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LOS ANGELES — The average long-term U.S. mortgage rate rose this week to its highest level since mid March, driving up borrowing costs for prospective homebuyers facing a housing market that’s constrained by a dearth of homes for sale.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.57% from 6.39% last week. The average rate a year ago was 5.10%.

High rates can add hundreds of dollars a month in costs for homebuyers, limiting how much buyers can afford in a market that remains unaffordable to many Americans after years of soaring home prices and limited housing inventory.

The median monthly payment listed on applications for home purchase loans in April rose to $2,112, up nearly 12% from a year ago and a 0.9% increase from March, the Mortgage Bankers Association said Thursday.

The average rate on a 30-year home loan has risen two weeks in a row, echoing moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans.

The 10-year Treasury yield has been mostly rising of late, climbing to 3.79% in afternoon trading Thursday. Two weeks ago, it was at 3.39%.

The move up in bond yields comes as investors react to stronger-than-expected economic data and the implications that could have on whether the Federal Reserve will raise interest rates again next month.

Bond traders are also factoring in the possibility that the U.S. government may default on its debt as the White House and GOP leadership wrangle over a deal to raise the federal government’s debt ceiling so it can avoid an unprecedented default as soon as June 1.

“The U.S. economy is showing continued resilience which, combined with debt ceiling concerns, led to higher mortgage rates this week,” said Sam Khater, Freddie Mac’s chief economist.

Jitters over the possibility that the government ends up defaulting on its debt could cause creditors to ask for higher interest rates on U.S. Treasury bonds, which could lead to a “significant increase” in borrowing costs, including mortgages, said Jiayi Xu, an economist at Realtor.com.

“Resolving the debt impasse sooner, rather than later, would mitigate potential adverse effects on the housing market, which is already contending with high prices and elevated mortgage rates,” Xu said.

Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates influence rates on home loans.

The Fed has raised its benchmark interest rate 10 times in 14 months. At its last meeting of policymakers, the central bank signaled that it could finally pause its yearlong campaign of rate hikes, though a pause would likely only nudge mortgage rates slightly lower.

Low mortgage rates helped fuel the housing market for much of the past decade, easing the way for borrowers to finance ever-higher home prices. That trend began to reverse a little over a year ago, when the Fed started to hike its key short-term rate in a bid to slow the economy and cool the highest inflation in four decades.

The spring homebuying season got off to a lackluster start this year as prospective buyers grappled with higher borrowing costs and a near record-low inventory of homes on the market.

Sales of previously occupied U.S. homes fell 23.2% in the 12 months ended in April, marking nine straight months of annual sales declines of 20% or more, according to the National Association of Realtors. The national median home price fell to $388,800 last month — down 1.7% from a year earlier and the biggest year-over-year drop since January 2012.

The modest pullback in home prices reflects heated competition among buyers, especially those vying for the most affordable homes. At least one-third of the homes sold last month went for more than their list price, according to the NAR.

The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, rose to 5.97% this week from 5.75% last week. A year ago, it averaged 4.31%, Freddie Mac said.

Source: abcnews.go.com

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The real estate market carnage continues with all the major iBuyers pausing home purchases thanks to the coronavirus.

Zillow Offers Pauses Purchases

This morning, Zillow announced that it had stopped home buying via Zillow Offers amid the “market uncertainty” related to COVID-19.

While it’s unclear if it was mandated, they did note that the move was “in response to local public health orders related to COVID-19,”and also to ensure the protection and safety of its staff, customers, and partners.

Specifically, some states like California have implemented emergency orders requiring individuals to stay at home and cease all non-essential business, which includes some real estate activities.

The company said it would continue to market and sell homes through Zillow Offers, despite halting open houses for its homes last week.

Zillow said it ended 2019 with 2,707 homes in its inventory, and as of March 19th, had reduced it to approximately 1,860 homes.

All 24 markets where Zillow Offers currently operates are affected by the move.

Opendoor Cash Offers Suspended

Meanwhile, Opendoor is putting cash offers on hold as a result of COVID-19.

In a statement posted on their website, the iBuyer said, “If you’re currently in our offer process, be on the lookout for communication from us. If you’re not, here’s how we can still help with your home sale.”

In terms of that help, they are still allowing third parties to make a cash offer for your property, as opposed to Opendoor itself.

If you take them up on that option, you can still skip the showings, prep work, and choose you own close date.

They said they’ll get back to customers via email within 2-3 days if eligible.

You can also use one of their partner real estate agents to list your home in traditional fashion, though I think we all know selling right now probably doesn’t make a ton of sense unless absolutely necessary.

Offerpad Might Be on Hold Right Now

I visited Offerpad’s website to see how they were being impacted, but couldn’t get a totally clear answer.

However, they do have an “important notice” posted at the top of their website that reads:

“To ensure that our customers, employees, and third parties are safe to the best of our ability, our processes have been subject to temporary changes.”

“We need to ensure that all services, including third parties, associated with a customer’s purchase or sale will be available. We appreciate your flexibility during this time.:

So there’s a good chance they are following suit and putting new purchases on hold as well.

As reported last week, RedfinNow was the first to temporarily halt home purchases, as indicated in an 8-K filing.

Two Takeaways to Consider

One issue, as mentioned by Zillow, is that real estate isn’t necessarily an essential business activity.

At least when it involves investors trying to make money by buying and selling real estate.

For everyday Joes looking to buy or sell a home, I assume it’s still okay to do so. It certainly can be argued as essential in certain situations.

However, a bigger concern is if this is the canary in the coal mine.

If billion-dollar companies like Redfin and Zillow aren’t interested in buying our homes, what does that say about the health of the real estate market?

I think the worry is if this situation doesn’t improve in the next several months, we might see scores of foreclosures flood the market, which could lead to lower home prices.

Conversely, if the government and loan servicers get ahead of it and work hard to help unemployed homeowners, things might turn out okay.

And really, with all the spending going on, there’s bound to be inflation, which could benefit homeowners as the world recovers.

