Over the years, consumer perception of electric vehicles has been all over the map, with some early adopters embracing them and others feeling apprehensive about issues like battery range, price, and the environmental impact of EV production.
Within the next decade, however, the choice to buy an EV or other “zero-emission” model might produce no hesitation at all: It might be the only new car you can buy where you live.
At least a dozen states have made moves to restrict the sale of vehicles driven purely by internal combustion engines, with nine working toward an all-out ban by 2035. The states are following California’s Advanced Clean Cars II (ACCII) rule, which requires automakers and car dealers to sell increasingly more zero-emissions vehicles each year between 2026 and 2035. For example, in 2026, 35% of new vehicles on car lots within an ACCII state must be emission-free. That percentage will gradually increase year after year to 100% by 2035 — an effective ban on purely gas-powered vehicles.
In addition to EVs, California’s definition of zero-emission vehicles includes battery-electric, hydrogen fuel cell electric and plug-in hybrid electric vehicles.
So far, eight states and Washington, D.C., have adopted ACCII for light passenger vehicles. The states are Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington, and, most recently, Virginia. Connecticut and Maine are also considering the measures but haven’t adopted them formally, while Colorado, New Mexico, Delaware and Minnesota have partially adopted a large portion of the standards.
What the ban means for owners of gas cars
To be clear, the ACCII regulations will only prohibit the sale of newinternal-combustion passenger vehicles (cars, SUVs and light-duty trucks) starting in 2035. They wouldn’t, however, require drivers of gas cars to forfeit ownership of previous models.
Residents of these states could still buy used gas-powered vehicles within the state’s borders. Likewise, nothing in the regulation would prohibit drivers from buying a new gas car from a state without the ban, then registering it within a state that has one. Although amendments can be made at any time, currently only the sale of gas-powered cars by 2035 would be prohibited in a state whose standards are identical to ACCII.
Of course, regardless of the ban, drivers who want a new internal-combustion vehicle in 2035 may have fewer choices. Already Stellantis — the company behind Chrysler, Dodge, Fiat, and Jeep — has warned dealers it will ship fewer gas cars to states that follow California’s emissions standards, while also pledging to have electric vehicles make up half of its North American sales by 2030.
Meanwhile, other automakers have announced plans to cease production of fully gas-powered cars at around the same time that the ACCII would phase them out. For example, General Motors plans to stop making gas cars by 2035, with an earlier date of 2030 for a fully electric lineup of Cadillac and Buick. Ford has said it plans for EVs to make up half of car sales by 2030. Other car companies that have pledged to sell electric only include Volvo (2030), Mercedes-Benz (2030), Honda (2040) and Volkswagen (2040).
While some of these goals are objectively ambitious (and often contingent on market conditions), they’re in lockstep with gas car bans planned by nations with large economies, including those in the European Union (2035), Japan (mid-2030s) and South Korea (2035), among others.
Will other states ban gas cars in the future?
As it stands, most states don’t have plans to discontinue the sale of gas-powered vehicles in the near future. But it’s possible that other states will join those that do, especially if they tend to follow California’s stricter vehicle emission standards.
Because of the Clean Air Act, no state except California can create its own fuel economy standards, but states can choose to adopt California’s guidelines under a provision called Section 177. Presently, 17 states have emission standards tied to California’s: Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.
So far, only eight of these states have formally adopted a standard that’s identical to California’s Advanced Clean Cars II regulations. Colorado, New Mexico and Delaware have partially adopted the standard, but instead of a 2035 ban on gas-powered vehicles, these three states will require 82% of new car sales to be emission-free by 2032. Minnesota enacted its “Clean Cars Minnesota” rule this year, which requires automakers to cut down on emissions and produce more zero-emission cars. However, it doesn’t have plans to ban gas cars.
Likewise, neither Pennsylvania nor Nevada have announced plans to follow California’s standards. Maine and Connecticut were expected to adopt ACCII regulations, though both states have so far voted against them.
