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Higher interest rates are increasing pressure on homebuyers who are already facing a challenging housing market. Many would-be buyers are understandably putting purchasing plans on hold, but there are no signs mortgage rates will drop significantly in the near future, and there are some sensible steps to take if you want to become a homeowner soon.
Mortgage rates surged past 7% for the first time this year on April 18 and continued to climb last week. According to Freddie Mac’s benchmark survey, the rate on a 30-year, fixed-rate loan is averaging 7.17% — more than half a percentage point higher than at the start of the year. And the upward trend may not be over.
Len Kiefer, Freddie Mac’s deputy chief economist, says it’s hard to predict just how much higher rates could rise, given the volatility in the market. A lot depends on data regarding inflation, which is proving to be stickier than everyone hoped for, and market expectations as to when the Federal Reserve will start cutting short-term interest rates.
“Given the current [economic] trajectory we’re on, it’s looking like there’s still some upward momentum,” Kiefer says. “In the very near term, we’ll probably see these rates be at the current level or a little bit higher.”
Most early-year forecasts predicted that mortgage rates would start moving in a slow downward trend throughout the year. While those outlooks seemed to be on the money during the first two months of the year, the opposite has been true in recent months.
According to Bob Smith, head of real estate for Advisor Credit Exchange, for at least the remainder of the year, “Rates are going to be bounded in a range . . . probably in the 6%s, low 7%s.”
It’s unclear when inflation will finally be under control, meaning mortgage rates will probably remain volatile for a while before settling down.
In the long term, Kiefer and Smith see inflationary pressures easing later this year. That should help nudge mortgage rates lower — just “not as much as we had thought,” Kiefer says.
High mortgage rates are hitting buyers right in the middle of the spring buying season. According to Freddie Mac, about 36% of all home sales take place between March and June, making these months the busiest time in the housing market.
Elevated mortgage rates, combined with high home prices and a lack of enough inventory to meet buyer demand, have led to record-high monthly payments. Homeowners insurance costs are at all-time highs as well, up 20% in the past year. These factors are pushing many would-be buyers to put their plans on hold. According to a report by BMO Financial Group, 71% of would-be homebuyers are waiting for rates to drop before buying a house.
Potential home sellers are also feeling the crunch, especially those who bought when rates were much lower. The cost of obtaining a new mortgage at a higher rate is keeping owners locked into their homes.
Despite the challenges, buyers shouldn’t panic. “Rates are, for a large part, temporary. At some point, [they] will go down,” says Scott Bridges, chief CDL production officer at lender Pennymac.
Instead of worrying about things that are out of your control, it’s best to focus on the fundamentals of homebuying to see if purchasing a home right now is the right move (regardless of the rate). Here’s what you can do:
Check your credit score and try to improve it while you’re shopping for a home. Buyers with better credit generally have access to lower mortgage rates. On the other hand, taking on extra debt during this time will reduce your score as well as your debt-to-income ratio, which will cause lenders to offer a higher interest rate on a mortgage. “When rates are higher, every bit of debt counts,” says Bridges.
Higher mortgage rates could move some buyers out of the market, which means more opportunities and less competition for those who can afford to buy. Don’t be afraid to lowball a little bit. With fewer buyers, you may be able to negotiate a lower price or concessions with a motivated seller.
Ideally, you’ll find a move-in ready home that fits your budget. The reality is that homes requiring little to no work attract a lot of attention and you may find yourself in a bidding war. Don’t be afraid to look for homes that may need some TLC. The asking price is likely more negotiable, and you may find you can use the money you save to fix up the home to your taste.
Set a budget you’re comfortable with. Use a housing affordability calculator to get an estimate of how much you can pay towards a home purchase. You can also get loan estimates from several different lenders to find the best rates and loan terms. And remember, the maximum amount a lender is willing to lend isn’t necessarily what you should spend on a home. Set a lower budget if it makes better financial sense or if you want to have some wiggle room if you have to compete against other buyers.
A house is likely the most amount of money you’ll ever spend. Bridges says that homebuyers typically make mistakes when they rush the process. Take the time to inspect the property and ask to see a home appraisal. Make sure it’s the right fit for your needs at the right price for you.
“Try to do things patiently,” says Bridges. “Don’t overpay, and don’t panic.”
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Source: money.com
Ocwen Financial Corp., parent company of PHH Mortgage Corp. and Liberty Reverse Mortgage, reported an overall improvement in its business performance for the first quarter of 2024 — including better reverse mortgage performance attributed to servicing and higher gains on loans held for sale.
Under generally accepted accounting principles (GAAP), Ocwen reported GAAP net income of $30 million or diluted earnings per share of $3.74, which company CEO Glen Messina characterized as the “highest level in six quarters.” It was driven primarily by improvements in servicing and origination. In Q4 2023, the company reported a GAAP net loss of $47 million.