Source: thetruthaboutmortgage.com

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No matter what kind of apartment building you live in, units that come with their own private balcony are among the most coveted. Having a small outdoor space like a balcony for your apartment opens up a world of entertaining possibilities, from dinner parties to simply enjoying the view with your morning coffee. Our apartment balcony ideas take you through all four seasons of festivities and relaxation.

But there’s a catch: Unless you live in an area where the weather and climate are mostly the same throughout the year, you’ll need to decorate your balcony in accordance with the seasons. That doesn’t just mean fun seasonal decorations for different holidays like the Fourth of July or Christmas, but weatherizing it so the space is actually usable from installing rain protection during the rainy season to adding a safe outdoor heater during winter. Apartments that come with balconies typically fetch higher rents than other units without, so you don’t want to let it go to waste for half the year. Reclaim and fully enjoy your balcony space with these year-round apartment balcony decorating ideas.

outdoor area balcony ideas

How to decorate your apartment balcony space for all seasons

Unsure how to decorate your tiny balcony for winter so it’s both cute and cozy? Don’t have a ton of floor space but still want to add plants to your small balcony? We’ve got you covered.

For each of the four seasons, we’ve got balcony ideas for how to decorate and best use the space. That way, you can enjoy your balcony as a living space and lounge space throughout the year instead of just for a few months.

small balconies can still be decorated for the holidays as long as you make use of vertical space

Winter

Winterize your outdoor balcony — but keep it cute at the same time — with these winter balcony decorating ideas.

Add a space heater

Set up a cozy space heater in one corner to keep things warm and toasty. If you only have a small space to work with, be careful to keep the heater far from flammable objects like curtains or outdoor rugs. For an extra charming touch, choose one of the models that feature fake logs.

If you have enough space, an outdoor heating lamp works as well.

Enclose the outdoor space to keep it warm

Use zippable plastic walls, curtains or privacy screens to keep heat in and keep the cold out by creating a contained indoor space.

This is also for safety reasons. If your balcony is open-air or snow and ice can still get into the balcony through curtains or tarp coverings, you’ll need to prevent them from building up and turning your balcony into a slippery, potentially dangerous ice zone. Keep a shovel or broom on hand as well.

Add winter plants

Instead of summertime flowers or fall cornucopias, pick out some seasonal or hardy, cold-weather-withstanding plants like miniature conifers. Around the holidays, poinsettias are another nice touch!

Add lots of cozy rugs, blankets and pillows

Gotta stay cozy while enjoying your balcony outdoor space in the winter! Cover your table and chairs, as well as couches and other patio furniture, with plenty of plush, warm throws, blankets, seat cushions and pillows. On the ground, a fuzzy outdoor rug also completes the snug, “cabin in the winter woods” aesthetic.

Light things up with candles

Add candles with seasonal scents like pine to tables and shelves, bringing a warm glow to your outdoor area. But be sure to monitor them and don’t leave them burning unattended. If you don’t feel comfortable with real candles, battery-powered ones also work great.

Make s’mores with a portable mini-firepit

Go all out on the winter season with a mini-firepit to make s’mores, fondue and other cozy foods from the comfort of your own balcony.

Celebrate the season with holiday decor

Tis the season! Whether you celebrate Christmas, Hannukah or another seasonal festivity, deck the halls (or more accurately, balcony and balcony walls), with colorful lights, wreaths, miniature trees and more. Add garlands to your balcony railings, set up a nativity scene on an outdoor table…the options go on and on!

Use a terrarium or small greenhouse to protect plants

If you want to protect plants that don’t do as well in the cold, try adding a small greenhouse or terrarium to shelter them from the elements.

small patio with garden - small balcony ideas

Spring

Spring has sprung, and apartment balconies everywhere should be bursting with life and color! Get your outdoor space ready for the warm season and create your own outdoor oasis with these tips.

Outfit the space with plenty of plant life

Have a green thumb but live in an apartment building that only has tiny balconies? Celebrate the return of greenery by turning your balcony into your own private garden! Potted plants, hanging plants, flowers and more are all great ways to bring greenery and life to your outdoor space. Plus, they’ll all flourish in the fresh air. Just be sure to choose plants that will do well in the apartment environment.

Add hanging planters if you only have a small outdoor space

Don’t have enough square footage or floor space for tons of plants? Install plant hangers from the ceiling instead. You can also hang planters from your balcony railings.

Install a rail planter or vertical garden

Another great option for plant lovers with small balconies is to install planters that hang off your balcony railing. A railing planter won’t take up space on the floor and makes for easy watering (just make sure you’re not dripping on your neighbor down below!)

The exterior wall of your balcony is an often overlooked space when it comes to decoration and utility. Put that vertical space to use with vertical planters. Vertical planters are another easy way to have potted plants in small spaces. Vertical gardening maximizes space, holding lots of small potted plants so you can have everything from flowers to fresh herbs.

Set up furniture

Store away the cold-weather coverings in favor of colorful, warm-weather comfortable furniture like tables and chairs. If you have enough space and love spending time outside, you can even try to install a day bed in one corner so you can lounge.

At the same time, though, you don’t want to overfill the whole space. Give yourself more space to move around by choosing stylish but space-appropriate furniture like a small table or

Choose furniture that’s easily storable

With summer right around the corner, you know what that means? Parties and having friends over! Because of this, you’ll want to make sure your balcony isn’t too crowded or has too much stuff. During spring and summer parties, people can hang out on the balcony to drink, smoke or just chat. You want to have as much access to the entire space as possible so your guests aren’t crowded.

An easy way to seamlessly change the space for parties is by choosing folding furniture and stackable chairs that easily disassemble and can be stored away. Nesting tables are another great option. If you have hanging chairs or hammocks, they should be easy enough to take down for parties.

Choose weather-resistant fabrics

If you plan on leaving your balcony open to the elements during spring and summer, you want to protect your furniture and decor from rain. Choose weather-resistant fabrics or have them treated to be more water-resistant so they won’t grow mold or get discolored.

Jazz up the floor with tiles or rugs

Does the balcony have ugly or uncomfortable flooring that draws the eye, becoming a sad focal point amid all the other thoughtful interior design you’ve done? Hide flooring with colorful, patterned rugs or interlocking deck tiles for a more sophisticated, upscale look.

add rattan or folding furniture to sit outside all summer

Summer

It’s summertime, so spend all your time outdoors on your balcony in the perfect space you created for the season.