If states don’t follow California’s standards, they’ll have to comply with federal regulations, which currently don’t have a plan to ban gas vehicles. But federal policy is shifting. In March 2024, the Environmental Protection Agency finalized measures that require automakers to gradually reduce the emissions associated with the vehicles they sell. The rule applies to model years 2027 through 2032.
While the new rules don’t require a specific percentage of sales to be zero-emission vehicles, the Biden administration estimates the new emission standards could be met if EVs make up 56% of new car sales by 2032 (with another 13% of sales composed of plug-in hybrids or other partially electric cars).
It’s not a ban per se on entirely gas-powered vehicles. But, when coupled with state bans, plus automakers’ pledges to produce less of them, it could mean fewer engines that go “potato potato potato”and more that hum quietly off dealership lots.
Investors evaluating precious metals often ask: gold vs silver, which is better for investors? In this comparison, discover the investment merits of gold’s stability and silver’s industrial relevance, geared towards helping you decide which metal suits your financial strategy. Without leaning towards one or the other, this article presents a balanced view to inform your choice.
Key Takeaways
Gold and silver serve as a store of value and a hedge against inflation, with gold mainly being an investment asset while silver has significant industrial applications, impacting their price volatility and investment suitability.
Gold is revered as a safe haven asset, attracting investment during economic turmoil and serving as an inflation hedge, while silver’s dual role in industry and investment sectors offers growth potential and affordability.
Investors should consider precious metals within a diversified portfolio and can choose between physical metals, ETFs, or mining stocks, each with its own benefits and risks, and should evaluate after-inflation returns and personal financial goals to decide between gold and silver.
Gold and silver, the titans of precious metals, have long served as a reliable store of value and an effective inflation hedge. While gold primarily functions as an investment asset, offering potential for significant returns to those with larger capital, silver boasts an additional industrial role, broadening its appeal. However, investing in these precious metals isn’t as simple as stashing bars or coins in a safe. It involves dealing with price volatility and aligning your investment with long-term goals.
Adopting a buy-and-hold approach may serve investors best over the long term when investing in gold and silver. But why? It’s because the prices of these metals are shaped by a vast array of factors. Geopolitical issues, economic turmoil, and demands in the industrial sector all play a part in the daily dance of gold and silver prices. Understanding these factors can help you make informed decisions about when and how much to invest.
So why consider precious metals as part of your investment portfolio? They offer a unique combination of benefits:
Gold, with its reputation as a safe haven, attracts those looking for stability amidst market chaos
Silver, with its dual role in the industrial and investment sectors, offers an affordable entry point for investors with smaller capital
Both metals provide a robust way to diversify your portfolio and protect against inflation.
Understanding Gold’s Position as a Safe Haven Asset
Gold has long been a symbol of stability and security in the financial world. Its glittering history spans centuries, maintaining its value even in times of economic turmoil. It’s no wonder that in periods of global uncertainty or financial crises, investors often flock to gold, buoying its value and cementing its reputation as a safe haven.
One of gold’s most notable features is its role as an inflation hedge. As the cost of living increases, inflation hedge gold has shown a remarkable ability to preserve the real value of assets. This unique characteristic comes from how gold’s supply growth aligns with long-term global economic growth, helping to maintain its value during inflationary periods. This resilience, coupled with the tendency of investors to shift towards gold as a safe haven during inflation, can drive up its demand and price.
Given these factors, it’s clear why gold holds a revered place in the financial market. Whether you’re looking for a buffer against economic instability or an asset that can protect your buying power in the face of rising prices, gold stands firm as a reliable safe haven asset.