On a Thursday earnings call, Ocwen leadership touted the company’s reverse mortgage division maintaining a top-five position among the leading lenders in the country, as well as continued positive performance of its forward and reverse mortgage servicing operations.
“Reverse servicing increased its profitable contribution with higher gains on loans held for sale, even as volume contracted,” said Sean O’Neill, Ocwen’s chief financial officer. “Underlying the strong results is the ongoing effort on continued cost improvements, driven by technology […] and traditional process improvements across both forward and reverse servicing, as well as lower advances on our legacy book, which have decreased 14% year over year.”
The company’s origination segment also returned to profitability, O’Neill said, despite challenges presented by persistently high mortgage rates and a contraction in reverse mortgage volume.
“Despite rising rates, further depressing seasonally low origination volume, we are pleased to say all of our channels returned to profitability in the quarter,” he said. “Higher margins on lower volumes drove the profitability, with reverse origination seeing the largest improvement. Lower profits and correspondence were offset by gains in reverse and bringing consumer direct back to break-even.”
Company leaders also said they will prioritize capitalizing on asset management opportunities to further grow the servicing portfolio, including for reverse mortgages.
“We also continue to dynamically manage our owned MSR portfolio to capitalize on differing views of market values amongst top market participants. As always, we remain flexible and committed to considering all options in this dynamic market to maximize value for shareholders,” Ocwen CEO Glen Messina said.
Initially announced in early April, Messina made reference to the company’s rebranding initiative, which will touch on all of its subsidiaries. The company will be known as Onity Group Inc., and the change will roll out to the PHH and Liberty divisions later in the year.
“Concurrent with our name change, we will begin trading on the New York Stock Exchange (NYSE) under the new symbol ONIT,” Messina said. “Our primary operating brands, PHH Mortgage and Liberty Reverse Mortgage, will retain their names at this time. We expect to rebrand PHH and Liberty to Onity Mortgage later this year. We’re excited about this new chapter for the company and we look forward to operating under the Onity brand.”
A company spokesperson previously told RMD that the rebrand is subject to shareholder approval. Once it is secured, the new NYSE symbol will begin to be used. Shareholders will have the chance to vote on the initiative at their annual meeting on May 28
A timeline for the name change’s application to Liberty and PHH was not specified outside of “later” in 2024.
According to Home Equity Conversion Mortgage (HECM) endorsement data compiled by Reverse Market Insight (RMI), Liberty was the fourth-largest reverse mortgage lender in the country with 1,363 endorsements during the 12-month period ending in April 2024.
Source: housingwire.com
Citibank is one of the four largest U.S. banks by assets, and compared with the other three, it offers more types of CDs. The CDs’ opening minimum of $500 is on the lower end. But Citibank doesn’t have the highest CD rates, which are mostly at online banks and credit unions.
Citibank offers three types of CDs, all with a minimum deposit of $500:
Standard (or fixed-rate) CDs: These high-yield CDs have a fixed rate and are subject to early withdrawal penalties.
No-penalty CD: These no-penalty CDs have a fixed rate and the added benefit of no early withdrawal penalty, meaning you can withdraw the full amount any time after the first six days without cost.
Step-up CD: These step-up CDs have fixed rates with two scheduled rate increases. The CDs are subject to early withdrawal penalties.
Marcus by Goldman Sachs High-Yield CD
1 year
Discover® CD
1 year
Here’s a list of most Citibank rates:
3-month CD |
0.05% APY. |
6-month CD |
4.75% APY. |
9-month CD |
3.75% APY. |
2.75% APY for balances below $100K. 2.00% APY for balances of $100K and above. |
|
1-year no-penalty CD |
0.05% APY. |
15-month CD |
4.00% APY. |
18-month CD |
2.00% APY. |
2.00% APY. |
|
30-month step-up CD |
0.10% APY (Composite APY of three rates.) |
2.00% APY. |
|
2.00% APY. |
|
2.00% APY. |
|
*Rates listed are for New York. Rates may vary by location. |
Minimum deposit |
|
Range of CD terms |
3 months to 5 years. |
Early withdrawal penalty |
|
Other fees |
None, which is common for CDs. |
Grace period |
See grace periods by bank. This period is the time between a CD’s maturity date and its automatic renewal for a new term if the CD isn’t cashed out. |
Types of account ownership |
|
Want to compare CD details?
View a curated list of nine CD reviews to see all rates, minimum requirements and other details at online and traditional banks and one brokerage.
Explore CDs
on NerdWallet’s secure site
CD rates are fixed. If you open nearly any Citibank CD today, its annual percentage yield will stay the same until the CD expires. The exception for Citibank is its step-up CD, offered for a 30-month term, which has two built-in rate increases.
Be aware of two common rules with CDs: You can’t make partial withdrawals or add additional funds after depositing money into a CD. Withdrawals of interest already earned are allowed for standard and step-up CDs, but not no-penalty CDs.