Get your grill on

A great idea for how to enjoy your balcony in summer is by adding a grill! If space permits, stick a grill into a corner to host summertime barbecues and dinner parties. Just be sure to make sure your apartment complex allows grills on balconies, as some only permit them on a small patio area.

Add fans to beat the summer heat

Install ceiling or small table fans to keep airflow going on hot days.

Add a hanging chair to maximize room on your small balcony

Only have a small balcony space with not enough room for lots of balcony furniture? Install a hanging chair, swing or hammock to maximize floor space.

Elevate the space with tall plants

One of the best small balcony ideas for making the space seem bigger is adding the illusion of height. Lengthy palms and tall plants help the space open up, as well as make you feel like you’ve entered a literal urban jungle.

Add a festive feel with string lights

Swap out the colorful holiday lights for chic string lights to illuminate your balcony at night. Just make sure they’re intended for outdoor use. Even better: a great alternative to regular lights is eco-friendly solar string lights. That way, you don’t need to plug them in or swap out batteries.

Add new summertime decor

Break out the Independence Day decorations, watermelon-themed decor and more to help your balcony match the summertime vibe. That calls for new throw pillows, light-colored cushions and fabrics, wafting flags and banners. Have fun and get creative!

a small square footage space outdoors feels cozy in the fall with an outdoor rug and something warm to drink

Fall

Make your balcony feel like fall in all its color-changing foliage glory with these tips.

Add a cozy rocking chair

Sit back, relax and watch the leaves change while snuggled up with a good book and hot drink in a rocking chair.

Keep things spooky with Halloween or autumnal decor

From pumpkins and jack-o-lanterns to putting a cornucopia on your balcony table, there is no end of ways you can decorate the space for fall. Wind garlands around railings, hang fake spider webs (just make sure birds won’t get caught in them), carve jack-o-lanterns and set up tons of candles for an extra spooky atmosphere.

Keep it clean

Keep a broom on hand to sweep fallen leaves and other debris

Start adding the cold weather cozies

It’s time to start breaking out the blankets, throws and snug rugs again as the days get colder.

Use our apartment balcony ideas to stay practical and stylish

Make your balcony the place to hang out and be no matter the season. And as you can see, you don’t have to be a professional interior designer to turn an open balcony into an all-season space for socializing, alone time, gardening or whatever you want to do.

Still looking for a place with an outdoor getaway built right in? Find your next home here.

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This is a guest post from Joanna Lahey, an associate professor of economics at the George H.W. Bush School of Government and Public Service at Texas A&M University and the National Bureau of Economic Research (NBER).

Ellen’s note: Joanna has written four articles about health insurance. This is the first, and every Saturday for the next month, we’ll be publishing one. Given the readers’ concern over the cost of health insurance as well as the ability to get insurance, we think her articles will be a great addition to GRS.

We save for retirement in order to smooth our consumption over time. Money saved now when we have income allows us to eat more than cat food when we’re retired and not bringing in as much.

Mikey eating cat food

Insurance works in much the same way, except instead of smoothing our consumption over time, we’re smoothing it over conditions of the world. In the good state of the world, the one in which we haven’t been hit by a bus, we spend money on insurance. In the bad state of the world, the one in which the bus hits us, the insurance company pays out money to help compensate us for our medical care.

People value this insurance because they are risk averse. For most people, losing money hurts us more than gaining the equivalent amount of money makes us happy. We’re willing to pay a little extra during good times to offset the bad times.

Of course, in reality it’s a little bit more complicated than that. Insurance companies have an incentive to keep you from getting into that bad state of the world, so they might pay for annual check-ups and other sorts of preventive care. Additionally, some people like the idea of using health insurance as a prepayment for expected medical expenses. However, preventive care and prepayment are not technically insurance even if they are bundled in with many policies. The point of insurance is to make the bad times less bad by paying for insurance during the good times and accepting a payout during the bad times.

In an ideal world, this insurance system would just work and the free market could handle everything. People would pay their expected cost of insurance into the insurance system and the insurance would pay out for the people who were unlucky enough to get hit by buses or have other health problems.

Unfortunately, there’s a problem. People who know that they are likely to use medical care value insurance more than people who believe they will never get sick. The problem arises when people know their expected medical costs better than insurance companies do. This situation is called “asymmetric information” — one party (you) knows more than the other party (the insurance company) does.

Death Spiral in the Insurance Market

In this world of asymmetric information, there is theoretically no way for an insurance company to make a profit, or to even exist in the private market. If the insurance company sells insurance at the average cost of medical care — what it expects to pay out on average — then people who know deep down that they’re healthy are going to prefer not to buy the insurance. People who know they are likely to get sick are more than willing to pay the average cost of medical care and sign up in droves. When that happens, the average cost of medical care that the insurance company sees goes up, so they have to charge higher rates for coverage. That means that the folks who expect to have ingrown toenails but no other health problems will drop coverage while the people who expect to get diabetes will stay on. That drives up the average cost of health insurance further, which means that the next healthiest group of people will stop buying coverage and only the most expensive stay on. Eventually only the most expensive person will be willing to buy insurance (and he or she probably won’t be able to afford it). The market fails, and insurance cannot be offered. The private insurance market is broken.

Asymmetric information and this “lemons problem” (the term coined in an article by George Akerlof) are why it is so very difficult to get coverage on the private market and why the coverage is so expensive. It’s also why private coverage deliberately doesn’t cover conditions like pregnancy if it can legally choose not to.

Side note: You may have noticed that even though the private health insurance market is broken, it still exists. That’s because of that risk aversion we talked about in the previous section — most people value insurance more than its expected cost. If they value it enough, they’re willing to pay more and are able to get over the death spiral. Incidentally, David Cutler, one of the main architects of the Affordable Care Act, argues that the individual mandate is not needed — we just need to get the price low enough and risk aversion will get people to buy. Jon Gruber, another of the architects, disagrees — he doesn’t think it is likely that risk aversion will overcome the adverse selection problem.

