-policy-by-the-consumer-financial-services-and-mortgage-banking-groups. Although some lenders might not originate small mortgages mainly because they operate primarily in high-cost areas, others may require minimum loan sizes, either formally or informally, that exclude low-cost borrowers. The U.S. Department of Justice ruled in 2012 that setting minimum loan sizes of $400,000 or more violates the Fair Housing Act and the Equal Credit Opportunity Act, but whether minimum thresholds of $150,000 are unlawful remains unclear.
Mortgage Bankers Association, “Chart of the Week—July 23, 2021 Retail Production Channel: Cost to Originate ($ Per Closed Loan),” July 23, 2021, https://newslink.mba.org/mba-newslinks/2021/july/mba-newslink-monday-july-26-2021/mba-chart-of-the-week-july-23-2021-retail-production-channel-cost-to-originate/; Mortgage Bankers Association, “MBA: 2022 IMB Production Profits Fall to Series Low,” MBA Newslink, https://newslink.mba.org/mba-newslinks/2023/april/mba-2022-imb-production-profits-fall-to-series-low/.
K. Graham, “Mortgage Origination Fee: The Inside Scoop,” Rocket Mortgage LLC, https://www.rocketmortgage.com/learn/mortgage-origination-fee; M. Crace, “Closing Costs: What Are They, and How Much Will You Pay?,” Rocket Mortgage LLC, https://www.rocketmortgage.com/learn/closing-costs.
Zillow Inc., “How Is Your Loan Officer Paid?,” https://www.zillow.com/blog/how-is-your-loan-officer-paid-500/.
U.S. Census Bureau, American Housing Survey (2021), https://www.census.gov/programs-surveys/ahs/data/2021/ahs-2021-public-use-file–puf-/ahs-2021-national-public-use-file–puf-.html.
E. Divringi, “Updated Estimates of Home Repairs Needs and Costs and Spotlight on Weatherization Assistance” (Federal Reserve Bank of Philadelphia, 2023), https://www.philadelphiafed.org/community-development/housing-and-neighborhoods/updated-estimates-of-home-repairs-needs-and-costs-and-spotlight-on-weatherization-assistance.
U.S. Department of Housing and Urban Development, “MBA Response to FHA RFI Regarding Small Mortgage Lending,” Dec. 5, 2022, https://www.regulations.gov/comment/HUD-2022-0076-0025; U.S. Department of Housing and Urban Development, “New America and CSEM Response to Docket No FR-6342-N-01 on Small Mortgage Lending,” Dec. 5, 2022, https://www.regulations.gov/comment/HUD-2022-0076-0015.
To qualify, loans must meet three criteria: They cannot have negative amortization, interest-only payments, or balloon payments; the total points and fees charged cannot exceed 3% of the loan amount; and the term must be 30 years or less. They also must satisfy at least one of the following three criteria: The borrower’s total monthly debt-to-income ratio must be 43% or less; the loan must be eligible for purchase by Fannie Mae or Freddie Mac or insured by the FHA, U.S. Department of Veterans Affairs, or U.S. Department of Agriculture; or the loan must be originated by insured depositories with total assets of less than $10 billion, but only if the mortgage is held in portfolio.
F. D’Acunto and A.G. Rossi, “Regressive Mortgage Credit Redistribution in the Post-Crisis Era,” The Review of Financial Studies 35, no. 1 (2022): 482-525, https://academic.oup.com/rfs/article-abstract/35/1/482/6136188?redirectedFrom=fulltext; Freddie Mac, “Cost to Originate Study: How Digital Offerings Impact Loan Production Costs” (2021), https://sf.freddiemac.com/content/_assets/resources/pdf/report/cost-to-originate.pdf; T. Hogan, “Costs of Compliance With the Dodd-Frank Act” (Rice University’s Baker Institute for Public Policy, 2019), https://www.bakerinstitute.org/research/dodd-frank-costs-compliance.