You lose interest if you withdraw early. CDs are built to keep your money out of sight, out of mind. If you dip into almost any Citibank CD before it expires, there’s an early withdrawal penalty, which means losing some or all of the interest you earned. There is one exception in Citibank’s case:, its 12-month no-penalty CD. (Compare this with other no-penalty CDs.)
Interest accrues in a CD during the term, so you can benefit from compound interest. Alternatively, you can request to receive interest during the term to an external account or by check.
CDs auto renew unless you opt out. In addition, no-penalty and step-up CDs automatically renew into standard CDs of the same term length as the original CD. To avoid renewal, withdraw during the grace period.
Compounding frequency doesn’t often help you compare rates. Like a savings account, a CD’s rate is primarily quoted as an annual percentage yield (APY), meaning the annual interest rate that factors in compounding. You can compare two interest rates with different compounding periods using APY. Alternatively, if you only know a CD’s interest rate, you need to know the compounding frequency — often daily or monthly — to estimate your return. Learn more about APY vs. interest rate.
Compare the best rates for various CD terms and types:
Learn more about choosing CDs, understanding CD rates, and opening and closing CDs.
For choosing CDs:
For understanding CD rates
For opening CDs
For closing CDs
See CD rates by bank
Here’s a quick list of CD rates at traditional and online banks and a brokerage:
The information related to Citi certificates of deposit has been collected by NerdWallet and has not been reviewed or provided by the issuer or provider of this product or service.
Source: nerdwallet.com
Housing experts say mortgage rates are likely to hover in the 7 percent range in May, amid elevated inflation that is keeping the Federal Reserve from reducing borrowing costs.
The high cost of home loans may keep buyers at bay as they await the decline of rates before they can make the leap toward homeownership.
Read more: Find the Lowest Rates From Top Mortgage Lenders
The Federal Reserve raised interest rates starting in March 2022 to its current two-decade high of 5.25 to 5.5 percent, a move geared to fight soaring inflation. This contributed to the push-up of borrowing costs, including for home loans. Inflation is still struggling to cool down to the 2 percent central bank target, which has forced policymakers to retain the high interest rate environment.
The 30-year fixed rate, for the week ending April 19, rose for the third week in a row to 7.24 percent—the highest level since November 2023.
Economic data, particularly around inflation, have come in higher than expected over the last few weeks. In March, inflation jumped to 3.5 percent on a yearly basis, up from 3.2 percent the prior month.
Unless inflation surprises in the coming weeks, mortgage rates are likely to stay in the 7 to 7.5 percent range, according to Realtor.com’s chief economist Danielle Hale. Fed policymakers are set to conclude their latest meeting on May 1, and they are unlikely to change their current stance on rates.
“Of all the data, I think that the inflation, specifically the [Consumer Price Index] out May 15, will have the biggest impact,” Hale told Newsweek. “Inflation and labor market data has come in higher and hotter than expected. This change in the data, which is driving a change in the outlook, has pushed interest rates, including mortgage rates, higher across the board.”
Read more: How to Get a Mortgage
High mortgage rates will depress buyers’ ability to buy homes.
“I expect homebuyers to approach the housing market more tepidly, and sales will reflect that trend,” Hale told Newsweek.
Orphe Divounguy, a senior economist at Zillow Home Loans, echoed Hale’s perspective on what will drive mortgage rates as inflation remains elevated.
“The fact that government borrowing remains high relative to demand for U.S. Treasury bonds is likely to continue to push yields—which mortgage rates follow—elevated,” he told Newsweek. “Looking into May, we can expect more rate volatility as investors and the Fed wait for more conclusive evidence of a return to low, stable and more predictable inflation.”
Buyers are still likely to be waiting for rates to fall but the key to the trajectory of rates will be how inflation performs over the coming months, said Holden Lewis, a home and mortgage expert at NerdWallet.
“Inflation remains stubbornly above the Fed’s target of 2 [percent], and mortgage rates won’t fall significantly until the inflation rate consistently drops for multiple months in a row,” Lewis told Newsweek. “Potential home buyers are holding back and waiting for mortgage rates to decline. The slowdown in home sales will allow the inventory of unsold homes to increase. That won’t stop home prices from going up, but it might slow down the pace of home price increases this summer.”
In May, policymakers from the Fed will reveal their latest rate decision and provide insights on the trajectory of borrowing costs. Also in May, the CPI inflation data reading for April will give insight into how prices are performing, which will give a signal to how rates might unfold over the next few weeks.
For the housing market, one silver lining may come from buyers who have to acquire homes due to personal situations.
Read more: How to Buy a House if You Have Bad Credit
“Purchases are likely to be dominated by movers who feel like they don’t have a choice to wait out higher rates, but rather, they have to move now for personal reasons,” Hale said.
Zillow’s Divounguy suggested that with mortgage rates expected to stay high, lower-priced homes could see escalated competition.