Why is Health Insurance in the U.S. Bundled With Employment?

The solution to the problem? Group markets for insurance. In a group market, people are in a group for some reason that has nothing to do with health insurance. Working for the same employer functions especially well because adults who work are healthier on average than adults who don’t work. Everyone in the group is charged the same amount for insurance, and the average cost is low enough that the downward death spiral doesn’t occur. The bigger the group, the more risk and costs are spread out and the happier the insurance company is. Large companies get cheaper insurance rates than smaller companies because it’s less likely with a large company that the boss is getting insurance because he just found out his wife has cancer (and even if he did, that cost is spread out across more workers).

Doesn’t that argue that we should have just one group for everybody? Well, yes. However, for historical reasons (price controls during WWII, as several folks pointed out in the comments of this Ask the Readers post), we ended up with our groups being attached to employment. That’s fine if you’re employed by a large firm that offers insurance (or married to someone who is), but makes things more difficult if you’re not.

Why don’t we just tear the system down and start from scratch? Well, it is difficult to destroy a private industry that is around 7 percent of our economy, especially when said industry has powerful lobbyists. It may be more efficient to have government-provided health insurance, but the costs of getting to that point would be large.

Given our current political and institutional situation, we can still get to universal health care even if single-payer insurance is unlikely. In the U.S. that means something like the Affordable Care Act, with its universal mandate, subsidies, and regulations prohibiting preexisting-condition exclusions or charging prices based on anything other than age and tobacco status. I will talk more about the basics of the Affordable Care Act in a future post.

How Much Insurance Should be Provided?

In the ideal world, insurance companies would provide full insurance. They would pay 100 percent of your medical care and maybe something to compensate you for pain and suffering. You’d have to pay a larger premium to get the insurance, but it would be worth it because if you got hit by a bus you wouldn’t be out of pocket for anything. Unfortunately, this is not an ideal world and people are flawed.

  • If you knew you were going to get compensated, you might be less careful about looking both ways before crossing the street.
  • If going to the doctor is completely free, you might go in for a sniffle right away just to be on the safe side rather than waiting a few days.
  • If someone else is paying, you might move to more expensive infertility treatments faster than if you have to pay the bill yourself.
  • Your doctor might decide to do extra tests that only have a small chance of finding anything, because why not?

We call these changes in behavior caused by the program availability “moral hazard.” Moral hazard occurs when people do bad things they wouldn’t have done if they were bearing the full cost of their actions.

Political economy side note: The trade-offs caused by moral hazard are one of the main points of disagreement between political parties. Public programs help deserving people who need help, but they can also cause people to do bad things in order to qualify for the public programs (through moral hazard). Programs that help children tend to be popular with politicians on both sides because children don’t have moral hazard with respect to government programs — they’re not the decision-makers.

In order to keep moral hazard down, it is optimal to provide less than full insurance. So insurance companies don’t pay the full amount of every bill. That’s why we have deductibles and co-payments and coinsurance.

Terms You Need to Know

Premium: The (usually monthly) amount that you pay to the insurance company to buy insurance. (Mine is $693/month for my dependents and me.)

Deductible: Some amount of money that you have to pay before the insurance starts paying anything. (Mine is $750.)

Co-payment: A flat dollar amount that you pay when you show up at the doctor (or the hospital) no matter how much your visit actually costs. (Mine is $35 for in-network and $45 for out-of-network.)

Coinsurance: After you reach your deductible, you may still be responsible for some of the costs. Coinsurance is a percent of the costs that you pay. (Mine is 30 Percent.)

Sometimes economists will group all three of these together: deductible, co-payment, and coinsurance under the umbrella term of “co-payment.” We do this because they’re all ways of cost-sharing and thus reducing moral hazard. Living in Texas, I get all three types. The bill for my daughter’s birth was $750 for the deductible, $35 co-payment for the doctor, and 30 percent coinsurance of $2,345 + $191 + $218 is $826 for my share of the rest (assuming that all of the bills have finally come in). So a total bill of $1,611.

That’s a lot of information about the basics of health insurance. Next time I will talk about the pros and cons of different kinds of insurance you can get in the U.S. (PPO, HMO, HDHP, ACO).

Source: getrichslowly.org

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All 12 Federal Reserve districts have seen issues with a lack of housing inventory, which is largely due to existing homeowners holding back on listing their homes after previously locking in low mortgage rates. 

Demand from the buyer side has remained steady or increased, however, and new home builders have responded to inventory shortages by increasing speculative inventory production, according to the Federal Reserve Beige Book, released Wednesday. 

The Beige Book is a compilation of data and interviews with bank and branch directors, community organizations and economists from on or before May 22.

“Residential real estate activity picked up in most Districts despite continued low inventories of homes for sale,” the report states. 

The Beige Book also notes that “home prices and rents rose slightly on balance in most Districts, after little growth in the prior period.”

In return, the lack of inventory of homes for sale pushed demand for rental properties in some areas — including New York, Chicago, St. Louis, Kansas City Federal Reserve districts.

Following are excerpts of statements on housing conditions from each of the 12 Federal Reserve districts. 

***

Boston – Contacts around the District attribute the still-low sales numbers to low inventories more than to weak demand, as slightly lower mortgage rates have helped bring more buyers to the market.

House price appreciation has slowed on average but remains slightly positive, with the exception that home prices in Massachusetts (not including Boston) have experienced modest declines from a year earlier. The modest price growth in the Boston area marks a trend reversal from the preceding few months. 

Contacts anticipate that, despite healthy buyer demand, home sales are likely to experience only a modest seasonal increase moving forward, owing to extremely low inventory levels.

New York – The residential sales market has been strong across the District. A New York City-area contact reports that the sales market in and around New York City has picked up strongly in recent weeks after a brief pause in early April, which was due to uncertainty in the banking sector.

After a slow start to the year, housing markets in upstate New York have also started to pick up, with bidding wars and multiple offers becoming more common. Inventory remains exceptionally low and is restraining sales activity in much of the District. A key factor suppressing new listings is the prevalence of homeowners with historically low interest rates on their existing mortgages, reducing the incentive to sell and move.

