She noted improving homebuilder sentiment on the new-home sales front as cause for optimism, in sharp contrast to an existing-home market that’s unlikely to shift quickly from its current torpor. “The long-term housing shortage, lower mortgage rates, and builders’ ability to offer incentives will help to buoy new single-family sales,” she said. While the so-called … [Read more…]
This interview has been edited for length and clarity.
Flávia Furlan Nunes: How would each administration’s approach to the economy affect the mortgage industry?
Mark Calabria: You’re starting with the absolute most important aspect. While differences in housing mortgage policy are important, the overall driver will be the overall economy — predominantly the question of inflation and jobs. I recognize there are some out there who would argue that Trump will be more inflationary. He will be less, particularly given the experience we’ve had. That’s the benefit: We’ve had four years of Trump and almost four of Biden. There is actual history that compares.
Inflation will be more stable under Trump and you would see a decline in interest rates and mortgage rates more than you would under Biden. That said, of course, we’ve seen an overall decline in interest rates, even if they do remain somewhat high. It should be kept in mind that it doesn’t matter who the president is in 2025; we’re not going back to 3% mortgage rates. The difference between administrations, at most, would be a percentage point.
Nunes: What do you expect for the job market in a Biden or a Trump administration?
Calabria: We are seeing a slowing in the job market, and in Biden 2.0, I would expect the slowing trend to continue. You would see a number of things done in the Trump administration that might put some additional steam back in the job market. But I recognize forecasting is tough here. That said, what you think will happen to inflation and jobs should be 80% of what you think will happen to the housing and mortgage market.
The traditional forecasting community consistently underestimated growth during the Trump years and consistently overestimated growth during the Biden years. I don’t want to get too much of a digression, but the typical macro models used in the forecast community are very much demand-driven. Things like regulation don’t enter their forecast. It’s not that they’re intentionally wrong; it’s just that they’re not capturing the whole picture.
Nunes: On the fiscal front, several provisions from the Tax Cuts and Jobs Act of 2017 are scheduled to expire at the end of 2025, barring action from Congress.
Calabria: Obviously, the corporate fiscal incentives are quasi-permanent. It’s the individual things that come up. With a Trump administration, you’re largely seeing some tweaks and extensions of the 2017 changes, and they certainly are discussing: what can you do in terms of perhaps stimulating the housing market?
One of the things Republicans are looking at, on the tax side, is some indexing, perhaps temporarily, of the capital gains relief that you see in homeownership. It hasn’t changed since 1997. And of course, $500,000 for a couple in 1997 was a lot of money. It’s a lot less now. Both administrations will be looking at tax incentives to reduce lock-in effects in the existing-home sell side. You can debate if one is more effective than the other. The Biden side seems to be more tax-credit driven. My sense on the Republican side? It is probably more likely focused on capital gains.
Nunes: Regarding monetary policy, The Wall Street Journal reported that Trump’s allies are “quietly” drafting proposals in an attempt to erode the Federal Reserve’s independence. What do you have to say about the independence of the Fed under a potential Trump administration?
Calabria: The Fed operates within the government. The Fed coordinates with administrations. The argument that Trump is somehow bringing a threat to the Fed’s independence is grossly exaggerated, if not completely false. I don’t have a lot of sympathy for that argument. My argument is not that there aren’t going to be some questions from the Trump administration about Fed behavior. My argument is, that’s how every administration behaves to some degree. They just do it differently.
Nunes: How do you see a Biden or a Trump administration addressing the affordability challenges?
Calabria: Housing has been subjected to inflationary pressures like the rest of the economy. There’s certainly a view on the Republican side that you could address inflationary pressures writ large. For instance, the same thing that has been driving up gas and grocery prices has impacted cement, lumber or labor prices. So, they’re all caught together to some extent. If you deal with the underlying inflationary issues, that will help with housing affordability. That’s one broader aspect.
When you drill down into what’s likely to happen, you haven’t seen specific proposals. Most of the Biden proposals, even though they’ll put up some pieces of paper that say “housing supply” at the top, 90% of it is housing demand. What is a $10,000 tax credit for down payments but increasing demand? That’s not going to make housing more affordable. It may make housing more affordable to the individual who gets it, but it makes overall housing less affordable.
Nunes: What else can be done to increase the housing supply?
Calabria: Certainly, on the lending side, the constraint is not you and I get a mortgage; the constraint is the builder getting construction finance. That results from 30% to 40% of community banks since Dodd-Frank having disappeared.
You’re going to see an approach under a Trump administration that’s much more looking at how we strengthen community banks. You need to be able to do that if you want to make construction financing readily available. It’s one of the reasons that you’ve seen consolidation among the builders. You have to deal with the construction lending side of it. And you would see that addressed better under a Trump administration than in the Biden administration.
Nunes: Construction finance is only one challenge. What about labor costs?
Calabria: There’s also a constraint on skilled labor. You have limitations on electricians and carpenters, some of this of course is when you increase spending in other parts of the economy — for example, the infrastructure bill. When you increase demand in the economy for construction labor, you’re increasing the cost of housing. You can argue that it’s worth it, and that’s fine — I’m an economist by training and I don’t think there are any free lunches.
You’ll see a different conversation at a national level in terms of where people should devote their careers. So much of the conversation of the Biden administration has been about student debt relief for doctors and lawyers. You’ll see a much bigger conversation in the Trump administration about how it’s a great thing to be a plumber, carpenter and electrician, and how we strengthen apprenticeship programs. It’s not to take away from doctors and lawyers, but it’s just an emphasis on you won’t get a lot of new housing built unless you can do something about the constraints in skilled labor.
Nunes: What is your opinion on the current administration’s initiatives in the mortgage space?
Calabria: There’s been a weakening of underwriting standards by this administration, not just at FHA, but also at Fannie and Freddie. If I can be slightly humorous, my description of the Biden administration’s housing policies is that they see two families competing aggressively over one house and they believe the solution is to add a third family. You’ve seen this massive expansion, high debt-to-income lending, that has been irresponsible and doesn’t do anything other than erode affordability. That has added to housing demand.
Keep in mind that you’re in an economy where you saw big increases in homeowners insurance. If you’re getting somebody into a loan with a 50 DTI, and then suddenly they’ve got an increase in their homeowners insurance, that’s not a sustainable world. There have been increases in allowable loan to value. Obviously, there’s been a lot of pressure to increase appraisals and weaken appraisal independence, which probably has inflated housing values as well.
They’ve done things that even don’t show up as directly. The CFPB has pushed for the elimination of medical debt and other things [from credit scores]. That may be the right policy, but it inflates FICO scores. If you’re not increasing the credit box to offset that, then you are knowingly decreasing the underwriting.
Nunes: Do you think that the federal government has limited means to influence housing supply, so wouldn’t it be expected to do more on the demand side?
Calabria: Washington doesn’t have a lot of levers in terms of housing supply. I understand if you feel you have to do something, most of your tools are demand-oriented. But that said, you have to recognize that increasing demand when supply is limited makes it worse, not better. There’s a lack of recognition of that.
There have been proposals on the Republican side to release some small amounts of federal land. There’s a process in Nevada, in Clark County around Las Vegas, where you can convert federal land to housing development. The proposal is to essentially allow it in other cities. The Joint Economic Committee made some estimates, and it could result in 3 million new units being built. The federal government does have land. Some of it is in urban areas, like Denver, that are facing affordability challenges but can be converted. Nobody’s talking about chopping down the redwoods or building housing in Death Valley. But it’s hard to see this administration ever thinking about federal lands to do anything other than be dirt.