K. Berry, “Fed’s Rate Hikes Are Tanking the Mortgage Market,” American Banker, Oct. 24, 2022, https://www.americanbanker.com/news/feds-rate-hikes-are-tanking-the-mortgage-market.
Mortgage Bankers Association, “MBA Members Urge Bureau to Change Loan Originator Compensation Rule,” MBA Newslink, Oct. 24, 2018, https://newslink.mba.org/mba-newslinks/2018/october/mba-newslink-wednesday-10-24-18/mba-members-urge-bureau-to-change-loan-originator-compensation-rule/.
Y. Benzarti, “Playing Hide and Seek: How Lenders Respond to Borrower Protection,” TheReview of Economics and Statistics (2022): 1-25, https://direct.mit.edu/rest/article-abstract/doi/10.1162/rest_a_01167/109257/Playing-Hide-and-Seek-How-Lenders-Respond-to?redirectedFrom=fulltext; Consumer Financial Protection Bureau, “Manufactured Housing Finance,” 25-27.
Consumer Financial Protection Bureau, “Request for Information: Mortgage Refinances and Forbearances.”
Federal Housing Finance Agency, “FHFA Announces Targeted Pricing Changes to Enterprise Pricing Framework,” news release, Oct. 24, 2022, https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Targeted-Pricing-Changes-to-Enterprise-Pricing-Framework.aspx. G-fees are based on the individual mortgage’s product type and credit risk attributes and help Fannie and Freddie cover administrative costs and credit losses from borrower defaults. However, these fees also increase loan origination costs.
Americans for Financial Reform, “Joint Letter: FHFA RFI on PACE Loans,” March 16, 2020, https://ourfinancialsecurity.org/2020/03/joint-letter-fhfa-rfi-pace-loans/; G. Kromrei, “Industry to Congress: G-Fees Aren’t Your ‘Piggybank,’” HousingWire, July 23, 2021, https://www.housingwire.com/articles/industry-to-congress-g-fees-arent-your-piggybank/; L. Goodman et al., “Guarantee Fees—an Art, Not a Science” (Urban Institute, 2014), https://www.urban.org/sites/default/files/publication/22841/413202-Guarantee-Fees-An-Art-Not-a-Science.PDF.
Federal Housing Finance Agency, “FHFA Announces Two Measures Advancing Housing Sustainability and Affordability,” news release, Oct. 18, 2021, https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Two-Measures-Advancing-Housing-Sustainability-and-Affordability.aspx.
S. Lee, “How Mortgage, Housing Industries Tackled Affordability in 2022,” National Mortgage News, Dec. 29, 2022, https://www.nationalmortgagenews.com/list/how-mortgage-housing-industries-tackled-affordability-in-2022; Wells Fargo, “Wells Fargo Announces Strategic Direction for Home Lending: A Smaller, Less Complex Business Focused on Bank Customers and Minority Communities,” news release, Jan. 10, 2023, https://newsroom.wf.com/English/news-releases/news-release-details/2023/Wells-Fargo-Announces-Strategic-Direction-for-Home-Lending-A-Smaller-Less-Complex-Business-Focused-on-Bank-Customers-and-Minority-Communities/default.aspx.
A. McCargo et al., “The MicroMortgage Marketplace Demonstration Project: Building a Framework for Viable Small-Dollar Mortgage Lending” (Urban Institute, 2020), https://www.urban.org/research/publication/micromortgage-marketplace-demonstration-project; Hurry Home, “A New Way to Be a Homeowner,” https://www.hurryhome.io/.
Federal Housing Finance Agency, “FHFA Announces Inaugural Housing Finance TechSprint,” news release, April 4, 2023, https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Inaugural-Housing-Finance-TechSprint.aspx.
L. Goodman, J. Zhu, and T. George, “Four Million Mortgage Loans Missing from 2009 to 2013 Due to Tight Credit Standards,” Urban Wire (blog), Urban Institute, April 2, 2015, https://www.urban.org/urban-wire/four-million-mortgage-loans-missing-2009-2013-due-tight-credit-standards.