A strong economy and relatively high mortgage rates have pushed some movers to the rental market, boosting demand.

Philadelphia –  High interest rates have continued to dissuade existing homeowners from listing their house and losing their low interest rate. Existing home sales have fallen moderately in this district, and prices have continued to rise as the market heats up again. New home builders have benefited from the unseasonably modest sales of existing homes as the resale market has slowed. 

Cleveland – Demand for residential construction and real estate has stabilized in this District, and contacts attribute this stabilization to the arrival of spring and flattening interest rates.

Homebuilders have reported an increase in speculative construction projects in this District, as many buyers want to purchase and move into homes immediately, in part to avoid further rises in interest rates.

Richmond – Residential real estate respondents indicate in the report that the spring market is off to a good start, with sales prices continuing to appreciate, but not at the same pace as last year. For-sale inventory remains constrained due to fewer people putting their homes on the market, but buyer traffic has been steady while the days on market has increased slightly in the last month. 

However, fluctuations in mortgage rates have caused buyers to pull back, with pending sales and closed sales both down in this District. Builders have been offering strong incentives to close deals. 

Atlanta – Housing demand throughout the District has remained strong despite interest rate and home price volatility. Though home sales are down compared to a year ago, sales in many markets in this District have increased on a monthly basis, as buyer sentiment has modestly improved. 

The supply of existing homes for sale has remained low as homeowners have showed increased hesitancy to list homes for sale, especially if they financed at a low interest rate. Home prices remain down from peak levels but have recently shown month-to-month improvement.

New home builders have responded to inventory shortages by increasing speculative inventory production, and some have begun to reduce buyer incentives.

Chicago – Residential construction activity has been down modestly in this District. Contacts report that high-interest rates have led some projects to be postponed or canceled and that while construction costs had fallen, the decline isn’t enough to offset higher financing costs. 

Residential real estate activity has decreased modestly as well. Prices and rents have declined, and the low inventory of homes for sale has helped to prevent larger declines.

However, there have been reports of rising retail rents in some areas because of a lack of high-quality new construction.

St. Louis – Rental rates for residential real estate have increased slightly in this District. The number of new listings in residential real estate have dropped sharply in Louisville since our previous report, while new listings in the Memphis and Little Rock regions have remained unchanged. Seasonally adjusted home sales have remained unchanged since the previous report. 

Minneapolis – Residential construction has remained subdued. Single-family permitting in April was more than 40 percent lower year over year in the Minneapolis-St. Paul region; most other large markets in the District saw even bigger declines. Discounts have started to appear for some speculative developments.

Closed (residential real estate) sales in April fell notably year over year across the District, with many larger markets seeing declines of 30 to 50 percent. Median sale prices have declined in western and central Montana and have been flat in several other markets. 

Kansas City – Housing rental rate growth has remained elevated in several western District states, but the pace of increases has declined broadly and swiftly from the growth rate experienced during the past year. 

Dallas – Housing demand broadly has held up in the Dallas District, though sales have continued to be weaker than a year ago. Contacts have noted a decent spring selling season, with prices largely stable, and builders have been able to raise prices slightly in selected areas.

Outlooks have been cautious, however, with some voicing concern about whether demand would hold up beyond the spring selling season.

San Francisco – Activity in residential real estate has slowed further in this District. Contacts across the District have reported stable demand for single-family homes, although high mortgage rates have restrained prices. Existing single-family inventory has been low, and owners appeared hesitant to forego their existing low-rate mortgages by listing their homes.

Despite reported improvement in the availability and cost of materials, construction of new homes has been flat-to-down as developers responded to higher financing costs.

Source: housingwire.com

Apache is functioning normally

On average, it costs $23,890 a year to attend an out-of-state school versus $9,410 for an in-state school. That’s $14,480 more per year you could pay — just to attend a college in a different state than where you grew up.

Source: Giphy.com

Over four years, you could end up paying $60,000 more than someone who attends school in-state. So, what are some ways you can lower the cost of out-of-state tuition? Here are seven of our biggest tips.

What’s Ahead:

1. Research Regional Reciprocity Programs

Many schools have “regional reciprocity agreements” or “tuition exchange programs” that let you attend certain out-of-state colleges for in-state rates.

For instance, 18 colleges in Georgia offer in-state tuition to residents of border states. This includes Alabama, Tennessee, North Carolina, South Carolina, and Florida.

On a much broader scale, several states have banded together to create regional reciprocity programs that give you reduced out-of-state tuition at hundreds of public and private schools.

The four biggest regional reciprocity programs include:

  • Midwest Student Exchange — Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin.
  • The New England Regional Student Program — Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
  • Academic Common Market — Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
  • Western Undergraduate Exchange — Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming, and the Commonwealth of the Northern Mariana Islands.

Some schools will offer in-state tuition to any student in a neighboring state, while others may require you to meet certain criteria — such as having a specific high school GPA or declaring a certain major.

MU30 Tip: Already have a few colleges in mind? Look on their websites or contact financial aid to see if they have any tuition exchange or reciprocity programs in place.

2. See If You Qualify for a Tuition Waiver

In some cases, you may be able to get a tuition waiver that allows you to attend an out-of-state college at a reduced rate. Tuition waivers are usually granted to students with special circumstances:

  • You (or someone in your immediate family) is a veteran or active duty military member.
  • You were valedictorian or a high achiever.
  • You’re enrolled in a special degree program, such as STEM or health care.
  • You work for the school you wish to attend.
  • You were or are a part of the foster care system.
  • You’re a nontraditional student.
  • You’re of Native American heritage.
  • You have a financial hardship.

To see if you qualify, search for the phrase “tuition waiver” on your favorite schools’ websites. This should pull up a list of all the tuition waivers currently available. (For example, I found 13 waivers on the University of Washington’s website.)

3. Apply for Out-of-State Scholarships

There are several scholarships specifically for students who are attending college out-of-state. These scholarships can help you cover the costs of tuition, room and board, and other expenses.

To find out-of-state scholarships, start by checking with your college’s financial aid office. There’s a good chance the school has scholarships earmarked for nonresidents.