“We continue to expect significant competition this spring, especially for attractive listings on the lower end of the price range. New construction homes are selling well too; they’re available, and builders are offering financial incentives—such as rate buydowns and covering closing costs—to potential home buyers,” he said. “Remember, higher rates mean the home price a buyer can afford is lower, so if you’re shopping for a home in the mid-tier or lower, it’s best to assume you’ll run into some competition.”
Hale suggested that sellers, who can also be buyers, enter the housing market.
“With 80 [percent] of potential sellers having thought about selling for 1 to 3 years, it could be that higher rates are less of a deterrent this year than in the recent past,” she said.
The perspective from lenders appears to be that the 10-year treasury yields, currently at around 4.7 percent, will drop in the coming weeks to 4 percent and narrow the difference between mortgage rates and treasury rates.
“We expect the spread will tighten further by the end of 2024. The combination implies a 30-year fixed mortgage rate mostly unchanged in the coming weeks but eventually moving closer to 6.5 percent by the end of 2024,” Joel Kan, Mortgage Bankers Association’s deputy chief economist, told Newsweek.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Source: newsweek.com
Having children brings many joys. But for women, it can also have a financial dark side. Becoming a mother often results in a loss of pay and opportunities for career advancement, a phenomenon known as the motherhood penalty. In fact, women experience a 60% decrease in income compared to men in the decade after their first child is born, according to PricewaterhouseCoopers’ 2023 Women in Work Index.
Many factors contribute to the motherhood penalty, and not every woman experiences it in the same way. Understanding the motherhood penalty can help women — and their families — sidestep this financial setback.
If you want to avoid the motherhood penalty and keep your budget on track, it pays to know your enemy. According to a 2023 article published in the scientific journal PNAS, women’s diminished earnings after the birth of a child is driven by both a reduction in employment and by lower earnings for those who remain employed. Let’s look at each of these factors.
Despite the fact that women today have achieved historic levels of education and are working at senior levels in the corporate world, they are still more likely than men to cut back on their working hours or stop working altogether after a baby is born. Some women may choose jobs that allow for more flexibility in hours even if those roles pay less.
Discrimination is a more insidious factor: Women make up nearly half of all U.S. workers and do the bulk of consumer spending, yet some hiring managers still believe that women’s earnings are not as critical as men’s for household support. (A quick look at any parent’s money tracker app would reveal just how untrue this stereotype is.) When two women are similarly qualified for a job, the one without children tends to earn more than the one who has kids. And when men and women hold similar positions, fatherhood seems to confer a salary advantage in many occupations.
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Dual-income households have been the norm among married couples for decades, and most households composed of married couples with children have two working parents, according to 2023 data from the Bureau of Labor Statistics. Families with two healthy incomes are most likely to be able to afford a home, and to be able to cover other large expenses, including the cost of kids. (A 2022 report from the Brookings Institution suggests that the average middle-income family today will spend more than $310,000 to raise a child to age 17.)
But the motherhood penalty takes an especially hard toll on families led by women. According to the 2023 Census, 21% of U.S. children are growing up in a household led by a single mother, who often has no other source of income than her own earnings. The motherhood penalty may contribute to the fact that nearly 30% of single-parent families are living below the federal poverty level.
As noted above, the unspoken ideas that women belong at home caring for their children, or that women are not vital contributors to their family finances, continue to be a driver of the motherhood penalty. This is despite the fact that households where two parents work outside the home is now the norm in the U.S.
But there is another troubling scenario. Women may leave their job because childcare costs more than they earn. The cost of caring for an infant in a childcare center averages $15,417 per year per child. In big cities, the number climbs even higher: Washington, D.C. averages $24,243, for example. And even when women don’t stop working, they may scale back their hours, or take more flexible but less well-paid positions.
The motherhood penalty is unfair, and one additional factor adds to the unfairness: In households with two working parents, where each parent earns roughly the same amount, women still spend more time on caregiving responsibilities than men do — 12.2 hours per week on average, compared with 9 hours for men, according to a 2023 Pew Research Center report. Women also spend 4.6 hours doing housework to men’s 2 hours. Women’s work may be valued less, but as the old saying goes, it’s never done.
Recommended: Pros and Cons of Salary vs Hourly Pay
So what can women do to safeguard their finances from the motherhood penalty?
Consider your career choice. Women can begin to protect their financial future while they are still contemplating a career path. Some research suggests that the motherhood penalty disappears for mothers who work in business and post-secondary education. And in STEM careers, and fields such as medicine and law, mothers actually appear to earn more than women who don’t have kids.
Stand up for fair earnings. Exercise your right to be fairly compensated with every step you take in the working world. Applying for a job? Do your research to learn what is a good entry-level salary. Offered a position? Learn how to ask for a signing bonus — with unemployment relatively low, employers in industries from retail to engineering may pay you to come on board.