Nunes: Among the steps taken by this administration, they reduced mortgage insurance premiums for FHA loans. How do you evaluate this decision?
Calabria: It only increases demand. There are things that the industry may like. Some of that is good for overall affordability. Some of it isn’t. Did housing prices go down after they did that? Did homeownership go up after that? No.
Obviously, the industry is under tremendous pressure, particularly on the nonbank side. Rather than trying to target things that look like they help the industry, if you target things to get the overall market going, that’s the better approach. For instance, on the tax side, if you allow some capital gains relief, many people with those 3% mortgages may be willing to sell their homes, which will increase the volume, increase existing-home sales and bring some of the volume back.
Nunes: What changes could we expect for the CFPB under a potential Trump administration?
Calabria: I don’t think the CFPB is going away — as much as that would be nice. But I do think you are going to see a difference in the stance, which will matter in the mortgage industry, in terms of enforcement and obligations. The Republicans’ approach to the CFPB is to say that there are wrongdoers; we will go after the bad guys. This administration says the same thing, and that’s where the overlap is. The difference is this administration also has the view that we’re going to use the CFPB to pick winners and losers to redistribute to our friends and engage in a lot of social engineering. And that’s a much different approach from just going after the bad guys.
Writ large on compliance and regulatory costs, Trump’s CFPB will be considerably lower. Post Dodd-Frank, one of the problems has been that it costs so much more to originate loans. A tremendous amount of that is because of regulatory costs. It’s not like the bad guys get to run wild; you’d still see enforcement.
Nunes: What’s the future of HUD, in your view?
Calabria: HUD is not going away. There may be some changes in some of those programs. And that’s fine, because much of what they’re doing today is just adding to demand without added supply. And of course, you’re not going to be able to deal with inflationary pressures unless you’re willing to make some changes to the budget. And if we’re going to make changes to the budget, anything, including HUD, should be on the table.
Nunes: Would a Trump administration’s goal be to resume some of its past projects, such as releasing Fannie and Freddie from conservatorship or implementing more caps on their purchases?
Calabria: There’s a much higher chance in a Trump administration of Fannie and Freddie coming out of conservatorship. You don’t need Congress to do it. Having been the guy who started it, I know a lot of work was done. There’s a road map; it’s all doable. It’s a benefit to the industry because you reduce the degree to which politics drives. You have to go back to letting Fannie and Freddie behave as businesses. It will bring a lot more certainty to the industry.
The restrictions put in place were always done to minimize disruptions to the primary purchase market. In 2020, when investment caps were put in place, everybody said the sky was falling. Did the sky fall? No. That business got picked up. It was done by other people. Trump is a developer. The guy spent his entire life in real estate. He tends to have people in the administration who understand how the housing and mortgage markets work.
Just like you saw in 2021, any constraints on Fannie and Freddie will be done to minimize disruption in the mortgage market. You can look at all these people who said in 2018 and 2019 that Calabria would kill the mortgage market. It didn’t happen. Nobody benefits from a strong Fannie and Freddie more than the mortgage industry.
Nunes: One initiative from Freddie Mac is a pilot program to purchase closed-end second mortgages. Do you support this idea?
Calabria: I would certainly expect that to get suspended. Should we be spending the portfolio on second mortgages instead of mortgages that are purchases? I recognize that the industry is hurting. Everybody wants to focus on things that bring the overall market back. But you can’t blow up Fannie and Freddie at the cost of it. That might feel good in the short run, but it’s not the right approach in the long run.
Nunes: A topic that’s been covered extensively at HousingWire is the National Association of Realtors’ settlement and changes to agent commission structures. What are your thoughts on that?
Calabria: If you remember, there was a 2020 settlement with NAR. That got thrown out the door. There’s a very high likelihood that it reverts back to the 2020 settlements. Again, that doesn’t stop some of the litigation out there. But you would see a very different stance toward the real estate industry and the kind of war on Realtors comes to an end.
Nunes: Who would you expect to lead federal housing agencies and companies under a potential second Trump term?
Calabria: It’s too early to say. But you’re likely to have people who are both experienced regulators and people with deep experience in the capital markets. You’ll have people who have experience with Trump’s style and understand how he governs. It’s less surprising, perhaps, this time around.
Nunes: Would you return to the government? If so, in what capacity?
Calabria: I believe in public service. If asked to serve in a capacity to make a difference, I would certainly be inclined to accept. But which capacity, that’s up to the president. You don’t get to choose it. My interest is broadly financial services.
Source: housingwire.com
WEISSPORT, Pa. – A new destination for hand-crafted baskets, pillows, framed artwork, seasonal accents and other home furnishings is set to open this weekend in Carbon County.
Simple Home Pennsylvania, a store offering unique home decor and gifts, including many items made in the United States by artisans and crafters, will hold a grand opening at 11 a.m. March 2 at 500A Bridge St. in Weissport.
Simple Home Pennsylvania, a store offering unique home decor and gifts, including many items made in the United States by artisans and crafters, will hold a grand opening at 11 a.m. March 2 at 500A Bridge St. in Weissport.
The business will operate near The Gorge Eatery in a renovated portion of the Hofford Mill, a late 19th century building that originally operated as a lumber mill.
Simple Home Pennsylvania owner Sarah Kuhn, of Lehighton, labels her new venture a “passion project” and hopes it will help to reinvigorate Weissport’s business scene.
Unlike many of the antique and consignment shops in the area, Simple Home Pennsylvania will carry “more modern and contemporary products,” Kuhn said.
“I’m really excited,” Kuhn said. “There’s not a lot of opportunity for people in Weissport and the surrounding area to shop this kind of way without having to go to Allentown or other places that are a half hour-plus away. The Gorge Eatery has had a lot to do with Weissport’s rebirth, and we’re hoping to help complement that.”
The store will feature a wide array of home decor items, including dried and artificial florals, vases and planters, wreaths and garland, and serving boards and trays.
Customers also will be able to shop throw blankets and pillows; scented items such as soaps, candles and diffusers; and kitchen products such as mugs, cannisters, dish towels, dinner napkins, oven gloves and natural acacia wood cooking utensils.
“We’ll also have some customized items that are local to the area, including pieces featuring Mauch Chunk Lake and Beltzville Lake,” Kuhn said.
With the help of her father, Kuhn renovated the roughly 1,000-square-foot space to include new flooring, counters, wall paint and more.
“My father has flipped a couple of houses in the past, and I’ve helped stage them and given him design ideas on how to remodel them,” Kuhn said. “He’s retired now and spent countless hours helping me remodel the space – making a custom fireplace, adding new flooring, everything.”
Customers also will be able to shop books, including cookbooks and selections in other genres such as how-to, self-help and decorating inspiration, along with “Support Local Farmers” and “Support American Farmers” sweatshirts.
“We’ve gotten a lot of interaction on our Facebook page regarding our support for local farmers and our clothing displaying those messages,” Huhn said. “There’s a lot of excitement for that.”
To celebrate its grand opening, Simple Home Pennsylvania will offer a door prize along with discount coupons (valid on March 2 only).
Going forward, store hours will be 5-8 p.m. Thursdays, 5-9 p.m. Fridays, noon to 9 p.m. Saturdays and 10 a.m. to 4 p.m. Sundays.