From there, do a scholarship search using a tool like the College Board Scholarship Search or Fastweb. You may find some private scholarships to help lower your out-of-pocket costs.

Read more: Scholarships and Grants: How To Score Free Money for College

MU30 Tip: Does your parent or guardian work in higher education at one of these Tuition Exchange member schools? If so, you can apply for a reciprocal scholarship that lets you attend hundreds of schools in the U.S., Canada, Greece, Morocco, the United Arab Emirates, and Switzerland at a free or reduced rate!

4. Think About Becoming a Resident Assistant

If you’re planning on attending college out-of-state, one way to lower your costs is to become a resident assistant (RA). RAs typically receive free or reduced-cost housing in exchange for their duties, which can include things like leading tours and organizing social events.

So while you may not get a tuition discount, it could help you save on housing while you’re there.

To become an RA, start by talking to your college’s housing office. They should be able to tell you about any open RA positions and their requirements. You may also need to fill out an application and go through an interview process.

5. Negotiate Out-of-State Tuition With the Financial Aid Office

It’s not widely advertised, but you can technically negotiate the cost of tuition and fees with the financial aid office. In fact, doing so could save you anywhere from 5% to 15%. On a four-year degree that costs $60,000, that’s a savings of $3,000 to $9,000.

Beyond negotiating, the financial aid office is also a way to find out what types of aid are available to you as an out-of-state student.

Read more:

6. Become an In-State Resident

This tip may seem a little far-fetched, but hear me out. If you’re taking a gap year, for instance, and have time to establish residency in the state where you want to attend college, it could be worth it.

Every state has different requirements for residency, but you’ll typically need to live there for at least a year before you can apply for in-state status.

Start by researching the requirements for the state you want to move to, then get working on completing them. This could include getting a job or an apartment in the state, getting a driver’s license, and more.

7. Look for Schools With Lower Out-of-State Tuition Rates

If all else fails and there’s no way for you to get reduced out-of-state tuition, another option is to simply look for schools that charge lower rates for out-of-state students.

MU30 Tip: Want to see which colleges have the lowest tuition rates? Check out this affordability calculator from the U.S. Department of Education.

Once you have out-of-state tuition rates for different colleges, you can start to compare your options and make a decision about which school is the best fit for you.

Read more: Not Enough Financial Aid? Here are 10 Ways To Pay for College

Bottom Line

Out-of-state tuition can be costly, but there are ways to minimize costs without racking up a ton of student loan debt. Use these tips to see how much you can save.

Featured image: Alexander Lukatskiy/Shutterstock.com

Read more:

Source: moneyunder30.com

Apache is functioning normally

Mortgage rates rose at their fastest pace in decades in 2022 and if only one thing could take the blame, it would be inflation.  There are several ways to link inflation to upward pressure on rates, but the simplest is to consider that rates are based on bonds and inflation lowers the value of bonds.

In other words, if you are an investor who buys mortgages, you might be willing to accept a 6.5% rate of return today.  Now let’s say inflation skyrockets.  If you still charge 6.5%, the payments you receive will buy a lot less “stuff.”  So you have to increase your rates in order to get the same financial benefit.

Because of the inflation focus, the biggest inflation reports have been closely-watched indicator for rate momentum for more than a year now.  None are bigger than the Consumer Price Index (CPI), and the latest installment will be out on Wednesday morning, May 10th, at 8:30am Eastern Time. 

There is always a catalog of multiple professional forecasts for big economic reports.  Markets adjust to those forecast levels, or close to them well ahead of the official release of the data.  Then if the data hits the forecast, markets don’t need to move much.  But if CPI were to fall much higher or lower than forecast, the market would view this as an indication that inflation was trending higher or lower relative to previous expectations.  Rates would react accordingly (i.e. higher for high inflation and lower for low inflation). The farther from forecast the actual number falls, the bigger the reaction could be.  

As for today, there was just a bit of extra upward momentum for interest rates with the average lender moving up by less than an eighth of a percent for a conventional 30yr fixed loan.  This level of volatility isn’t really worth writing home about considering how big Wednesday might be.

Source: mortgagenewsdaily.com

Apache is functioning normally

Most mortgage lenders offer both home purchase loans and refinances. But Direct Access Funding is all about the refis.

In fact, the Southern California based lender refers to itself as a the “refinance division” of its parent company.

Seeing that most refinances are driven by the desire to obtain a lower mortgage rate, there’s a good chance their pricing is competitive.

They say they’ve got the best refinancing rates period and quality customer service to boot, which their reviews seem to back up.

So if you’re an existing homeowner looking for a better mortgage, they could be worth looking into. Let’s dig into the details.

Direct Access Funding Fast Facts

  • A direct-to-consumer mortgage lender that offers home refinance loans
  • Founded in 1998, headquartered in Irvine, California
  • The refinance division of Absolute Home Mortgage Corporation
  • Licensed to do business in 15 states and the District of Columbia
  • Their parent company funded $2 billion in home loans last year
  • Claim to offer the best mortgage refinance rates

As the name implies, Direct Access Funding is a direct-to-consumer mortgage lender based in Irvine, California, which is in the heart of Orange County.

Instead of a physical branch network, they work remotely with customers from a central call center to help you process and close your loan.

The company is located near many other mortgage lenders, including CashCall Mortgage, ClearPath Lending, loanDepot, and Watermark Home Loans.

As noted, they dabble only in mortgage refinancing, meaning their target market is existing homeowners as opposed to home buyers.

They are actually a division of Absolute Home Mortgage Corporation based out of Fairfield, New Jersey, which originated about $2 billion in home loans last year.

They’re currently licensed to do business in 15 states and the District of Columbia.

Those states include Arizona, California Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, and Virginia.

How to Apply with Direct Access Funding

To get started, you can call them on the phone or simply visit their website and begin on your own.

Your best move might be to get in touch with a licensed loan officer first to discuss mortgage rates, lender fees, and overall eligibility.

Once you get the information you need to proceed, you can fill out their digital mortgage application online.

It allows you to complete the form 1003 electronically, eSign disclosures, and upload supporting documents via a secure portal.