Change jobs. Women may be less likely to change jobs after becoming mothers, as switching jobs can be stressful and time off is often allotted based on seniority. Yet changing jobs is one way to bump up your salary. When you do switch, make sure you understand what is a competitive pay rate. A growing number of states, including California, Colorado, and New York, have passed pay transparency laws that require employers to post salary ranges when they advertise job openings.
Don’t share your status. It’s unlikely that you’ll be asked during a job interview if you have caregiving responsibilities, as doing so may violate federal and state laws. But many women casually disclose that they are parents during the interview process without thinking twice about it. Avoid talking about your personal life when interviewing for a job and consider that many employers examine applicants’ social media feeds during their screening process.
Advocate for fair pay and families. Research suggests that moms in women-dominated and low-paid professions face the greatest motherhood penalty. To help promote equitable pay that can sustain families, you can support raising the minimum wage. Lifting your voice in favor of government support for affordable childcare and for mandatory paid parental/caregiver leave can also help ensure that women who want to stay in the workforce after having a child can afford to do so.
Despite the fact that women are working outside the home in historic numbers, the motherhood penalty still exacts a perilous price for many women and their families. Acknowledging that women are financially penalized for becoming parents is a first step in fighting back against the stereotyping and discrimination that is often at the root of this problem.
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The motherhood penalty refers to the fact that women’s earnings suffer after they have children, sometimes due to discrimination in hiring or the awarding of promotions, and sometimes because women scale back on work or stop working altogether after having a child.
The motherhood penalty results in lower earnings, and because future earnings are often based on current salary, the diminishment in income often persists as a woman progresses up the ladder.
A primary way to avoid the motherhood penalty is to know your worth. Do your research on salary before taking a job, and reevaluate your salary at least yearly by looking at comparable positions.
Photo credit: iStock/Pekic
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Iowa provides residents a quintessential American experience characterized by its rich agricultural heritage, tight-knit communities, and scenic landscapes. From the vibrant urban energy of Des Moines, with its thriving arts scene and culinary delights, to the charming small-town charm of Iowa City, home to the University of Iowa and a bustling cultural scene, Ohio offers experiences for every lifestyle. However, there are cons to living in In this state. In this ApartmentGuide article, we’ll go over the pros and cons of living in Iowa, so you can learn what life is like in “The Hawkeye State.”
Iowa has an affordable cost of living, with lower housing costs, utilities, and overall expenses compared to many other states. Cities like Des Moines and Cedar Rapids offer residents access to affordable housing options, with median home prices and rental rates below the national average. For example, the median home price in Cedar Rapids is $182,500, making homeownership more attainable for many Iowa residents. Rental prices remain equally affordable, with the average one-bedroom apartment renting for $776.
Iowa experiences harsh winter weather conditions, with cold temperatures, heavy snowfall, and icy roads posing challenges for residents. Sioux City often contend with extreme cold snaps and blizzard conditions, leading to school closures, transportation disruptions, and safety concerns. Despite efforts to maintain roadways, winter storms can make travel hazardous, meaning you’ll need extra precautions navigating the icy terrain.
Iowa’s thriving agricultural sector plays a vital role in the state’s economy, providing abundant job opportunities and contributing to the nation’s food supply. The state’s fertile soil and favorable climate make it ideal for farming, with crops like corn, soybeans, and oats grown extensively across its vast farmland. Additionally, Iowa is a leading producer of corn and hogs, with agricultural activities deeply ingrained in its cultural identity.
Residents in rural areas of Iowa may experience feelings of isolation and limited access to services and amenities. Towns like Decorah and Carroll may lack the same level of infrastructure and resources found in larger cities, leading to challenges in accessing healthcare, shopping, and entertainment options.
Iowa has a rich cultural heritage, shaped by diverse immigrant communities and indigenous peoples who have left their mark on the state’s history. For example, the Amana Colonies preserve the traditions of German settlers, while the Meskwaki Settlement honors the heritage of the Sac and Fox Tribe of the Mississippi.
While Iowa offers some cultural attractions and events, larger cities in other states may have more extensive entertainment options. Cities like Waterloo may have fewer theaters, museums, and performing arts venues compared to metropolitan areas, limiting cultural experiences for residents.
Iowa is home to diverse natural landscapes, including rolling prairies, scenic rivers, and picturesque parks, offering residents ample opportunities for outdoor recreation and exploration. Places like Maquoketa Caves State Park and Effigy Mounds National Monument showcase Iowa’s natural beauty, attracting visitors with hiking trails, camping grounds, and wildlife viewing areas.
Within Tornado Alley, Iowa is prone to severe weather events like tornadoes during the spring and summer months. While tornado warning systems and emergency preparedness efforts help mitigate risks, residents must remain vigilant and have a plan in place to seek shelter during severe weather outbreaks.
Iowa’s relatively low population density results in minimal traffic congestion, making commuting and travel more efficient and stress-free for residents. Even in urban areas like Iowa City, residents enjoy shorter commute times and smoother traffic flow compared to larger metropolitan areas.
