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Bonds Ready to go Big in Either Direction

By:
Matthew Graham

Tue, May 14 2024, 4:45 PM

Bonds Ready to go Big in Either Direction

If you only had 1 day per month to allocate to watching the bond market and getting a sense of rate momentum, Wednesday, May 15th would be that day.  Last month would have been April 10th.  And here’s the rest of the list: https://www.bls.gov/schedule/news_release/cpi.htm.  In other words, it has been and continues to be all about CPI.  Today’s PPI appetizer left the bond market hungry for the main course.  A big miss was offset by revisions and a favorable distribution of internal components.  Wednesday is anyone’s guess in terms of directionality.  All we know is that the size of the potential reaction is as big as it gets when it comes to scheduled economic data.

    • Core m/m PPI
      • 0.5 vs 0.2 f’cast
      • last month revised to -0.1 from +0.2
    • Annual core PPI
      • 2.4 vs 2.4 f’cast/prev

08:40 AM

Inconsequential strength ahead of PPI data.  Initially weaker after the data, but recovering now.  10yr down 0.4bps at 4.485.  MBS up 1 tick (.03).

10:12 AM

Additional strength at 9pm after OPEC headlines and fairly flat since then.  10yr down 2.6bps at 4.463.  MBS up 3 ticks (.09).

02:51 PM

Slow, steady gains all day.  MBS up 6 ticks (.19) and 10yr down 4.4bps at 4.445

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com

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The average homeowner with a mortgage ended 2023 with $299,000 in home equity, according to ICE Mortgage Monitor, which also estimates that the average funds homeowners could tap by borrowing against their home equity is $193,000.

Obviously, that number varies for each individual and depends on factors such as the original down payment, local property values, and the amount of time in the home. But if you have more than 20% equity in your home, using a home equity line of credit (HELOC) to build wealth is a strategy to consider.

Ways to Build Wealth With a HELOC

A home equity line of credit lets you borrow funds as needed (up to a prearranged limit) through a credit draw. This is different from a home equity loan, in which you would borrow a one-time sum of cash. Drawing on your home equity for certain expenses could help grow your wealth over time, if it financially makes sense. Here are some options to consider.

1. Home Improvements

A HELOC works well for larger home improvement projects and renovations because you can draw funds to pay for materials and contractors as needed. You accrue interest only on the outstanding balance, so it could be cheaper to opt for a HELOC vs. a home equity loan. And if you itemize your taxes, you could deduct HELOC interest payments when the money is used to improve the home.

Plus, a renovation project could build wealth by increasing the value of your home. Home improvement experts estimate that a kitchen refresh could deliver a 377% return on investment and refinishing hardwood floors could have a 348% ROI.

2. Debt Consolidation

You can’t deduct HELOC interest when you use the funds to consolidate debt, but you could still build your wealth. Paying off debt with a lower interest rate could save you a lot of money over the long run. Let’s look at an example.

Say you qualify for a HELOC with an 8% APR but you have a $10,000 credit card balance with a 22% APR. In order to pay off that card in five years, you’d pay $276.19 per month and pay $6,571.35 in interest.

With the HELOC, on the other hand, let’s say you made interest-only payments for one year, then spread out the principal and remaining interest over four years, for a total of five years. During the interest-only period, your payment would be $66.67, followed by $244.13 for the remaining four years. On top of that, you’d only pay a total of $2,518.19 in interest for the entire five years. That’s a potential savings of $4,053.16 in interest payments by consolidating to a lower rate!

3. Real Estate Investments

Using a HELOC to finance an investment property can help you start climbing the real estate ladder. Homeowners could use the funds to make a down payment, cover closing costs, and/or make some upgrades before renting out the property.

You’ll still need to qualify for the new property’s monthly mortgage loan payments, particularly if there isn’t a current rental income history for the lender to review. Assuming you’re eligible for the loan, the goal is to use the rental income to pay off the HELOC and make a profit. On top of that, the property itself could increase in value over time, building your overall wealth.