Once your loan is submitted, you’ll be able to manage your loan online from start to finish.

It’s unclear if the processing and underwriting of your loan is completed in-house or at their parent company’s headquarters.

Regardless, their goal is to make refinancing stress-free and they employ the latest technology and solutions to make that happen.

Because they focus on existing homeowners only, the process should be faster than traditional banks and lenders.

Loan Programs Offered by Direct Access Funding

  • Rate and term refinances
  • Cash out refinances
  • Streamline refinances
  • No cost refinances
  • Conforming loans backed by Fannie Mae and Freddie Mac
  • FHA loans
  • Fixed-rate mortgages in various loan terms

Direct Access Funding seems to be solely focused on mortgage refinances for existing homeowners.

This includes rate and term refinances, cash out refinances, and streamline refinances.

They can also structure your loan as a no cost refinance through the use of lender credits so nothing needs to be paid out of pocket.

In terms of loan types, I believe they only originate conforming loans backed by Fannie Mae and Freddie Mac, along with FHA loans.

It’s unclear if they offer VA loans or jumbo loans as well.

You can get a fixed-rate mortgage such as a 30-year fixed or a 15-year fixed, and possibly an adjustable-rate mortgage too.

They lend on primary residences, second homes, and investment properties, including condos/townhomes.

All in all, their product menu isn’t vast but should cover most of the population.

Direct Access Funding Mortgage Rates

While they claim to have the “best” mortgage rates for a refinance loan, they don’t list their rates online. At least not on their website.

However, you might find them on third-party websites alongside other lenders in mortgage rate tables.

My assumption is their rates are very competitive since they’re a branchless, refinance-only lender.

And because refis are generally pursued to save money, they will need to beat your existing rate to earn your business.

But do take the time to compare their quote to other lenders to be sure. And also ask about any lender fees, such as a loan origination fee or application fee.

I’d classify them as a low-cost mortgage lender because of their lightweight business model (lack of branches and advertising), which is a good thing if you’re looking for lowest possible rate/fee.

Direct Access Funding Reviews

On Experience.com, Direct Access Funding has an impressive 4.91-star rating out of a possible 5 from over 1,000 customer reviews.

You are able to filter the reviews by loan officer to see how certain individuals have performed in the past. If a certain person stands out, be sure to ask for them when calling in.

Over at Google, they have an even better 4.9-star rating from nearly 200 reviews, which is pretty close to perfection.

Lastly, they’ve got a 4.9 rating on Bankrate from 15 reviews, with 100% of reviewers indicating they’d recommend the company to others.

Their parent company Absolute Home Mortgage Corp. is an accredited company with the Better Business Bureau (since 2013) and currently holds an ‘A+’ rating based on complaint history.

All of these reviews give them some legitimacy, even if they’re not a household name like some of the larger lenders out there.

In closing, Direct Access Funding seems to be a streamlined refinance shop that could be a good fit for an existing homeowner looking for a lower mortgage rate or cash out.

They’re probably best suited for those with plain vanilla loan scenarios (e.g. W-2 employee, conforming loan amount, single-family residence).

If that’s you, they might be able to beat your existing mortgage rate and save you money each month.

But those with more complex loan scenarios (self-employed borrowers, investors, jumbos) may want to look elsewhere.

Direct Access Funding Pros and Cons

The Pros

  • Can apply for a home loan online in minutes without a human
  • Offer a digital mortgage application (paperless process)
  • Say they offer the best refinance rates
  • Excellent reviews from past customers
  • Parent company is accredited, A+ BBB rating

The Cons

  • Not licensed in all states
  • No branch locations
  • Only offer refinancing products (not home purchase loans)
  • No mention of lender fees

Source: thetruthaboutmortgage.com

Apache is functioning normally

One thing I love about Millennials and Zoomers is how freely we share advice.

Case in point, there are now countless wealth coaches and personal finance gurus on TikTok recording their best tips on saving, investing, and achieving financial freedom faster.

And we’re hungry for their advice. According to CNN, the hashtag “#personalfinance” alone has a total of four billion views, with “#financialliteracy” and “#financetiktok” not far behind.

However, while the intent is always sound, the tips themselves aren’t. There are some misguided and potentially devastating personal finance myths being perpetuated on TikTok these days, so I am here to address them head-on.

Let’s debunk seven of the most common TikTok money myths before you make a potentially dangerous financial move.

What’s Ahead:

1. “You can (and should) get rich quick”

Debunked: 7 TikTok Money Myths - "You can (and should) get rich quick"

The implication

“Get rich quickly and easily by following my personal finance advice.”

Here’s how to instantly spot a personal finance influencer who abides by a “get rich quick” philosophy: just look for the lime green Lamborghini in the background.

Once they’ve given you a few seconds to lust after their six-figure Italian whip, they’ll start telling you how they “turned $5,000 into $723,000” by following “three simple rules of investing” or some such promise. Sounds appealing.

The reality

Multiplying money on that scale, in that little time, always involves a staggering amount of risk, luck, or both. This is assuming, of course, that the influencer is even being 100% truthful – and that background Lambo isn’t a rental.

It’s entirely possible that this person really has gotten extremely lucky on some clandestine investing opportunity, but lottery winners aren’t financial advisors.

Actual financial advisors, and their very rich clients, will give you this advice: 

“Get rich slowly.”

If you wouldn’t spend your life savings on lottery tickets, you shouldn’t get your financial advice from TikTok influencers who got lucky, either. The key is to get rich without the risk, and here’s exactly how to do it, step-by-step.

2. “Day trading is easier than you think”

The implication

Historically, only the rich and well-connected could make money on the stock market. But now that we have apps like Robinhood and Webull, everyday investors like you and me can buy, sell, and trade stocks ourselves, getting rich in the process just like day traders on Wall Street.

The reality

97% of day traders lose money.

That’s according to a large-scale study of day traders, where the researchers concluded:

“We show that it is virtually impossible for individuals to day trade for a living, contrary to what course providers claim.”

By contrast, “only” 70% or so of gamblers in Vegas lose money, according to the Wall Street Journal. So your money is safer on the roulette table than taking a TikTokers’ investing advice (but still, don’t gamble).