Customers also can shop online at simplehomepa.com and place orders for pickup or delivery within 10 miles of the store.
For the latest Simple Home Pennsylvania updates, follow the business’ pages on Facebook and Instagram.
Source: wfmz.com
Whether you’re planning on hitting the road for spring or summer break or launching yourself into home improvement projects, Discover’s bonus categories for the second quarter of 2024 can offer some value for your spending.
From April 1 through June 30, 2024, holders of eligible cards like the Discover it® Cash Back and Discover it® Student Cash Back can earn 5% cash back at gas stations, electric vehicle charging stations, home improvement stores and on public transit, on up to $1,500 in combined spending for the quarter. All other purchases earn 1% cash back. Activation is required to be eligible for the higher rewards rate.
Here’s what you need to know about which purchases qualify.
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Discover bonus rewards categories for 2024 |
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Q1 (Jan. 1–March 31) |
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Q2 (April 1–June 30) |
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Q3 (July 1–Sept. 30) |
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Q4 (Oct. 1–Dec. 31) |
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Discover’s 5% categories come with terms. For the second quarter of 2024, here’s what will qualify:
To earn the bonus rate, a purchase must be classified as made with a place that sells automotive gasoline or offers an electric vehicle charging station to the public. When you’re on the go, those purchases made at the pump or inside the gas station may also qualify for the elevated rewards rate.
Some purchases may not qualify, such as those made at supermarkets, supercenters, wholesale clubs and parking garages.
Eligible public transit purchases that earn 5% back will include passenger buses, railways, ferries, taxis and rideshare services made in the U.S. Long-range passenger land, rail and water transportation services won’t qualify.
If you’re planning some home renovation projects or need to stock up on supplies, you can earn more value by doing it within Discover’s promotional window.
Eligible purchases will include those made online and in store at home improvement stores; building supply stores like lumber, paint and hardware stores; and lawn, nursery and garden supply stores. Purchases made through third parties like contractors may not qualify to earn 5% back. And purchases made at stores that offer home furnishings, home appliances, plumbing, heating supply and floor coverings won’t qualify.
To make the most of your bonus categories for the quarter, don’t forget these steps:
Log in to your Discover account to activate the bonus categories.
Use your Discover card for any purchases you make in those categories.
Track spending to know when or whether you’ve reached the $1,500 spending limit. (You can view an automated tracker while signed in to your Discover account.)
The Discover it® Cash Back card can be a worthy contender for your wallet if you’re organized enough to keep track of bonus categories that change every quarter and require activation. It’ll also work best if you’re not in the habit of maintaining a monthly balance, as the card’s steep interest charges will chip away at the value of rewards.
The card’s features include:
Annual fee: $0.
APR: 0% intro APR for 15 months on purchases and balance transfers, and then the ongoing APR of 17.24%-28.24% Variable APR.
Sign-up bonus: INTRO OFFER: Unlimited Cashback Match for all new cardmembers – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
Source: nerdwallet.com
Macro Trends Advisors founding partner Mitch Roschelle joins ‘Varney & Co.’ to discuss the housing market under the Biden administration as monthly mortgage payments continue to soar.
New U.S. home construction fell in December for the first time in four months, despite a sharp drop in mortgage rates.
Housing starts decreased 4.3% last month to an annual rate of 1.46 million units, according to new Commerce Department data released Thursday. Refinitiv economists had projected a pace of 1.42 million units. The decline stemmed from a substantial drop in single-family home construction, which fell by the most since July 2022.
However, applications to build – which measures future construction – rose in December, increasing 1.9% over the course of the month to an annualized rate of 1.49 million units. When compared with the same time last year, building permits are up about 6.1%.
“Building permits, a leading indicator of future construction, accelerated in December as builders expect the housing market to improve as borrowing costs fall,” said Jeffrey Roach, chief economist at LPL Financial.
HOME FORECLOSURES ARE ON THE UPSWING NATIONWIDE
Homes are under construction in Sacramento, California, on July 3, 2023. (David Paul Morris/Bloomberg via / Getty Images)
The data comes one day after the National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, rose five points to 44. The increase followed a three-point increase in December.
Any reading below 50 is considered negative.
MORTGAGE CALCULATOR: SEE HOW MUCH HIGHER RATES COULD COST YOU
“Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market after being sidelined in the fall by higher borrowing costs,” said Alicia Huey, NAHB chair and a custom home builder and developer from Birmingham, Alabama.
A sign outside a home for sale in Atlanta on Sept. 6, 2023. (Elijah Nouvelage/Bloomberg via / Getty Images)
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Sentiment among builders began steadily falling at the end of the summer after mortgage rates shot above 7%, throttling demand among would-be homebuyers. But borrowing costs have retreated over the past two months as many investors believe the Federal Reserve is done with its aggressive interest-rate hike campaign – and will soon pivot to cutting rates.
Rates on the popular 30-year fixed mortgage are currently hovering around 6.66%, according to Freddie Mac, down from a high of 7.79% at the end of October but well above the pre-pandemic average of 3.9%.
The recent decline has prompted a burst of optimism among homebuilders that the worst may be over. However, the housing market is facing new headwinds heading into 2024, including higher prices and shortages of labor and lumber.
Source: foxbusiness.com
This week’s Afford Anything blog post is a well-balanced diet:
The Robert Who Cried Wolf
Famed investor Robert Kiyosaki, author of Rich Dad, Poor Dad, recently caused an internet stir by predicting “the start of the biggest crash in history.”
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Of course he did.
Kiyosaki is constantly crying wolf. It’s good for (his) business.
Bad news travels faster than good news.
People who prioritize attention over truth will use that to their advantage. Kiyosaki is a shrewd businessman. He understands the profit potential in strategic pessimism.
But that’s bad news for his followers. Per the law of large numbers, it’s reasonable that some people have kept their cash on the sidelines, rather than investing in the markets, after heeding his warnings. And that has massive lifelong ramifications on their wealth and retirement.
Lesson: Beware of anyone who peddles *negativity bias* in order to stay relevant.
These economic fear-mongerers don’t hold accountability for their track record of wrong predictions.
Their followers are the ones who suffer.
This is why it’s critical to choose your mentors carefully — and it’s precisely why you should never blindly enroll in an online class that’s taught by some random person whose ideas you haven’t vetted.
If you’re curious how often Kiyosaki has made the wrong call, note that Stanford-trained data scientist Nick Maggiulli, our guest on Episode 375 of the Afford Anything podcast, shared this illustration on X:
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Pessimism has a visceral appeal. It’s evolutionarily advantageous to be hyper-aware of threats.
Our ancestors didn’t survive the jungle or savanna by appreciating the beautiful flowers. They survived by staying hyper-vigiliant of danger. This explains why negativity bias is so innate, so intrinsic. It’s a survival mechanism.
But in the modern developed world, pessimism keeps us overly conservative. We choose the “safe” major. We take the “steady” job. We tilt too heavily into conservative investments when we’re young, and we panic when our 401k’s start to decline. We avoid real estate investing and starting side businesses because these seem too risky.
Pessimism stifles innovation, entrepreneurship, and creativity. It locks us into mundane careers and middling investments as we muddle through risk-averse lives. In the end, we haven’t endured huge losses, but neither have we *embraced a shot* of winning.
As Episode 284 podcast guest Morgan Housel eloquently said:
“Pessimists get to be right. Optimists get to be rich.”