Silver’s Dual Role: Industrial Demand and Investment Segment
While gold may steal the spotlight for its luster and stability, silver plays a shining role of its own. Apart from being an investment asset, silver’s widespread industrial applications can drive up its price and enhance its investment appeal. In 2023, industrial applications reached a new record high, with photovoltaics usage increasing by a staggering 64%. China’s industrial demand for silver surged by 44% in the same year, predominantly driven by growth in green applications such as:
photovoltaics
solar panels
batteries
electronics
medical devices
These industrial applications highlight the versatility and value of both silver and silver bullion coins as an investment.
Due to its significant industrial use and affordable price point, silver is an accessible option for investors with smaller amounts of capital. However, the silver lining has a cloud. During economic downturns, silver’s industrial use can result in a drop in demand and a corresponding price drop. This volatility underscores the need for investors to consider their risk tolerance when investing in silver.
Despite its volatility, the forecast for silver demand in 2024 predicts a growth of 2%, with industrial production expected to achieve new records. This projected growth, along with silver’s role in portfolio diversification and potential for future price appreciation, suggests that silver’s investment appeal may shine brighter in the future.
Including gold and silver in a diversified portfolio can enhance performance during market volatility and inflation. Financial advisors often suggest allocating 5-10% of an investment portfolio to commodities like gold and silver for diversification purposes. The logic is simple: gold offers diversification due to its historically low correlation with other financial assets such as stocks and bonds.
The inclusion of gold and silver, primarily an investment asset class, which unlike an asset produces cash flow, can act as an uncorrelated asset relative to equities, serving to diminish the total volatility of the portfolio.
Some benefits of including silver in your portfolio are:
Silver has significant industrial applications
It is positively correlated with periods of economic growth
Anticipated growth in areas such as renewable energy and artificial intelligence suggests an expanding demand for silver.
However, it’s crucial for investors to consider the following factors when determining the fit of precious metals within their investment strategies:
Potential costs for secure storage of precious metals
The speculative nature of precious metals
Due diligence and careful consideration of your financial circumstances
As with any investment decision, due diligence and careful consideration of your financial circumstances are key, including addressing portfolio risk management requirements.
While investing in physical precious metals has its appeal, precious metal mining stocks offer an intriguing alternative. Gold stocks provide a leveraged play that can outperform physical gold when prices rise, offering substantial potential for capital gains. The reason? Mining stocks do not just reflect the value of the precious metal. They also include the prospects of mining companies themselves.
Compared to physical gold, gold stocks offer several advantages:
They are more liquid and can be easily bought and sold.
They can provide additional income through dividends paid by established, profitable mining companies.
Investors can benefit from the expansion of mining operations and reap profits from significant new gold discoveries.
These advantages make gold stocks an enticing option for those looking to diversify their portfolio.
Moreover, by choosing gold mining stocks, investors can avoid the extra costs associated with the storage and security of physical gold. This can make gold stocks a more convenient and cost-effective alternative for investors who want exposure to gold without the logistical challenges of owning physical metal.
Physical Bullion vs. ETFs: Choosing Your Investment Vehicle
When considering precious metals as part of your investment strategy, it’s essential to explore all available options. Physical bullion and exchange-traded funds (ETFs) present two distinct investment vehicles, each with its own set of advantages and challenges. Gold ETFs, for instance, offer enhanced liquidity compared to physical gold, allowing investors to quickly buy and sell shares without facing the logistical challenges tied to physical transactions of gold.
Investing in gold ETFs can also be more cost-effective over time. Investors do not have to deal with the costs of purchasing and maintaining physical gold, and the responsibilities of securing and insuring the physical gold are professionally managed by the fund. However, it’s crucial to remember that the value of shares in gold ETFs may not track the price of gold precisely, as the fund’s expenses could slightly erode the value of these shares over time.
On the other hand, investing in physical gold comes with its own set of considerations. Apart from the allure of owning a tangible asset, investors must account for costs such as storage fees, insurance, and potentially higher dealer premiums over the market price. Additionally, purchasing physical gold requires vigilance due to the risks of scams, necessitating transactions with reputable dealers and possible appraisal costs, which add to the overall investment expense.