Fannie Mae, “Fannie Mae Introduces New Underwriting Innovation to Help More Renters Become Homeowners,” news release, Aug. 11, 2021, https://www.fanniemae.com/newsroom/fannie-mae-news/fannie-mae-introduces-new-underwriting-innovation-help-more-renters-become-homeowners; Freddie Mac, “Freddie Mac Takes Further Action to Help Renters Achieve Homeownership,” news release, June 29, 2022, https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-takes-further-action-help-renters-achieve; Freddie Mac, “Freddie Mac Announces Underwriting Innovation to Help Lenders Qualify More Borrowers for a Mortgage,” news release, Oct. 17, 2022, https://freddiemac.gcs-web.com/news-releases/news-release-details/freddie-mac-announces-underwriting-innovation-help-lenders; U.S. Department of Housing and Urban Development, “Federal Housing Administration Expands Access to Homeownership for First-Time Homebuyers Who Have Positive Rental History,” news release, Sept. 27, 2022, https://www.hud.gov/press/press_releases_media_advisories/HUD_No_22_187.
Editor’s note: This brief was updated July 3, 2023, to recognize the peer reviewers and Pew staff members who contributed to its development.
**We’ve updated this post below with some of the best Black Friday weekend sales and deals to get your holiday shopping started right!!**
With our Nikes laced up and game faces on, we’re feeling ready to tackle the craziest shopping day of the year – are you?? Now we know the holiday season is all about giving unto others, but before we reveal our gift guides to help you pick the perfect present for everyone else, we fully encourage snagging a little treat for yourself. With such good deals out there, it’s so hard not to!
I’ve narrowed my list down to only the very best which is so hard to do when we’re constantly coming across amazing finds!. But I have my eyes on the prize: my ultimate Black Friday Wish List!
Get your shop on: 1 // 2 // 3 // 4 // 5 // 6 // 7 // 8
I’d love to treat myself to a new bag my fall tote is looking a little worse for wear & can you really ever have too many!. But these Matchstick Bracelets how awesome are they!? would be a rather fun new accessory to rock at holiday happy hours. Then again, the Rachel Comey bootie is an absolute staple and this gray color is so fresh for winter…hmm, decisions, decisions.
I have no shame – I will slip my wishlist to everyone around the Thanksgiving table tomorrow. I’ll let you in on a secret: the best time to ask for things is when people are drunk full, merry and in the giving mood!
What are you hoping to get your hands on this Black Friday? If you’re not in the market for a t.v. you must line up for the night before, I’d be happy to talk you into this limited edition watch– come to mama!
I hope this little guide has wet your whistle – there will be plenty more where this came from after we recover from post-Turkey food comas. And if you just can’t wait for Friday’s deals, you’re in luck. Here are some discount codes to keep you busy shopping today, tomorrow when you need a break from crazy family! and through the weekend!
SHOP THESE BLACK FRIDAY SALES NOW:
Gap: 50% off Friday only with code BLKFRIDAY Love this jacket! Madewell: 25% off purchase with code FEAST25 Need one of these this season! J.Crew: 30% off with code HOLIDAY The IT tee for a fashionista! Banana Republic: 40% off Friday only with code BRGIVINGThis is such a great stocking stuffer! Bloomingdales: Up to 50% off The perfect plaid! Matches Fashion: Up to 30% off select items with code BLKFR30 Lusting for these! French Connection: 30% off entire purchase with code W13COUPON Joie: Spend $250, save 20% off These look so comfy! Nordstrom: 25% off on select brands Sole Society: 33% off jewelry, handbags and shoes! Serena & Lily: 20% off of everything plus free shipping with code THANKS20 The most adorable gift for an expecting mother or baby! Zhush: 20% off with code BLACKFRIDAY
Here’s to a fun-filled and fabulous giving and receiving season!!