Iowa’s changing seasons can exacerbate allergies for some residents, particularly during the spring and fall. Pollen from trees like birch and oak can trigger allergic reactions, leading to symptoms such as sneezing, congestion, and itchy eyes.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
Source: apartmentguide.com
So where does this leave us? Let’s look at my labor economic model that started on April 7, 2020, and see where are we today.
1. The current state of the labor market results from a series of events, with COVID-19 being a significant catalyst. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.
2. During the early stages of the labor market recovery, when we observed weaker job reports, I remained steadfast in my belief that job openings would reach 10 million in this recovery. Despite the unexpected job report in May 2021, I was confident in the recovery trajectory. Job openings reached as high as 12 million and are now at 8.5 million. Today the labor market is less tight, but the Fed would love to see this number even lower, down to 7 million.
Currently, the job opening quit percentage and hires data are below pre-COVID-19 levels. We are getting closer to having a single handle on this data, which, when coming from an elevated level, means any Fed member talking about a tight labor market is smoking some good stuff.
3. I wrote that we should get back all the jobs lost to COVID-19 by September 2022. This would be a speedy labor market recovery but it happened right on schedule.
4. This is the key one right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, based on the job growth rate in February 2020. Today, we are at 158,286,000. This is vital because given this level, job growth should be cooling down now. We will be more in line with where the labor market should be when the average is 140,000 to 165,000 monthly.
Today’s job print of 175,000 is still above my target level for where jobs should be and we are getting closer to that 159 million total nonfarm payroll number. I will be shocked if we are still trending above 165,000 per month once we break over 159 million total employed people. With that said, the labor market is still outperforming my model.
Looking at the six-month average of job-growth data, we are running at 242,000, even with all the revisions. I am still above my 165,000-per-month level, but we are heading in that direction.
From BLS: Total nonfarm payroll employment increased by 175,000 in April, and the unemployment rate changed little at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in social assistance, and in transportation and warehousing.
Here are the jobs that were created and lost in the previous month:
In this jobs report, the unemployment rate for education levels looks like this:
A critical part of this report is that wage growth is cooling down, which is key to many of the Federal Reserve’s concerns. The Fed likes a 3% wage growth trend because they believe productivity is 1%. As you can see below, wage growth is continuing to head in that direction.
We now have multiple data lines that show the labor market isn’t as tight as it once was. The Federal Reserve is now considering this since they have been talking more about their dual mandate as opposed to just being a single mandate Fed. This is positive for mortgage rates because once they pivot, we can see a more sustained move lower in rates instead of what we have had to deal with since 2022. We still have some work to get wage growth back down to a 3%-3.5% level, but it’s at least heading that way.
Source: housingwire.com
Rates have been in retreat as bond market investors who fund most mortgage loans react to the latest economic news and scaleback in tightening by Fed policymakers.
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Mortgage rates retreated for the third day in a row Friday as the latest numbers from the Labor Department showed employers added fewer jobs than expected in April, pushing unemployment closer to 4 percent, a level not seen in more than two years.
The U.S. economy added 175,000 jobs in April, down from 315,000 in March and the most anemic growth since October 2023. Economists had expected April employment growth of 240,000 jobs.
The report came on the heels of Wednesday’s announcement by Federal Reserve policymakers that they intend to slow the pace of “quantitative tightening” — an unwinding of the central bank’s $7 trillion balance sheet — to $40 billion a month, less than half the pace envisioned two years ago.
Change in employment, by month. Red bars are the latest forecast, including revisions to previous estimates for February and March. Source: U.S. Bureau of Labor Statistics.
“This report is nothing like bad enough to trigger a wholesale rethink at the Fed, but things will be different if the July numbers are weaker still, as we expect,” economists at Pantheon Macroeconomics said in a note to clients. “The downshift in payroll growth has come exactly when the [National Federation of Independent Business] suggested it would, and the signal for the future is unambiguous.”
Futures markets tracked by the CME FedWatch Tool last week predicted that the odds were against the Fed making more than one 25-basis point rate cut this year. On Friday, investors had repositioned their bets in line with expectations that there’s a 61 percent chance of two or more Fed rate cuts by the end of the year, with the first move now expected in September rather than December.
Pantheon economists are sticking to their forecast that the central bank will bring the federal funds rate down by a full percentage point, starting in September.
“Businesses — especially small firms — are responding to the lagged effect of the huge increase in interest rates and the tightening in lending standards, which have made working capital much more expensive and harder to obtain,” Pantheon economists said. “At the margin, this is depressing hiring and lowering the bar to layoffs.”
Unemployment, which dipped below 4 percent in February 2022, is once again flirting with that level, hitting 3.9 percent in April, up half a percentage point from a year ago.
The Fed doesn’t have direct control over long-term rates, but bond market investors who fund most mortgage loans are reacting to this week’s news.
Yields on 10-year Treasurys, which often predict trends in mortgage rates, fell 7 basis points Friday to 4.50 percent, a 25-basis point drop from the 2024 high of 4.75 percent registered on April 25.