4. Education and Skills Development

Investing your home equity in your education or skills development could increase your earning power and, consequently, your wealth. Research shows that people with advanced degrees tend to earn more than those without them.

For instance, a study published in Demography revealed that women with bachelor’s degrees earn $630,000 more in a lifetime than those with a high school degree. For men, the increase in lifetime earnings is $900,000. The numbers are even more dramatic with graduate degrees. Women’s lifetime earnings are $1.1 million higher than their high school graduate counterparts, whereas men earn $1.5 million more. Clearly, investing in your professional skills can translate into greater wealth.

5. Start or Expand a Business

The majority of small business owners invest their personal funds in the growth of their companies. Research also shows that upfront funding correlates with greater revenue. So while there’s no way to know that home equity financing you use for your business will guarantee success, it could improve your odds to scale more quickly.

6. Investment Portfolio Growth

Growing a diversified investment portfolio is another option for using a HELOC to build wealth. Obviously, there is risk involved when funding investments. Focusing on long-term investments could help reduce the risk of short-term market volatility. Remember, though, that for investments made with money from a HELOC to truly pay off, you would have to earn more on the investment than you pay in interest for the HELOC.

7. Emergency Fund or Cash Reserve

Most financial experts recommend having three to six month’s worth of savings on hand in cash in case you lose a job or the ability to earn an income. However, the economic volatility that came during the pandemic has people rethinking that number and even recommending up to a year of expenses in savings. Using a type of home equity loan like a HELOC could give you the peace of mind of having a financial cushion to fall back on, while allowing you to carefully invest that six months of savings instead of keeping it in cash.

Turn your home equity into cash with a HELOC brokered by SoFi.

Access up to 95% or $500k of your home’s equity to finance almost anything.

What to Consider Before Getting a HELOC

There are several factors to consider before you decide on a HELOC instead of some other type of financing, such as a cash-out refinance or unsecured personal line of credit.

•   Your home is used as collateral: In other words, if you default on your HELOC payments, you could lose your house.

•   You must maintain 10% to 20% equity in your home: You can’t tap into your entire equity amount; lenders require you to keep some, which means you may not be able to borrow as much as you originally thought.

•   Rates are usually variable: Your interest won’t stay the same and could increase if rates rise. That could mean a bigger balance and bigger payments down the road.

•   HELOCs have two stages: The first is the draw period, in which you only have to make interest payments. After the draw period, you’ll make payments on both principal and interest.

Pros and Cons of Taking Equity Out of Your Home

It’s certainly possible to build wealth using a HELOC, but there are advantages and disadvantages to think about.

Pros:

•   Low interest rate compared to other financing

•   Interest accrues only on the balance, not available credit

•   Borrow again when you replenish the credit line

•   No restrictions on how you use the money you borrow

Cons:

•   Home is used as collateral, putting it at risk

•   Payment amount increases after draw period is over

•   May come with closing costs and maintenance fees

The Takeaway

Tapping into your home equity using a HELOC is one way to potentially build wealth, especially because rates tend to be low when compared to other forms of borrowing. It’s always worth weighing the pros and cons, since defaulting on payments could result in losing your house. But if you have the financial confidence to move forward, there are several ways that your home equity could help you build wealth.

SoFi now offers flexible HELOCs. Our HELOC options allow you to access up to 95% of your home’s value, or $500,000, at competitively low rates. And the application process is quick and convenient.

Unlock your home’s value with a home equity line of credit brokered by SoFi.

FAQ

Is it smart to use a HELOC for investment property?

Using a HELOC for an investment property could help you fund the transaction sooner than if you used other types of financing. You may be able to make a bigger down payment or even make an all-cash offer. Just be sure that you feel confident in your real estate market research and your ability to make payments even if a worst-case scenario occurs.

What should you not use a HELOC for?

A HELOC should not be used for depreciating assets, especially when your goal is to build wealth. Things like vacations and car purchases aren’t usually recommended since they don’t hold their financial value.

What are the pitfalls of a HELOC?