No, The Fed Lowering Interest Rates by 25 Basis Points Is Not Going to Flood the Market with New Housing Inventory 🙄
A little history lesson:
Once upon a time, in 2008, there was a Great Recession. It scared many investors and homebuilders, and they stopped making new homes.
In the decade that followed the Great Recession, new construction reached its lowest point since the 1960’s.
By 2019, the housing shortage amounted to 3.8 million units. This means there were 3.8 million more families and individuals who wanted a place to live — either to rent or buy — than there were homes available.
Then the pandemic struck. The prices of copper, lumber and other construction items shot through the roof (no pun intended). Builders had to raise home sale prices due to higher materials costs. Prices soared.
In 2020 and 2021, people across the internet cried, “Why are they charging so much more than the home is worth?!” — not realizing that “worth” is a function of the cost of labor + the cost of materials + the premium of scarcity.
And when supply is curtailed — as it was by 3.8 million units as of 2019 — there’s an ample scarcity premium.
Then inflation climbed. The Federal Reserve raised interest rates 11 times during their 2022-2023 cycle, resulting in a rapid escalation of mortgage rates.
This created a “lock-in effect” among existing homeowners. Nobody wants to trade a mortgage with a 3 percent fixed interest rate for an alternate mortgage with a 7 percent rate.
Existing homeowners with a mortgage have a huge incentive to hold.
Sellers who *need* to get rid of their property — for example, because they’re moving to another country — list their homes on the market. But homeowners who simply *want* to upsize or downsize are, for the most part, staying put.
This has created even more housing supply pressure.
Meanwhile, homebuilders — who must borrow money to finance their operations — are seeing the cost of capital skyrocket. Many have curtailed new construction, putting further pressure on the supply pipeline.
So we have a long-running confluence of factors that, piece by piece, keep exacerbating the housing supply crunch.
And this leads to today’s takeaway:
No, this problem will not magically solve itself the moment that the Fed reduces interest rates.
The Fed is meeting today and tomorrow. They’re widely expected to hold rates steady. (They’ll make an official announcement at 2 pm on Wednesday.)
There’s rampant speculation that the Fed will lower interest rates in Q1 or Q2 of next year.
— And —
There seems to be a pervasive myth that once interest rates decline, those “locked-in” homeowners will rush to list their homes for sale, flooding the market with new inventory.
The supply-demand imbalance will tilt in the buyer’s favor, home prices will plummet, and housing will become affordable once again.
Yet that is pure fantasy, disconnected from the data.
Imagine 10 people. Nine of them have mortgage rates that are less than 6 percent. The stat is 91.8 percent of mortgaged homeowners, to be precise.
Wait.
Imagine those same 9 people, the 9 out of 10 who have a sub-6 percent interest rate. Here’s how they break down:
Let me say that again:
Six out of 10 mortgaged homeowners have an interest rate that’s below 4 percent.
Meanwhile:
One-half of mortgaged homeowners (49 percent) say they’d consider listing their home only if interest rates fell below 4 percent, according to a Redfin survey conducted by Qualtrics.
So this myth that if the Fed lowers interest rates, the market will get flooded with new inventory? — That scenario isn’t likely to happen for a long, long, looooong time.
As of Dec 12, 2023, the current average 30-year fixed rate for a buyer with a 740-760 credit score is 7.4 percent. Multiple reductions in interest rates won’t begin to approach the sub-4 percent rates of yesteryear.
The “lock-in effect” will last for longer than you might expect.
Lesson: Don’t wait to buy a home based on speculation about the market. If you have both the money and desire to buy a home, DO IT NOW. Homes are likely going to get more expensive in the future, not less.
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How to Not Flush AS MUCH Money Down the Toilet This Holiday Season
Yeah, I know.
The holiday season is custom-built for parting with your money. Every store is promoting sales, discounts, offers. Limited time only.
It’s scarcity on steroids.
Holiday deals tap into the part of our brain that says — “this deal is only available now; I should snag it while I still can.”
Our FOMO creates jobs and drives the economy.
Since holiday spending is human nature, let’s forgo the guilting, shaming and finger-wagging that’s so endemic to the personal finance and FIRE community.
It’s counterproductive. Guilt and shame over holiday spending doesn’t change human behavior, it merely robs the joy from it.
It’s like chowing down a piece of chocolate cake while simultaneously fretting about the sugar.
You’re eating the cake regardless. You may as well enjoy it.
Instead, let’s accept that some degree of holiday spending is normal, and let’s focus on how to find the best deal possible.
Here are four pointers. (If you have more to add, please share these with the Afford Anything community) —
#1: If you’re buying an item at a mid-size company’s website (i.e., a merchant that’s bigger than a mom-and-pop shop, but not a big box retailer like Target or Amazon) — move your cursor near the “back” arrow on the browser.
This is called “exit intent,” and it often triggers pop-ups with discount codes.
#2: For online purchases: Create an account, put an item in your cart, and then leave the website.
This is called “abandoned cart,” and often triggers an automation in which the company emails you a limited-time-offer discount code.
#3: If you’re buying something expensive (over $500 – $1,000 or more), track the price for a few weeks, especially around the holidays. On sites like Wayfair, I’ve seen prices fluctuate daily.
#4: The least useful savings tip: Googling discount / promo codes or pulling these codes from mass aggregator websites.
You may get lucky, but typically 9/10 are expired or don’t work; they just yield a bunch of extra open tabs on your browser.
There’s an enormous selection of third-party websites and browser extensions that claim to help with this, with varying degrees of efficacy.
I’m not going to recommend any specific tools; recommendations are both dynamic and better crowdsourced. Please share your experience with the community.
Source: affordanything.com
About the series…
When most people talk about money management, they discuss tactics. Occasionally, you’ll encounter someone who elevates the discussion to strategy, rather than simply scattershot tactics.
But what’s missing from both conversations — both tactics and strategy — is a wider-lens look at how to become a better thinker; how to become a crisp, clear decision-maker.
How to think from first principles. How to better your brain. How to cultivate the wisdom to know the next move.
This series is an attempt to bring first principles thinking into the conversation around money. Welcome to the inaugural post.
Welcome back to First Principles, my series with an alternate definition of FIRE — Financial Psychology, Investing, Real Estate and Entrepreneurship.
Today we’ll dive right in with the question on everyone’s mind: is a recession looming?
Are we in a recession?
Short answer: Possibly. I may even go as far as to say “probably.”
A recession is defined as two consecutive quarters of negative economic growth, as measured by GDP. (Notice that recessions reflect the state of the economy, not the stock market. We’ll come back to that in a moment.)
By definition, a recession is only visible in hindsight, after two negative-growth quarters have passed. This means it’s possible we’re already in a recession. It’s also possible that one may be looming.
Why now?
What’s behind this (potential) recession? In a word: inflation.
As I’m sure you know, the Federal Reserve has been raising interest rates. (There have already been 5 rate hikes so far in 2022!)
The Fed is tasked with a “dual mandate” to control both inflation and the risk of recession; this “dual mandate” exists because controlling inflation necessarily carries a recessionary risk.
But why?
To control inflation, the Fed must make money more expensive to access. When borrowing becomes more expensive, people and companies do less of it, which slows spending and growth. This could lead to a couple of consecutive negative-growth quarters, which is, by definition, a recession.
What does this mean for you?