Surveys of lenders by Mortgage News Daily showed rates for 30-year fixed-rate loans dropping for a third day in a row Friday, to 7.28 percent, down 24 basis points from a 2024 high of 7.52 percent, also registered on April 25.
Data tracked by Optimal Blue, which lags by one day, showed borrowers were locking in rates on 30-year fixed-rate mortgages Thursday at an average rate of 7.21 percent, down 6 basis points from the 2024 high of 7.27 percent recorded on April 25.
Borrowers taking out jumbo loans have seen spreads over conventional mortgages widen as higher interest rates and defaults on commercial loans weigh on regional banks that are often the source of those loans.
The rates published by Mortgage News Daily (MND) are higher than those reported by Optimal Blue because MND’s rate index is adjusted to account for points that borrowers often pay to get a lower rate. Optimal Blue uses actual rates provided to borrowers for rate locks, whether they paid points or not.
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Source: inman.com
Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful. The article was reviewed, fact-checked and edited by our editorial staff prior to publication.
Buying a home doesn’t necessarily require a large down payment. The conventional wisdom is that you need 20 percent down, but in reality, you don’t have to save that much. In fact, there are no-down payment mortgage options. Here’s what you need to know about these types of loans.
A no-down payment mortgage is a home loan that allows you to finance 100 percent of the home’s purchase price without having to put any money down at closing. Zero-down mortgages can be particularly beneficial for those buying a home for the first time or with limited savings.
The easiest way to avoid a down payment is to qualify for one of the two no-down payment mortgage programs backed by the government: a USDA or a VA loan.
The U.S. Department of Agriculture (USDA) backs USDA home loans, a mortgage guarantee program for those buying a home in designated rural areas. There are many areas you might not consider “rural” that do qualify under USDA guidelines, so be sure to check your eligibility on the USDA website. USDA loans don’t require a down payment, but borrowers must meet credit and income requirements to qualify.
Although there’s no down payment with a USDA loan, there is an upfront guarantee fee of 1 percent of the principal loan amount, as well as an annual fee of 0.35 percent, which borrowers can roll into the cost of the mortgage. While you won’t pay any money initially if you choose to roll these fees into the loan, keep in mind that it adds to the total balance and will accrue interest over the loan term, which means you’ll pay more overall.
If you’re a military service member, veteran or surviving spouse, you could be eligible for a VA loan guaranteed by the U.S. Department of Veterans Affairs (VA) with no money down. There is no mortgage insurance requirement with this loan. However, like a USDA loan, you do have to pay an upfront funding fee, which can be rolled into the mortgage. The funding fee ranges from 1.25 percent to 3.3 percent of the loan amount. You can reduce the funding fee by making a down payment.
Another perk: VA loan lenders often offer more competitive rates for these products, which helps you save money over the life of the loan.
Compare: Current VA loan rates
In addition to government-backed loans, you might be able to explore:
If you don’t qualify for one of the no-money-down home loan options, you might still be able to buy a home with the next best thing: a low-down payment mortgage.
Insured by the Federal Housing Administration (FHA), an FHA loan requires only 3.5 percent down with a credit score as low as 580. (If you have a credit score between 500 and 579, you might be able to qualify with a higher down payment of 10 percent.) It’s a popular option for homebuyers with less-than-perfect credit and not a lot of savings. Like other government-insured programs, FHA loans are offered by private mortgage lenders, so you might also have to meet a lender’s criteria to qualify. Additionally, you’ll have to pay for FHA mortgage insurance, which adds to your monthly payment and the cost of the loan. You’ll pay these premiums for as long as you have the mortgage, in most cases.
Compare: Current FHA loan rates
Available through many mortgage lenders, the HomeReady program is a conventional loan backed by Fannie Mae. The down payment requirement on a HomeReady loan is just 3 percent. While you’ll have to pay mortgage insurance to compensate for the low down payment, it’s often at a lower price tag compared to other conventional loans.
Backed by Freddie Mac, Home Possible is a similar mortgage program to HomeReady, with a 3 percent down payment and mortgage insurance requirements.
Freddie Mac also offers a 3 percent down mortgage option for first-time homebuyers who qualify through its HomeOne program. The main difference between this loan program and Freddie’s Home Possible mortgage is that a HomeOne mortgage does not impose income limits.
Some lenders are now offering mortgage programs for borrowers who qualify that only require a 1 percent down payment. Some examples include Rocket Mortgage’s ONE+ program and United Wholesale Mortgage’s Conventional 1% Down program. For these programs, the lender pays 2 percent of the required 3 percent down payment for a HomeReady or Home Possible loan — or up to a maximum contribution that varies by lender and loan size — and you only need to provide the remaining 1 percent.
A Conventional 97 mortgage is another Fannie and Freddie program that only requires a 3 percent down payment. You might pay more for private mortgage insurance (PMI) with this type of loan, but your payment depends on your financial profile. You can also request to cancel PMI when you reach 20 percent equity in your home.