The biggest pitfall is that your home is used as collateral to secure a HELOC and can go into foreclosure if you miss payments. On top of that, variable interest rates result in the potential for larger-than-expected payments if rates increase over time.

Photo credit: iStock/nortonrsx

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

²

To obtain a home equity loan, SoFi Bank (NMLS #696891) may assist you obtaining a loan from Spring EQ (NMLS #1464945).

All loan terms, fees, and rates may vary based upon individual financial and personal circumstances and state.

You may discuss with your loan officer whether a SoFi Mortgage or a home equity loan from Spring EQ is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit brokered through SoFi. Terms and conditions will apply. Before you apply for a SoFi Mortgage, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and loan amount. Minimum loan amount is $75,000. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria.

SoFi Mortgages originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org). Equal Housing Lender. SoFi Bank, N.A. is currently NOT able to accept applications for refinance loans in NY.

In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.

SOHL-Q224-1861911-V1

Source: sofi.com

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Airbnb’s CEO Brian Chesky has gone full Willy Wonka.

I was watching him at a live press event, describing the company’s over-the-top new “Icon” experiences. This program includes a full-scale replica of the colorful house from the Pixar film “Up,” which his team lifted over the New Mexico desert with an enormous crane.

Chesky explained that regular houses can’t be lifted like that, so a special team of structural engineers had been hired to make sure the replica wouldn’t break apart on liftoff.

The flying “Up” house won’t make money for Airbnb or its shareholders anytime soon. It can be booked for $0 by fans who write the most compelling notes for why they want to stay there. All eligible entrants will be placed into a drawing, with up to 20% chosen at random as finalists.

From there, Airbnb has partnered with a third-party company to review answers. The “winners” will be notified of their successful booking with — you guessed it — a golden ticket.

I was ready to dismiss Chesky’s Wonka-ish stunts as the fever dream of a billionaire who had grown profoundly tired of dealing with his platform’s real-world problems, including restrictive local regulations, guest horror stories and the proliferation of corporate megahosts.

But then he said something that struck a nerve in my cold, cynical heart.

“As life becomes increasingly digital, what we’re focused on is creating more magic in the real world,” Chesky said. “The best way to experience Icons is not on a screen, it’s not even in a presentation — it’s in real life.”

It’s true. The best thing about Airbnbs is that they are real things in the real world — not images or reels shared by strangers in the digital swamp. At its best, Airbnb offers an antidote to social media: meaningful in-person connections with family and friends.

And that’s why we get so annoyed when it falls short of its potential.

My rom-com relationship with Airbnb

Yet, like the protagonist in a romantic comedy, all my complaining about Chesky’s short-term rental platform veils an obvious truth: I actually love it.

I’m not alone. The short-term rental industry, which Airbnb dominates, nearly doubled its share of the lodging market between 2018 and 2023, according to a 2023 report from AirDNA, a short-term rental analytics company, and STR, a hospitality industry analytics service.

Far from the “Airbnbust” some predicted, vacation rentals are more popular than ever.

As Chesky explained his reasons for meticulously re-creating a computer-generated movie in the real world, it became clear why we’re all so invested in the platform and harbor such strong feelings about it.

We yearn to connect with real people in real houses.

Reflecting on my favorite memories with family and friends over the last decade, so many stories begin with, “Remember that time at the Airbnb when …” Even my not-so-great Airbnb rental experiences — like when my friends and I cowered in the basement all night to avoid a loose bat — become treasured tales of mutual hardship.

Lost in the media hoopla around Chesky’s flying house was a quieter product launch: new tools to help groups find and book properties together, including shared wishlists and trip invitations. It’s clear that Chesky’s heart is in the right place, and he knows what Airbnb can be at its best. But the pressure of earning profits has clouded that vision.

The profit pickle

Less than two decades ago, Chesky and his co-founders created Airbnb as a way to solve two parallel problems:

  • Many people had guest bedrooms and vacation homes that, much of the time, went unused. 