Recessions vary along three dimensions:
(1) severity
(2) duration
(3) frequency
It’s tempting to think that a recession will impact us in the same ways as the Great Recession of 2008.
This is due to a few cognitive biases, including:
Recency bias — our tendency to overestimate that an event that occurred recently will re-occur again, or to assign greater importance to things that have happened most recently.
Salience bias — our tendency to focus on events and facts that are remarkable (the headline-grabbers), rather than events and facts that are mundane.
Availability bias — our tendency to think that examples that most easily come to mind are more important or significant than they actually are.
The Great Recession of 2008 was (1) recent; (2) remarkable; and (3) easy to recall.
Its remarkability and ease-of-recall stems from the fact that the Great Recession was both high-severity AND long-duration. It felt personal; millions lost their jobs and homes, which meant that this recession impacted us in the most visceral, tangible ways possible.
For all those reasons, it’s easy to assume that every recession will look, feel and behave similarly to the Great Recession.
But will it?
Let’s turn our attention to 2022, and look at the many factors that are different this time around, including:
(1) Unemployment is at a record low. Despite the occasional warning headline (e.g. Tesla will be reducing its salaried headcount by 10 percent), the unemployment rate remains 3.6 percent as of May 2022, according to the U.S. Bureau of Labor Statistics.
(2) Housing prices continue to rise, despite higher interest rates, due to imbalances in supply-demand fundamentals. The cost of materials (such as lumber) remains high, which increases construction costs and therefore home values.
(3) Consumer spending remains strong, particularly in discretionary areas such as travel and dining. Despite higher fuel prices, airlines are seeing strong demand for flights.
What does this mean?
We may or may not already be in a recession, or enter one in the near future.
But if we do, there’s a chance this might be experienced as an “on-paper” recession, in which the daily lives of the average middle-class worker isn’t strongly affected.
If unemployment remains low, consumer spending stays strong, and inflation gets roped into check, there’s a chance that this recession will be forgotten. It might be long-duration, but low-severity.
Of course, this is one of a range of possibilities, and as you know, I’m not in the business of prognostication.
But it’s worth making the point that we shouldn’t let our cognitive biases lead us astray. Don’t assume that the next recession will resemble the conditions of 2008.
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Recessions reflect the economy, not the stock market.
Let’s return to the definition of a recession: two consecutive quarters of negative economic growth, as measured by GDP. This definition doesn’t directly relate to stock prices.
But investors react in varied ways.
There are two popular styles of investing: growth and value.
Growth investors tend to sell (or not buy) during recessions. When companies expect lower profits, growth investors are usually unwilling to pay a high price for a share of that company, so stocks can fall.
But this is counterbalanced by value investors who pick up shares of the ‘winners,’ the companies and stocks that they believe have been maligned by the market and that will emerge strong during the recovery.
Hence, the volatility.
So let’s zoom out and look at what’s happening now:
Everything (except real estate) is falling.
Stocks are volatile. Crypto is depressed. Bonds are unattractive.
And that’s not surprising, given the liquidity patterns of the past two years.
At the start of the pandemic, $10 trillion in liquidity got pumped into the monetary system. Investors used that liquidity to buy all types of assets — stocks, bonds, crypto, housing — triggering a massive spike in the value of all asset classes across the board. (It’s no surprise that “meme stocks” like GameStop and AMC Theaters became a thing at the exact moment when millions received “stimmy” checks.)
Two years ago, people were already asking the question, “what should I invest in when everything is expensive?”
Last year, that question only became louder and more pronounced.
It’s reasonable that today, as liquidity is getting removed from the system and capital becomes harder to access, the values of these assets will gyrate for awhile, then stabilize at a “new normal,” with valuations that reflect market fundamentals such as earnings and expectations.
What does that mean for you?
Expect that the rest of 2022, perhaps 2023, could be volatile. Stocks, crypto and bonds may swing for awhile as investors try to figure out the “new normal.”
But these types of events are how the market cleans itself.
The poorly-run companies run out of money and fold. Better companies take their place. And the broad market, over the long-term, reflects the growth of the winners.
Many fantastic companies started during the Great Recession; many new companies will be created during the next one.
We created a massive, multi-day email series to deep-dive into recession and inflation in 2022 — and specifically, to talk about how it could impact the housing market.
It’s waaayyyy too detailed to summarize into this post, so I’d suggest signing up to get this multi-day email series.
If you’re even thinking about buying real estate, either as an investor or as an owner-occupant, you’ll find a ton of value in this free email series.
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One of the most interesting stats to watch in coming months relates to the unemployment rate.
Right now, many entrepreneurs are struggling to hire talent. The labor market is tight. Small businesses are having a tough time competing with the salary and benefits packages offered by major corporations.
Many real estate investors (which is a specific subset of entrepreneurship) have spent years lamenting how hard it is to hire contractors — because many contractors are booked, busy, and in high demand.
Given the record-low unemployment, that’s not surprising.
If the labor market loosens, it might become easier to hire. And that will be a blessing for small business owners and real estate investors who are trying to find top talent, especially 1099 contractor talent.
Again, this is why many great companies tend to be launched during recessions:
One of the best times to create a business is when skilled talent is looking for work.
Hope you enjoyed this issue of First Principles.
I’ll see you in the next issue. Until then!
Click here if you want future posts like this straight to your inbox with more thoughts, ideas and insights on a new take on FIRE.
See you soon!
Source: affordanything.com
Michigan has caught a bad rap with all the water crises and gradual auto industry collapse. But the Great Lakes State still has plenty to offer. Explore the cheapest places to live in Michigan and see how these rent prices stack up against the rest of the country.
The great news is that the cost of housing in Michigan comes in far below the national average. Things look poised to change though — rent prices are up 22 percent since last year, with the average one-bedroom apartment coming in at $1,315 per month. So, maybe sign a rental agreement sooner rather than later?
Cities all over Michigan are affordable for renters. Sure, a cheap rental is not right on the banks of one of the Great Lakes, or whatever, but it’s still possible to find a great unit! Let’s dive right into this list of the cheapest places to live in Michigan for renters.
This Detroit suburb is in southeast Michigan and has a population of just under 95,000, making it the 9th largest community in Michigan. Currently, the average rent for a one-bedroom apartment in Livonia is $1,056.
Livonia has a lot going on — there are major employers like Ford Motor Company, Amazon and Trinity Health providing lots of jobs for area workers. In all, more than 4,000 businesses are in the area, among them several corporate headquarters.
The city also boasts more than 1,300 acres of nature preserves and public parks, behind only Detroit in the entire state. One particular gem is Greenmead Historical Park, which features a working farm and a number of historically significant buildings. The park also hosts lots of great outdoor events and has a full spate of recreational facilities.
For entertainment, Livonia is home to a ton of great breweries, restaurants and shopping (especially antiques and flea markets). Soccer enthusiasts may also choose to join the Livonia City Soccer Club, which has more than 1,300 players currently.
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Rent is creeping up in the Michigan city of Royal Oak, with a one-bedroom apartment running 6.95 percent more than this time last year. Currently, such a unit will set you back $1,029 per month. Just north of Detroit, Royal Oak is ideal for people who need to work in the city, but who want a quieter way of life in their downtime.
The most popular spot in Royal Oak is undoubtedly its ultra-walkable downtown area. Here you will find many lofts and high-rises available for rent. In addition to an almost overwhelming array of dining options (more than 45), Downtown Royal Oak has entertainment galore with the Royal Oak Music Theatre, Emagine Theater and Mark Ridley’s Comedy Castle.