The Good Neighbor Next Door (GNND) program is for borrowers who work in select public service professions — teachers, firefighters, law enforcement and emergency medical technicians — and are planning to buy a home in a qualifying area.
The program, sponsored by the U.S. Department of Housing and Urban Development (HUD), provides a discount of up to 50 percent on a home with a down payment of just $100. The borrower must qualify for a first mortgage, and the discounted portion of the home comes in the form of another loan. If the borrower continues to meet program requirements, the second mortgage won’t have to be repaid.
The ability to buy a home with no or very little money down can be appealing, but there are drawbacks, too.
Deciding whether to go for a no-down payment mortgage depends largely on your financial circumstances and goals. Here are a couple of scenarios when a zero-down mortgage might be a good idea:
The Department of Veteran Affairs and the U.S. Department of Agriculture DA don’t set a minimum credit score requirement for, respectively, their no-money-down VA and USDA loans. However, most lenders offering these loans do, and they’d want them to be at least in the “fair” range: 620 for VA loans, 640 for USDA loans. Because you’re not bringing any cash to the table, and financing virtually all of your mortgage, the lender has to be extra-reassured that you pay your debts fully and on time.
Source: bankrate.com
It’s no secret that dating can be expensive. Be it fancy dinners or flowers and gifts, the cost of impressing your date can add up quickly.
But spending more doesn’t always correlate with a successful date—or relationship, for that matter. In fact, sometimes cheap date ideas are more effective at creating connections and leading to long-lasting relationships. Here are a few fun cheap date ideas that can fit any budget.
Whether you’re committed to a strict spending plan or simply want to save more and spend less, figuring out how to date on a budget is completely doable with these tips.
Not setting a budget for dates ahead of time can quickly devolve into overspending. Likewise, coming up with a cute cheap date idea every time can feel like a chore and take the fun out of planning. Instead, try switching between one pricier and one cheap or free date night activity so you’re only spending a sizable amount on half of your dates. This way, you’ll be able to indulge in going out sometimes and still find ways to save money on date night.
Just because something’s half price doesn’t make it any less fun or romantic. Instead of splurging on a three-course meal, consider a happy hour date to score lower-price drinks and appetizers. If you’re in charge of planning the date, there are plenty of free or cheap date ideas to help you have fun while staying within budget.
First impressions matter, so you might find yourself shelling out some cash on a first date. But don’t feel like you need to go overboard to impress your date—here are a couple of fun cheap date ideas that won’t hurt your wallet.
Ditch the Michelin-starred restaurants and eat like a local, meeting at a neighborhood cafe or a popular hole-in-the-wall spot. Opting for cheap eats over formal dining options can help keep the date lighthearted and the vibe relaxed as you’re still getting to know one another.
Another cheap first date idea may come courtesy of your local chamber of commerce or public library. Most cities offer free outdoor activities like concerts and festivals, while libraries often share free or low-cost passes to state parks and local museums.
After you’ve been on a first date (or a few) and you and your partner are both comfortable, you may favor staying in. Save even more with these cheap romantic date ideas you can have at home.
Some cute cheap date ideasat home include visiting a farmer’s market to buy ingredients for a home-cooked meal—and then cooking it together. Or if cooking’s not your strength, keep it simple with a charcuterie board and board game. Host a backyard or rooftop stargazing session to ramp up the romance—bonus points if you align it to a meteor shower or other astronomical event.
As you get to know one another, you may feel ready to take your relationship to the next level. Consider these cheap date night ideas that focus on aligning your financial values to help ensure a long-lasting, happy future.
While maybe not the most exciting idea, reserving one night to figure out plans and set a budget for future date nights is one of the easiest activities you can do. It’s also a great way to ensure you’re both on the same page about how much you want to spend and what activities you’d like to try.
Take a financial personality quiz to see how your beliefs shape your financial behaviors. With a clearer sense of how you both view money, you can better align on things—like how much you want to budget for date nights—without compromising your relationship over money.
If you’re serious about your relationship, discussing your financial future on a regular basis can potentially set your relationship up for long-term success. Establish a regular time to talk about your finances—potentially once a month—and keep it casual. Especially if engagement and marriage are on the table, making a habit of talking about money can ensure your financial aspirations are aligned.
Brainstorming fun cheap date ideas can be a date all on its own, and sometimes, the free activities are the most meaningful. Now is also a great time to think about what you can do with the cash you’re saving and how you might use it for your future together. If you’re planning a more extravagant experience, like a trip or big party, consider putting that money away in a high-yield savings account. With a clear budget and plan for staying on track, you can ensure your cheap date nights are just as rewarding as the pricier nights out.
Once you’ve got your date night budget sorted, check out the features of a Discover® Online Savings Account to see how you can make your money work a little harder for your next big date.
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Source: discover.com