  • Many travelers were looking for affordable lodging options beyond hotels. 

By setting adventurous travelers up with otherwise unused spaces, the platform was creating a win-win situation. Guests got what they wanted and hosts earned some extra money to pay their mortgages.

Then, an unfortunate thing happened: Airbnb became extraordinarily popular.

More than 1.5 billion guests have now checked into Airbnb properties, according to the company — more than 18% of the entire world population. This success has bred a new kind of Airbnb host, one who wasn’t interested in sharing a basement room for a few bucks: institutional investors.

More than 30% of short-term rental listings in the U.S. are now listed by hosts with 21 or more properties, according to May 2023 data provided by AirDNA. That’s compared with 26% of listings from single-property hosts.

From a business standpoint, this all makes sense. There’s money to be made in buying single-family homes and converting them into short-term rentals, so that’s what has (and will continue) to happen. But for those of us who see Airbnb as a way to connect with friends and family, it’s a catastrophe.

“Saturday Night Live” recently skewered the “bland, generic, downright uninviting” interior design of these megahost properties, but it’s about more than uninspired wall art. It’s hard to make meaningful memories in a home that doesn’t feel like a home.

Holding out hope

At some level, I think Chesky wishes he could put the Airbnb genie back in the bottle (though probably not his fortune) and go back to the days when it was making life more enjoyable for backpacking cheapskates.

That won’t happen anytime soon, so he has turned his attention to more interesting projects, like making houses fly.

I still think Airbnb can be better.

By regulating itself (rather than putting the onus on local governments), the platform could limit how many properties a host can run and give preferential treatment to real hosts listing real homes. It could also do more to build and support local communities rather than extract maximum profit from them.

Chesky may have moved on to shinier toys, but I’m still rooting for Airbnb.

(Top photo courtesy of Airbnb)

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024, including those best for:

Source: nerdwallet.com

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With its rich cultural heritage, diverse neighborhoods, and a bustling arts scene, Hartford, CT offers a unique blend of old-world charm and contemporary living. Residents here enjoy easy access to top-notch museums, beautiful parks, and a wide array of dining and entertainment options. Whether you’re drawn to the bustling downtown area or the peaceful suburbs, Hartford has something for everyone.

In this Apartment Guide article, we’ll cut to the chase, breaking down the pros and cons of moving to Hartford. Let’s get started and see what awaits in this historic and vibrant city.

Pro: Affordable cost of living

Compared to other major cities in the Northeast, Hartford offers a relatively affordable cost of living. Housing costs, in particular, are more reasonable, allowing residents to enjoy the benefits of city living without breaking the bank. As of spring 2024, the average rent for a 2 bedroom apartment is roughly $1,600/mo. This makes Hartford an attractive option for those seeking an urban lifestyle without the exorbitant expenses.

Con: Limited public transportation options

While Hartford does have public transportation, the options are relatively limited compared to larger cities. CT Transit provides bus service through the city but it is not extensive. This can pose challenges for residents who rely on public transit for their daily commutes or prefer not to drive, leading to potential transportation issues and longer commute times.

Pro: Rich cultural heritage

Hartford is steeped in rich cultural heritage, offering residents a deep sense of history and tradition. The city is home to renowned museums such as the Wadsworth Atheneum Museum of Art, the Mark Twain House & Museum, and the Connecticut Science Center, providing ample opportunities for cultural enrichment and exploration. Additionally, the city’s diverse population contributes to a vibrant tapestry of art, music, and culinary experiences, making Hartford a melting pot of cultural diversity.

Con: Harsh winters

Hartford experiences harsh winters, with cold temperatures and significant snowfall. The winter weather can be challenging for residents, leading to difficulties in commuting, outdoor activities, and overall comfort during the colder months. Those considering a move to Hartford should ensure they have the appropriate gear for their person and vehicle during the winter months.