The city also puts on a popular farmer’s market stocked with fresh produce from local farms. It’s also not unusual for a community art fair or another special event to liven up the streets of Downtown Royal Oak on the regular.
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The last city on our list of the cheapest places to live in Michigan that breaks the $1,000 threshold, Kalamazoo is about as fun to live in as it is to say. Smack in between Chicago and Detroit, Kalamazoo County is in Western Michigan. The word is out about this eclectic area, however, so rent is up 11.67 percent since last year for a one-bedroom apartment. The average rent for such a unit is about $1,018.
Kalamazoo has a lot of great things going for it. Notably, the water and water reclamation systems are award-winning (a big deal compared to some other areas of Michigan). There are also many parks, golf courses and lakes to enjoy during the delightfully mild summertime months.
An ideal place to work, Kalamazoo offers positions in a wide array of industries to choose from such as craft beer, pharmaceutical and medical science, among others.
The only problem with Kalamazoo is figuring out what to do first. Take in a concert or show at the Kalamazoo State Theatre downtown. Or, take in nine or so innings of Kalamazoo Growlers Baseball (summer collegiate league) at Homer Stryker Field. If the sport of curling is more your game, join the Kalamazoo Curling Club!
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The smallest city so far on our list is Greenville. A small city of under 10,000 people in west-central Michigan (about 25 miles inland from Lake Michigan), this city checks in at under $1,000 per month! A one-bedroom averages about $990.
Greenville is known for its access to outdoor opportunities. A scant seven miles northwest of Greenville is the Woodbeck chain of lakes, where visitors can swim, boat and fish to their heart’s content. The swimming beach at Baldwin Lake is another popular spot during the summer months. Then there’s the Edwards Creek Mountain Bike Trail, which is sure to challenge even seasoned cyclists.
Greenville’s quaint downtown area is another hotspot for local shopping and dining. With over 70 retailers and other businesses, it’s just big enough to get the job done without being overwhelming. It’s also picturesque enough for any movie — Greenville takes great pride in its adorable, newly renovated streetscape!
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About 20 minutes northwest of Detroit, the city of Wixom is teeny-tiny compared to Motor City. At under 15,000 residents, Wixom is far less metropolitan and far more of a tight-knit community — probably why it’s coming in hot on our list of the cheapest places to live in Michigan. Currently, a one-bedroom rental averages $965, up 7.97 percent from one year ago.
Indeed, Wixom puts on a slate of events rivaled by any city in the state, such as seasonal festivals, movies in the park and dog-friendly events. The summer concert series is very popular!
There are seven public parks located throughout Wixom, each with amenities ranging from sledding hills to sand volleyball courts. The Wixom Trail System is especially beloved by local runners, skaters and bikers, as is The Wixom Habitat, a 300-acre nature preserve.
Don’t forget to stop by downtown to take in an authentic Italian meal at the beloved Volare Ristorante.
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Bad news first. Yes, this is “that” Flint. The one with the five-year-long water crisis that exposed thousands of people to lead and other unsavory things in their drinking water. However, things are under control in the area now, which is why rent has jumped more than 30 percent up to about $929 for an average one-bedroom rental.
Located 60 miles northwest of Detroit, Flint is appropriately located on the banks of the Flint River. The city’s population is just under 100,000, making it one of the larger cities in Michigan.
To the surprise of some, Flint is home to a thriving cultural arts community. The Flint Institute of Music includes the Flint Symphony Orchestra, Flint School of Performing Arts and Flint Youth Theatre — this is just one component of the 30-acre Flint Cultural Center. Don’t forget to stop by the Longway Planetarium, Sloan Museum and other culturally significant offerings!
Locals also love to hike around the one-of-a-kind attraction that is Stepping Stone Falls, a man-made waterfall area and dam that holds back the Flint River, thus creating Mott Lake, which is fully stocked with fish. There’s even an evening riverboat cruise!
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Known by locals simply as “Ypsi,” this eastern Michigan city is also mere minutes (seven miles) from the destination town of Ann Arbor. In case you were wondering, you pronounce Ypsilanti like “IP-sill-ANN-tee” — in honor of a Greek hero from the Greek War of Independence.
Currently, people haven’t been fighting over rentals in Ypsi, so rent has fallen by 18.52 percent over the last year. The average one-bedroom apartment here costs $922 — making it one of the cheapest places to live in Michigan.
Ypsi is obviously a college town, but the students and other populations are largely separated. There’s plenty to do for people of all ages. Stop by Depot Town for classic car events, not to mention a regular farmer’s market. Depot Town also hosts a bunch of vintage, novelty and shopping options.
Don’t forget to pop by the local apple orchard or strawberry patch. Here you can pick until your heart’s content. Afterward, take the kiddos to hit the Michigan Firehouse Museum for an authentic look at past and present firehouse efforts.
Adults can top it off with a stop at any of the local bars and breweries Ypsi is known for. Cheers!
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Expect to see lots of green and white in East Lansing, since the city is home to the Michigan State Spartans and all of the students and school spirit that go along with it. As a result, housing is pretty affordable. The average one-bedroom rental is about $906 per month, up 1.17 percent from last year.
Although MSU is the centerpiece of East Lansing, there’s plenty more going on in the area. The city is family-friendly, with attractions such as the Family Aquatic Center, an “interactive outdoor water facility.” It even has a 190-foot-long tube water slide!
Then there’s the East Lansing Film Festival, which draws people from all over to watch all kinds of movies made around the world. Be sure to explore the hopping downtown area in all its food, shopping and entertainment glory.
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The capital city of Michigan is a steal right now, with rent prices down 25.45 percent from last year. A typical one-bedroom unit rents for $850 a month!
Although Lansing got put on the map thanks to the founding of Olds Motor Vehicle Company in 1897, modern Lansing has a much wider slate of job opportunities, including other forms of manufacturing, education, banking and healthcare, among others. As a result, it’s easy to live, work and play in Lansing.
Lansing is also delightfully diverse, culturally speaking. In fact, Lansing is known for celebrating Black and minority culture year-round. There is an annual African American Parade here, plus historic sites such as the Malcolm X Homesite and the Michigan History Museum.
There’s plenty for people of all ages and persuasions to do around town. Families love Potter Park Zoo, as well as all the outdoor fun that Lansing River Trail offers. The 4-H Children’s Gardens at MSU is another awesome place to stop by with the kiddos.
Find apartments for rent in Lansing
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Topping our list of the cheapest places to live in Michigan, the mid-state city of Saginaw boasts the cheapest rent by more than $150 per month (compared with second-place, Lansing). Rent in Saginaw dropped 1.68 percent over the last year to about $698 for an average one-bedroom apartment.
The city was originally inhabited by the Sauks. So, the word Saginaw literally means “Land of the Sauks.” The area was originally a major lumber hub, thanks to easy water access. Today, it’s known for its technical innovations. In fact, it hovers at the top of the list of most registered patents per capita in the country.
Locals especially love Saginaw’s proximity to waterways. The city is on the banks of the Saginaw River, and Saginaw Bay serves as an inlet to Lake Huron. Ultra-popular Ojibway Island is downtown on the river and plays host to lots of events and people who just want to stroll or bike the area. There’s even ice fishing in the winter!