3. “Rich people look rich”

Debunked: 7 TikTok Money Myths - "Rich people look rich"

The implication

Earn big, spend big. As your income level rises and you start to feel “rich,” it’s time to start acting like it. Get a luxury apartment, lease a Mercedes, and don’t hesitate to buy that $2,000 purse.

Besides, what’s the point of working hard if you’re not playing hard?

This one is definitely more of an implication than a direct piece of advice. I don’t know of any TikTokers who are outright saying “spend all of your money” – but there are certainly plenty who are leading by example.

The reality

Rich people become rich precisely because they don’t spend money – they invest it. There’s a saying by famous-yet-frugal YouTuber Scotty Kilmer that I think about all the time:

“Broke people buy BMWs, and rich people buy Toyotas.”

Rich (or soon-to-be-rich) people know that if they buy a Toyota instead of a BMW at age 30, and invest the $30,000 difference at 10% APY, they’ll have:

  • $77,812 when they’re 40.
  • $201,825 when they’re 50.
  • $843,073 when they retire at 65.

The point of this anecdote isn’t to throw shade at Bimmer, but rather, to highlight how rich people think differently before making a purchase. They don’t think:

“How much can I afford?”

But rather:

“How much can I save and invest?”

In short, rich people don’t lead extravagant lifestyles – they lead frugal, yet comfortable lifestyles now so they can live however they want later.

4. “Live on a shoestring budget”

The implication

On the complete other side of the spectrum, there are TikTokers who advocate a shoestring lifestyle, where rigorous budgeting and extremely limited pleasure spending are the only viable pathways to financial freedom.

The reality

It’s totally OK to buy nice things and treat yourself.

In the previous example, yes, a BMW costs $30,000 more than a Toyota – and if you invest that money instead of buying a fancier car, you’ll have a fortune waiting for you by retirement.

That being said, if the BMW brings you joy and makes you happy (and you can afford it), buy it.

The key to achieving financial mindfulness isn’t to spend less – it’s to spend more mindfully on the things that truly matter to you. There are influencers out there who say you should stop going out to eat cold turkey because a restaurant meal for two can easily exceed $60 or even $100.

But financial mindfulness says that if that meal helps you build a relationship with someone, it’s worth it.

Draconian saving can be just as misguided as wanton spending. The key, then, is to determine how much you can safely spend each month, and then to spend that money on the people and things that bring you the most joy.

5. “Cryptocurrency will make you rich”

Debunked: 7 TikTok Money Myths - "Cryptocurrency will make you rich"

The implication

This one’s pretty straightforward, and I have heard it straight from countless TikTokers’ mouths: crypto will make you rich.

Forget the corrupt, manipulated stock market – Bitcoin, Ethereum, and Dogecoin will bring prosperity and financial salvation to Millennials and Zoomers.

I mean, what other investment vehicle has provided anything even close to the 750,000,000% ROI that Bitcoin has since 2011?

I got rich off crypto and you will, too – hop aboard before it’s too late.

The reality

Cryptocurrency is like a fast-moving, rickety roller coaster at the county fair. The foundation hasn’t completely crumbled, but the wooden boards and screws holding it up are falling off with each passing car.

Hop aboard the crypto train at your own peril.

It’s true that Bitcoin has had a miracle run since 2011, rising from $0.008 to a peak of around $65,000 in April 2021 and making a lot of people very, very rich. But even diehard crypto fans have acknowledged that a “Bitcoin winter” is coming – that is, if it hasn’t already.

The Bitcoin winter is just one of the many huge risks to a crypto investment. The others (like China’s clampdown on mining) are fast approaching the roller coaster’s foundation with a sledgehammer.

Can Bitcoin still make you rich? Maybe, but there are plenty of safer rides at the carnival.

6. “Just copy the investments of rich people”

The implication

You can’t copy athletes to win gold medals, nor can you copy New York Times Best Sellers to sell more books.

However, you can totally copy the investing strategy of rich people to get rich.

In fact, they want you to copy them – either because your investment makes their investment more valuable, or simply out of the goodness of their heart. Warren Buffet famously shares his trades with the public so they can borrow and benefit from his wisdom.

So why spend 14 hours a day researching good trades when you can just copy someone else’s homework – especially when they ask you to?

The reality

Rich people can afford to make extremely risky investments and lose money that you and I can’t afford. For that reason, they shouldn’t always be followed into battle.

Warren Buffet is also famous for admitting when he’s made a mistake. In 2014, he confessed that he’d held onto shares of Tesco for way too long, costing him and his investors $444 million. Berkshire Hathaway’s investors may have been able to shrug off the loss, but any outsiders emulating Buffet’s moves may have been screwed.

Copying the investments of rich people may be a viable strategy if their investments fit within your financial goals and risk tolerance. For help determining whether that’s the case, you want to talk to a wealth advisor.

7. “You don’t need a wealth advisor”

Debunked: 7 TikTok Money Myths - "You don't need a wealth advisor"

The implication

Thanks to zero-commission trading platforms, you no longer need to buy and trade stocks through a sweaty stockbroker in some Manhattan office.

By that same logic, the emergence of robo-advisors and the fountains of free financial advice on TikTok have eliminated the need for old-fashioned wealth advisors. After all, why give someone 2% of your hard-earned gains when it’s never been easier to invest your money yourself?

The reality

The recent trifecta of online brokers, robo-advisors, and personal finance gurus on social media has done wonders empowering Millennials and Zoomers to handle our money better. The TikTok DIYers certainly have one thing right: it’s never been easier to make your own trades.

However, despite birthing a renaissance in financial literacy, nothing on TikTok can replace the tailored, one-on-one advice you’d get from a professional wealth advisor.

Robo-advisors can personalize your investing strategy to an extent, but they can’t play a direct role in helping you navigate the markets and make good decisions. 

Summary

There’s plenty of sound personal finance advice on TikTok, but it only takes one bad tip to cost you money.

For that reason, it literally pays to separate the wheat from the chaff. Not everyone who’s made money is a skilled investor – some are just lucky.

Read more:

Source: moneyunder30.com