Pro: Proximity to nature

Despite being a city, Hartford offers easy access to nature, with beautiful parks and outdoor recreational areas such as Bushnell Park, Elizabeth Park Conservancy, and the Farmington River. Residents can enjoy outdoor activities like hiking, biking, and picnicking, providing a welcome escape from the urban hustle and bustle.

Con: Traffic congestion

Hartford experiences traffic congestion, especially during peak commuting hours. The city’s roadways can become congested, leading to longer commute times and potential frustration for residents navigating the urban landscape.

Pro: Thriving arts and music scene

Hartford has a thriving arts and music scene, with numerous galleries, theaters, and music venues scattered throughout the city. From the Hartford Stage and TheaterWorks to the Infinity Music Hall and the Charter Oak Cultural Center, residents can immerse themselves in a diverse array of artistic and musical performances, contributing to a culturally rich and vibrant community.

Con: Limited nightlife options

While Hartford has a thriving arts and music scene, the city’s nightlife options may be more limited compared to larger metropolitan areas. Residents seeking a bustling nightlife with a wide array of entertainment venues may find the options in Hartford to be relatively more subdued.

Pro: Access to higher education

Hartford boasts a strong presence of prestigious higher education institutions, including Trinity College, the University of Hartford, and Capital Community College. This provides residents with access to top-notch educational opportunities, cultural events, and intellectual stimulation. The presence of these institutions also contributes to a dynamic and intellectually stimulating atmosphere within the city.

Con: High property taxes

Hartford has relatively high property taxes compared to other cities in Connecticut. This can be a financial burden for homeowners and impact the overall affordability of living in the city.

Pro:  Diverse culinary experiences

Hartford’s culinary scene is a melting pot of flavors, with a wide range of restaurants offering diverse cuisines from around the world. From authentic Italian eateries in Little Italy to vibrant Latin American flavors in Parkville, residents can embark on a culinary journey without leaving the city limits, satisfying a variety of palates and preferences.

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The Producer Price Index (PPI) isn’t in the same league as CPI when it comes to market movement potential, but as seen again this morning, it’s no slouch.  Bonds responded immediately and somewhat forcefully to the much higher monthly core number.  10yr yields jumped an instant 5bps and MBS dropped 6 ticks (.19).  But less than 15 minutes later and we’re back near unchanged levels.  This wild ride can be chalked up to the previous month’s revisions offsetting the big miss as well as some of the distribution among the internal components.  Specifically, several of the components that contribute to PCE (the Fed’s favorite inflation index) were weaker.

Source: mortgagenewsdaily.com

There’s no relief in sight for high borrowing costs as interest rate cuts are pushed further into the distance. Still, a surge in housing inventory could give buyers more options, Fannie Mae said in a report.

Mortgage rates have ticked above 7% in recent weeks and that, combined with high home prices, has rendered housing unaffordable for many. Fannie Mae is still forecasting for mortgage rates to decrease later this year to 6.6%, but borrowing costs will only drop meaningfully once the Fed dials back interest rates. That won’t come until the central bank is confident that inflation will reach a 2% target rate. 

The inflation data registered this year has been higher than the Fed expected. The latest reading of the personal consumption expenditures (PCE) price index, excluding food and energy prices—a key metric the Federal Reserve tracks to measure inflation—increased by 3.7% after rising to 2% in the fourth quarter, raising concerns that inflation may be headed in the wrong direction. Fannie Mae has readjusted its expectations on inflation and now expects the Consumer Price Index to end 2024 at a 3.1% annual rate, compared to the previously projected 2.5%.   

“While we still expect economic growth and inflation to moderate going forward – and, thus, for mortgage rates to drift downward – interest rates existing in a ‘higher for longer’ state seems to be an increasingly real possibility in the eyes of market participants, as well as some homebuyers and sellers,” Fannie Mae Vice President, Economic and Strategic Research Hamilton Fout said. “While we’ve recently seen evidence that some potential home sellers are becoming more acclimated to the higher mortgage rate environment and putting their homes on the market, the recent move upward in rates is yet another headwind to the recovery of home sales, and it intensifies long-standing affordability challenges for consumers.”