Find apartments for rent in Saginaw
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Although on the whole Michigan is more affordable than many other U.S. cities, it still has some relatively swank areas. Take a look at this list of the most expensive cities in Michigan.
Rent prices are based on a rolling weighted average from Apartment Guide and Rent.’s multifamily rental property inventory as of May 2021. Our team uses a weighted average formula that more accurately represents price availability for each unit type and reduces the influence of seasonality on rent prices in specific markets.
We excluded cities with insufficient inventory from this report.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
Source: rent.com
Are you eager to boost your income and stash away extra cash each month? Look no further!
Don’t look away yet; these seasoned Redditors are about to spill the beans on some of the most ingenious and practical strategies to not just save a mere $10 but potentially rake in a couple of hundred dollars every month.
From tried-and-true money-saving hacks to innovative income-generating ideas, join us as we uncover the goldmine of financial wisdom shared by the Reddit community!
“I propagate and sell plants from my own collection on the marketplace. During colder months is when I make my money. I made $200 during the last weeks of winter first few weeks of spring just watering, propagating, planting, caring, then posting on the marketplace. I already do this with all my plants, so for myself this is minimal work,” shared somebody.
“People can earn some decent side money propagating exotic plants. It’s really not too difficult to do if you have the space,” replied another.
One person shared, “4.3% savings account and job hopped three times to give me a 50% raise these last 2.5 years.”
The second person replied, “It’s sad, but job hopping is probably the best financial move you can make.”
“Use credit cards instead of cash. Get rewards points. Set up autopay,” shared somebody.
“Yes! I don’t ever use my debit for anything other than money orders occasionally. Between this and CB apps, I get about $100 a month back. I like the Upside app,” replied another.
“100% support people using food banks when needed. Just a note that if people do have the resources, they should leave them for people who really need them rather than saving a few pennies,” commented one.
“Please leave the food bank for those that would go hungry without it. In my city, our food bank is noting that they have been in deficit this year—more food going out than coming in,” replied another.
One person commented, “I donate plasma. I make $70 for every visit, and all I do is lay there and play money-making games on my phone. It’s 1.5 hours of my time twice a week. By doing this, I’m also saving money by not eating out so much and primarily only drinking water. Fatty foods and sugary drinks make donating difficult, so I cut them out.”
Somebody else asked, “Can you tell us more about the money-making games?”
Then the original commenter replied, “Mistplay and cash giraffe. In just one month of playing games through the apps, I’ve made $45. It’s not a lot, but I’m literally getting paid to play games on my phone.”
Somebody commented on a set of comprehensive tips, “My trick is simple: Learn things. Use every opportunity to learn how to make things on your own.
“Broken appliance? Dismantle it, learn how it works, and try to fix it. It’s broken anyway, so what harm can you do? Is food about to spoil? Learn what you can do to preserve it for longer. Freeze it, dehydrate it, pickle it, and ferment it. There are many possibilities.
“Need new furniture? Try to make it on your own. The first few will be crappy and uneven, but you will love them because you made them yourself. As the years go by, you will become better and make furniture that’s designed for your taste at a fraction of the price.
“It’s absolutely fine if you fail and need to call someone to do it for you or buy something new, but a thirst for knowledge and learning to rely on yourself is the best money-saving strategy I ever implemented. Not only does it save you money, but if you like it and become good at it, you might even generate income from it.”
Another one replied with a different view on the matter, “I disagree with building your own furniture. This is similar to people saying to sew your own clothes. I’m a lifelong sewer, and it doesn’t save you money. Woodworking is similar. There are start-up costs that people don’t think about. Tools are very expensive. Lumber can be expensive since not everyone wants to use pallet wood to furnish their home. And don’t forget that your time is worth something (personally, my time is the biggest expense since I can never get it back). I’d rather buy second-hand pieces than spend my time trying to build something that will absolutely be subpar.”
“I live in a college town and keep an eye on their research site looking for people willing to participate in some of their studies. Not all of them are paid, but I’ve made a few hundred this year from it. Some are really simple, like a one-minute phone call and nasal swab a week. Once I had an hour-long Zoom call and got $50. It adds up pretty quickly,” shared somebody.
“Learn how to cook well. I invested in a lot of different spices and learned how to cook a bunch of different cultures food. That way, you can take cheap bulk foods like rice and beans and make them taste really good and different so you don’t get burnt out on it,” said somebody.
One person said, “Recreational cannabis is legal where I am, so I make my own canna-budder and home-made baked goods. $25 for a dozen brownies/cookies/cup cakes/muffins. I also do cakes.”
Somebody stated, “I clean for a part-time living (my other job is solid hours, union) and if I want extra cash, I take on organizing and ask my clients to spread my number. In winter, I shovel my elderly neighbour’s driveway and walk, and he doesn’t have to, honestly, but he tips me a nice $200 grocery card come spring. I can build good pantry staples out of that.”
“Buying only what groceries I need for the week that I will actually eat. I found I was overbuying and then throwing away or not using things in time.
“So now I try to buy less. Sometimes that means going to the grocery store a couple times a week. But it’s not far from where I work or on my way home,” said one.
“I also do my best to bring a lunch and lots of snacks with me to work to avoid buying lunches. I keep things like oatmeal and dried soups on my desk for days I forget to pack a lunch,” shared one.
“Treasury bills, or T-bills. Currently over 5% on a 30-day note. Literally risk-free unless the US government collapses in the next month,” shared somebody.
Somebody commented, “Volunteer for organizations that give you perks. I currently have been volunteering for an organization that allows me to attend concerts and events for free. Often times, I have to volunteer for a few hours and then I get access to the event for free, which would cost event/concertgo-ers $50-100
“Bonus: I’ve met some really cool people, some of whom I consider friends. That’s something clipping coupons and HYSAs can’t do for your social well-being. And before you ask, I’m not disclosing which org I volunteer for. There’s limited spot available, and it’s highly competitive.”
Which one have you tried already and want to try next? And if you know a few tips for earning and saving some extra cash, let us know in the comments!
Source: Reddit.
Have you ever watched a movie or show and been completely lost in it because of how well an actor or actress became their character? Check out this article for a whole list of actors who were perfectly cast!
You know that feeling where you’re on a movie kick in a certain genre, but you seem to run out of good movies to watch? Well, if you’re down for a vampire movie or three, check out this article for the best ones out there!
It’s pretty hard to replicate the experience of watching your favorite movie for the first time, but we’ve put together a list of movies that people have rated at a perfect 10/10. Next time you need a good movie to watch, check this out!
We’ve all been there: you make a comment you haven’t thought through at all, and the whole room goes silent at what you’ve just said. But can you imagine doing that as a famous person—and getting canceled? Check out this list of celebrities who did just that!
Are you planning a trip to the US? Culture varies a lot between countries, even countries that share borders. So if you’re headed to the good old U. S. of A, here are a few pointers to make your travels go more smoothly!
Source: financequickfix.com
When architect Simon Storey’s clients took him to a steep lot of undeveloped land for sale in Silver Lake, he advised them to pass. Storey’s firm, Anonymous Architects, is used to building on difficult sites, but he knew this particular lot would be especially challenging.
“It’s more difficult and more time-consuming,” says Storey.
The lot lingered on the market for a few years and then the asking price dropped. That’s when Storey and his wife, Jen Holmes, decided they were willing to take on the difficult ground-up construction.
Sloped lots typically require excavation and complicated and costly foundations, and have issues ranging from erosion to drainage to landscaping. It’s not for the faint of heart.