The silver lining for the housing market is that supply is expected to build as home sales lag, which “should help gradually thaw housing inventory and contribute to decelerating home price growth,” Fannie Mae said. 

Homebuyers can find the best mortgage rate by shopping around and comparing your options. You can visit an online marketplace like Credible to compare rates, choose your loan term and get preapproved with multiple lenders at once.

SOCIAL SECURITY: COLA INCREASING BUT MEDICARE COSTS RISING TOO IN 2024

Home prices forecasted to keep rising

Fannie Mae has readjusted its home price projection and forecasts upwards, but there are signs that gains are slowing. Home prices are forecasted to increase 4.8% annually in 2024 and 1.5% in 2025.

Home prices are now 6.4% above their level this time last year, up from the 6% increase registered in January, according to the latest S&P CoreLogic Case-Shiller national home price index report.  Across the nation, home prices increased 0.6% month-over-month after dipping the previous month. This annual and monthly growth in home prices comes as homebuyers struggle with affordability issues caused by high mortgage rates and a lack of housing supply.  

“Home price growth pivoted in February, as the impact of the January 2023 Home Price Index bottom finally faded,” CoreLogic Chief Economist Selma Hepp said in a statement. “As a result, the U.S. should begin to see slowing annual home price gains moving forward.”  

If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score.

MILLENNIALS ARE DESPERATE TO BUY A HOME, MOST WILLING TO PAY A MORTGAGE RATE ABOVE 7%: SURVEY

Here’s how much homebuyers need to earn 

Homebuyers need to earn more today to afford a home. Based on the current interest rate of 7.22% over a 30-year mortgage, buyers today would need to earn an annual income of roughly $120,000, plus a 10% down payment, to afford a home, according to the Clever Real Estate report. However, the average American household earns about $45,000 less than that, and most first-time buyers can’t afford a 10% down payment.

Based on the median annual salary and a 10% down payment, most first-time buyers can afford a home priced at about $207,529 — 38% less than the current median-priced home. Increasing the down payment to 20% lowers the salary threshold to $98,202, but saving that amount could take years, the Clever report said. 

Moreover, higher mortgage rates and home prices mean that 20% of Americans spend roughly 30% of their paychecks on monthly home loan payments, and 10% spend more than half of their pay, according to a recent NewHomesMates.com survey. Homeownership is considered affordable if households spend at most 28% of their monthly income on housing costs. The survey said those ready to take the plunge have had to sink a larger portion of their paychecks into mortgage payments and make significant cuts to everyday spending.  

If you’re considering becoming a homeowner, it could help to shop around to find the best mortgage rate. Visit Credible to compare options from different lenders and choose the one with the best rate for you.

THIS IS THE #1 CITY FOR FIRST-TIME HOMEBUYERS, AND OTHER HOT US HOUSING MARKETS

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Source: foxbusiness.com

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Welcome to the charming city of Binghamton, NY. With its rich industrial heritage, vibrant arts scene, and stunning natural landscapes, Binghamton offers a unique blend of urban amenities and small-town charm. So whether you’re searching for the perfect apartment in downtown Binghamton or eyeing a cozy farmhouse in the surrounding area, you’ve come to the right place.

In this Apartment Guide article, we’ll cut to the chase, breaking down the pros and cons of moving to Binghamton. Let’s get started and see what awaits in this picturesque city nestled in the heart of upstate New York.

Pro: Affordable cost of living

Binghamton offers a relatively affordable cost of living compared to other cities in New York state. The average rent in spring 2024 is only around $1,000 for an apartment. Housing costs, including home buying prices, are reasonable, allowing residents to enjoy a comfortable lifestyle without breaking the bank. This makes Binghamton an attractive option for anyone looking to stretch their budget while still enjoying the amenities of a city.

Con: Limited public transportation options

Binghamton has limited public transit coverage compared to larger cities. There is bus service within the city but it is not extensive. Busses are also available to travel between Binghamton and other cities in the area such as Albany, Buffalo, and New York City. However, the lack of robust public transport within Binghamton itself can pose challenges for residents who rely on public transportation for their daily commutes.

Pro: Rich cultural heritage

Binghamton boasts a rich cultural heritage, with a strong emphasis on the arts and history. The city is home to several museums, art galleries, and cultural institutions that showcase the region’s diverse heritage. The Bundy Museum, Phelps Mansion and Roberson Museum and Science Center are especially beloved. Residents can immerse themselves in local art, music, and theater, as well as explore the city’s historical landmarks and architecture, providing a deep sense of cultural appreciation and community pride.

Con: Harsh winters

Binghamton experiences harsh winters with heavy snowfall and cold temperatures, which can be challenging for residents who are not accustomed to extreme weather conditions. Snow removal and road maintenance become significant concerns during the winter months, impacting daily routines and travel logistics.

Pro: Outdoor recreational opportunities

Surrounded by natural beauty, Binghamton offers abundant outdoor recreational opportunities. The Ganondagan Hiking Trails are a highlight. They allow hikers to learn about the history of the area on three different themed hiking trails. Residents also enjoy trekking, biking, and picnicking in the nearby state parks and nature reserves. Confluence Park, at the intersection of the Susquehanna and Chanango Rivers, is a well-loved location for a stroll on nice days. The city’s proximity to the Finger Lakes region also provides access to water-based activities such as boating, fishing, and swimming, making it an ideal location for nature enthusiasts and outdoor adventurers.

Con: Healthcare access

Access to specialized healthcare services and medical facilities may be limited in Binghamton, requiring residents to travel to neighboring cities for certain medical treatments and healthcare needs. This can create logistical challenges and impact the overall accessibility of healthcare resources within the local community.

Pro: Diverse dining scene

Binghamton’s diverse dining scene offers a wide range of culinary experiences, from cozy cafes and family-owned eateries to upscale restaurants and international cuisine. Food enthusiasts can savor a variety of flavors and dishes, including farm-to-table fare, ethnic delicacies, and innovative gastronomic creations, making the city a haven for foodies and those who appreciate culinary diversity. Residents love The Grove for casual eats and live music. For special occasions, Remlik’s serves gorgeous meals in a historic home.

Con: Limited job opportunities

While Binghamton offers a lower cost of living, the city also has limited job opportunities compared to larger metropolitan areas. Employment options may be more restricted, especially in certain industries, requiring residents to carefully consider their career prospects and potential for professional growth within the local job market. Major employers in the area include Lockheed Martin and Binghamton University.

Pro: Strong sense of community

Binghamton fosters a strong sense of community, with residents actively engaging in local events, volunteer opportunities, and neighborhood initiatives. The city’s close-knit neighborhoods and friendly atmosphere create a supportive and inclusive environment, where individuals can form meaningful connections and contribute to the overall well-being of the community.

Con: Seasonal fluctuations

Binghamton experiences distinct seasonal fluctuations, with hot and humid summers followed by cold and snowy winters. These weather extremes can pose challenges for residents, impacting outdoor activities, energy costs, and overall comfort levels throughout the year.

Pro:  Access to higher education

Binghamton provides residents with access to quality higher education institutions. Binghamton University and SUNY Broome Community College are both located in the city. Students and lifelong learners can take advantage of academic and cultural resources, as well as attend lectures, performances, and events that enrich the intellectual and social fabric of the city.

Con: Urban sprawl and traffic congestion

Binghamton experiences urban sprawl and traffic congestion in certain areas, particularly during peak commuting hours. The city’s infrastructure and roadways may become congested, leading to longer travel times and potential frustrations for residents navigating through busy urban corridors.

Pro: Convenient transportation options

Binghamton offers convenient transportation options within the city such as bike lanes, and pedestrian-friendly pathways. The city’s accessibility allows residents to navigate the urban landscape and connect with neighboring communities, enhancing overall mobility and connectivity.