“It’s such a huge pain. But I proved myself right: It wasn’t easy,” he says.
The stairs and dining area inside Simon Storey and Jen Holmes’ home in Silver Lake. The stairs were inspired by a floating staircase in Storey’s previous home dubbed Eel’s Nest.
(Robert Gauthier / Los Angeles Times)
Storey and Holmes bought the 2,900-square-foot lot in 2017 for $92,000 and started to plan their home. The land was not just steep — a grade of 33% — but also long and narrow. (For comparison, the steepest street in Los Angeles, Eldred Street in Highland Park, has the same slope.) The couple bought the land from entrepreneur Judd Schoenholtz, who bought the lot in a trust sale. Ironically, Schoenholtz was considering how to build on it and had looked at some of Storey’s other houses for inspiration. “Simon is probably the only one who could figure it out,” he says with a laugh.
Working within the constraints of a narrow lot was familiar to Storey, who had previously built his own home in Echo Park, a compact but elegant structure whose 960 square feet exceeded the 780-foot-lot it was built on.
Storey’s previous home, dubbed Eel’s Nest after the slender homes typical of dense neighborhoods in Japan, was a study in efficient urban living. He found ways to enlarge the space, just 15 feet wide, through the clever use of windows and skylights, high ceilings and a floating staircase that did double duty as a light well.
Storey and Holmes wanted to take the best parts of Eel’s Nest and the lessons learned from living in that space for more than a decade and apply them to this new project, which they called the Box. Once again the constraints of the lot dictated the design. “We had no choice but to go right up to maximum width and stick with it for the entire building,” explains Storey.
Simon Storey stands in his home office with a wall shelf of miniature models.
(Robert Gauthier / Los Angeles Times)
An aerial view of the Box.
(Robert Gauthier / Los Angeles Times)
The result is a long building that spans just 18 feet across and 100 feet long. Yet adding just three more feet than their previous house makes a dramatic difference. “Every inch makes an outsize difference. I don’t think of it as being a narrow building,” says Storey.
Storey wanted the house to be as utilitarian as possible. He chose a corrugated cement panel typically used for farming and industrial buildings in Europe as a siding material above the two-story concrete base.
With the structure built three feet from the property line, the couple were constrained by city code in the amount of windows allowed on the side of the building. As a result, the windows are arranged in a horizontal expanse, providing panoramic views of the hills in Silver Lake and Echo Park.
The entrance to the house is set back another five feet, allowing double-height windows that span two stories, bringing in more light. The floating staircase from Eel’s Nest makes another appearance in the Box, across from the entrance. A narrow walkway on the top floor connects the front and back of the house but allows light to filter in on both sides to the floor below. The skylight in Eel’s Nest also reappears in the Box, bringing more light into the shower in the primary bathroom.
Custom panels hide parts of the interior, including the bathrooms.
(Robert Gauthier / Los Angeles Times)
With a workshop sitting between the ground-floor garage and the two main stories of the house, Storey and Holmes were able to construct all of the cabinetry, millwork and even features like their stair treads on-site. “Anything made of wood we built ourselves,” says Storey.
Holmes, who works in development at LACMA but was an art student in college, found her sculpting skills came in handy. “I knew how to weld but didn’t do it for 20 years,” explains Holmes, who took a half-day welding class at Gearhead Workshops in Torrance to brush up on her skills.
In fact, much of the construction they did themselves, as a budgetary consideration but also to ensure the level of detail met their standards. Weekends, holidays and vacation days for nearly three years were spent working on the house.
The couple estimate they spent 5,500 hours working on the house, not including the hours spent on planning, designing and general contracting, and saved about $520,000 in construction costs based on pricing from comparable projects Storey has worked on.
Jen Holmes designed the kitchen to her specifications. She wanted to cook and entertain for parties of four or 20.
(Robert Gauthier / Los Angeles Times)
“I’d take naps on a furniture blanket on the floor or in the car,” says Holmes, who became a regular at the nearby Whole Foods to pick up meals before they had a working kitchen. “Everyone [who works] there knows me and I know all of them.”
Other expenses included $300,000 for the foundation, more than three times what it would have cost for a similarly sized project on a flat lot, and about $20,500 for geology consultants to survey the slope. All together the project came in at roughly $1.3 million. However, the average homeowner shouldn’t expect such a deal. Acting as his own architect, general contractor and builder helped Storey and Holmes save considerably. Additionally, every hillside lot presents its own hidden expenses — and what a house costs to build is often very different than its market value in competitive L.A.
Before they started on the cabinets, the pair worked on sealing the envelope of the house to ensure better air quality and circulation. They meticulously identified every gap in the framing stage, foaming and caulking the gaps to improve efficiency.
Windows throughout the Box provide views of Silver Lake and Echo Park. Storey had to figure out clever ways to add windows within city codes due to the property’s layout.
(Robert Gauthier / Los Angeles Times)
Simon Storey and Jen Holmes built their window frames and cabinetry themselves, picking out the lumber to sift out unwanted marks.
(Robert Gauthier / Los Angeles Times)
Once that was complete, they set about building their own window frames and cabinetry. The two handpicked all of their own lumber from Bohnhoff Lumber Co. in Vernon, a decision Storey says is key to guaranteeing high quality. “It was a cost issue but also a quality issue. There is a shocking level of inconsistency when you don’t pick it yourself.” The natural wood provides a calming contrast to the industrial materials used on the exterior.
Most of the casework is a mix of red and white oak. With construction of the house happening during the pandemic, the cost of white oak saw a precipitous rise. Storey and Holmes began to introduce red oak as an accent material, though the effect is still monochromatic. “I don’t want to live somewhere austere, but I like things that are minimal,” says Holmes.
Simon Storey and Jen Holmes on the second floor of their home.
(Robert Gauthier / Los Angeles Times)
Meticulously placed cabinetry creates subtle storage opportunities.
(Robert Gauthier / Los Angeles Times)
All of the cabinetry and woodwork is custom, designed to suit the couple’s needs. Separating the kitchen and living room is a multipurpose room-within-a-room that includes a custom pantry on one side and cabinetry to house their record collection and stereo on the other.
“Every element of the house has a function,” says Storey. The focus on utilitarian design is a carryover from Eel’s Nest. “We are squeezing as much utility into the building as possible.” Appliances, primarily Fisher & Paykel, are hidden behind custom wood panels, as are closets and bathrooms.
With four bedrooms and three bathrooms, the house was designed to be flexible enough to adapt to changing needs. Planned prior to the pandemic, Storey’s design called for his office to occupy the back of the house, with living spaces in the front. However, the office can easily be converted into a guest suite for relatives or visitors that includes a kitchenette and a private entry.
The Box at dusk.
(Robert Gauthier / Los Angeles Times)
As a passionate cook, Holmes programmed the layout of the kitchen to her specifications. The sink is placed in a central island, facing the views. “Every party I go to, people end up in the kitchen,” says Holmes. “I wanted it to be comfortable to cook in but also a place to entertain. We can have four or eight or 20 people here and it doesn’t feel too big or too small.”
While Holmes wanted the kitchen to be as functional as possible, Storey wanted the kitchen to not look like a kitchen at all. “The fridge and freezer vanish. Nothing screams ‘kitchen.’ We had competing objectives but managed to merge into a perfect solution,” he says, adding, “It’s a good allegory for marriage.”
Source: latimes.com