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Current consumer sentiment indexes:

  • The University of Michigan’s Index of Consumer Sentiment registered at 77.2 in April, down from 79.4 in March. The university’s index of Current Economic Conditions also fell in April, to 79.0, from 82.5 in March. 

  • The Conference Board’s Consumer Confidence Index fell for the third consecutive month in April, hitting 97.0 after reaching 103.1 in March. 

What is consumer sentiment?

Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds in to the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.

How people feel about the economy can directly impact the economy, because consumers’ attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more. In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.

When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though. Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey. Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.

The University of Michigan’s Index of Consumer Sentiment

The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia.

The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions.

The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions:

  1. “We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?”

  2. “Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?”

  3. “Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we’ll have good times financially, or bad times, or what?”

  4. “Looking ahead, which would you say is more likely: that in the country as a whole we’ll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?”

  5. “About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?”

Historically, the surveys have been conducted by phone. Starting in July 2024, they’ll be conducted online, with researchers aiming for 900 to 1,000 respondents.

The Conference Board’s Consumer Confidence Index

Meanwhile, the Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents.

The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100.

The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index.

Present Situation Index

  1. Respondents’ appraisal of current business conditions.

  2. Respondents’ appraisal of current employment conditions.

Expectations Index

  1. Respondents’ expectations regarding business conditions six months hence.

  2. Respondents’ expectations regarding employment conditions six months hence.

  3. Respondents’ expectations regarding their total family income six months hence. 

Consumer Confidence Index

This is the average index for all five questions above.

What is consumer sentiment like right now?

The University of Michigan’s Index of Consumer Sentiment, released on April 5, dipped only slightly from its March reading, making for the third month in a row of relatively stable results. It registered at 77.2, which is a 2.8% decrease from the previous month.

The index measuring Current Economic Conditions was at 79.0 in April, compared to 82.5 in March. And the Index of Consumer Expectations was at 76.0 — a 1.8% decrease from March, when it was at 77.4.

Meanwhile, the Conference Board’s Consumer Confidence Index declined for the third month in a row. The index fell to 97.0 in April, compared to 103.1 in March. Its Present Situation Index fell to 142.9 in April, compared to 146.8 in March. And the Expectations Index registered at 66.4, compared to 74.0 in the previous month.

When does the next report come out?

The University of Michigan’s next Surveys of Consumers will be released on Friday, May 10. The Conference Board will release its next Consumer Confidence Survey on Tuesday, May 28.

Source: nerdwallet.com

Apache is functioning normally

SEATTLE — Mortgage rates, now hitting 7%, are putting heavy pressure on potential homebuyers.

According to Bankrate Analyst Alex Gailey, it may be time to rent rather than buy. 

“A housing shortage, rising home prices, and high mortgage rates are tipping the housing market in favor of renting, at least in the short term, all across the country,” said Gailey.

A new Bankrate study reveals the Seattle metro area ranks third in the nation as the least affordable area to buy versus rent. Only Silicon Valley and the Bay Area are more expensive.

“You see home prices really high in Seattle, well above the national median sale price. In Seattle, the median sale price of a home is roughly around $800,000. That compares to the national median sale price, which is closer to $400,000. And so, that really makes a huge difference in the monthly mortgage payment you’re making,” said Gailey.

The Seattle-Tacoma-Bellevue area has the third-largest gap between renting and buying costs, with the average rent in the area at nearly $2,200 a month, while the typical mortgage payment is over $4,900. That’s a buy-to-rent ratio of 125%.

Gailey’s advice: If you want to buy right now you should make sure you’re in it for the long haul. 

“Time in the housing market is more important than trying to time the housing market,” said Gailey.

While affordability is one of the main obstacles for aspiring homeowners, if you can afford it, then buying is a smart financial choice in the long term.

In Washington state, on average, you need a combined income of $150,000 annually to afford to buy, and more than half of aspiring homeowners say they can’t get there.

Rental rates in the area are high as well but more comparable to the national average. The average rental unit prices at $2,200, compared to a national average of about $1,950.

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Source: kiro7.com