Evaluating After-Inflation Returns: Gold vs. Silver
When it comes to returns, it’s crucial to look beyond the nominal figures and consider the real value – the after-inflation returns. And in this regard, the performance of gold and silver may not be as glittering as one might expect. However, these precious metals have historically provided a hedge against inflation, offering returns that outpace inflation over certain periods. Here are some key points to consider:
Gold and silver can serve as a portfolio diversifier, helping to reduce risk.
Silver, due to its abundance, may have less upside potential compared to gold.
Both gold and silver have historically provided a hedge against inflation.
While the after-inflation returns of gold and silver may not always be stellar, considering past investment product performance, they can still play a valuable role in a well-diversified investment portfolio, remaining steady amid inflation uncertainties.
Gold tends to perform well during economic downturns and protections against inflation; studies confirm a positive correlation between the rising cost of living and the value of both precious metals. This ability to preserve wealth becomes particularly valuable during periods of high inflation, increasing their attractiveness as part of an investment strategy.
While the after-inflation returns for gold and silver may not be highly impressive when compared to other investments, rising inflation typically enhances their attractiveness as part of an investment strategy. This context underscores the importance of considering multiple factors – including inflation, market conditions, and personal financial goals – when evaluating the potential returns on your investment in gold and silver.
Making the Decision: Should You Buy Gold or Silver?
So, armed with all this knowledge, how do you decide between gold and silver? The answer isn’t one-size-fits-all. Investors should assess their individual financial circumstances and objectives when considering gold or silver investments, as the suitability can greatly vary depending on personal financial situations and goals.
The choice between gold or silver as a better investment option hinges largely on the individual’s risk tolerance and comfort with each investment strategy. It’s crucial to remember that while both precious metals can serve as hedges against inflation and economic downturns, they also present unique risks and opportunities. For instance, gold’s role as a safe haven asset may appeal to those seeking stability, while silver’s industrial applications and lower price point could attract investors looking for growth and affordability.
Before making the final call, it’s advisable to seek the guidance of a financial advisor to evaluate the appropriateness of gold or silver investments for your portfolio. Additionally, conducting independent research into gold and silver investment strategies can help you make a well-informed decision. Armed with knowledge and guided by your financial goals, you are well-equipped to make the golden (or silver) choice that’s right for you.
Summary
When it comes to precious metals, gold and silver stand as powerful contenders. Their unique characteristics offer distinct advantages for investors, making them an appealing inclusion in a diversified portfolio. Gold, with its safe-haven status, serves as a buffer against economic instability, while silver, with its industrial applications and affordable price, presents growth opportunities and accessibility to investors.
Ultimately, the decision to invest in gold, silver, precious metal mining stocks, or any other asset class should be guided by a thorough understanding of your financial goals, risk tolerance, and market conditions. It’s not about choosing the shiniest option, but the one that aligns best with your investment strategy and financial aspirations. So, whether you’re drawn to the allure of gold or the versatility of silver, remember – knowledge is the most precious asset of all.
Frequently Asked Questions
What factors influence the price of gold and silver?
The prices of gold and silver are influenced by various factors, including global economic stability, inflation rates, currency values, interest rates, and mining supply. Geopolitical events and investor sentiment can also cause significant price fluctuations.
Can I invest in gold and silver without owning physical metals?
Yes, investors can gain exposure to gold and silver without owning physical metals by investing in exchange-traded funds (ETFs), mining stocks, or mutual funds that focus on precious metals.
How does the industrial demand for silver affect its investment value?
The industrial demand for silver, particularly in technology and renewable energy sectors, can significantly affect its investment value. As demand for industrial applications rises, the price of silver may increase, potentially offering capital gains to investors.
What risks are associated with investing in precious metals?
Investing in precious metals carries risks such as market volatility, liquidity issues, and potential losses if prices decline. Additionally, physical metal investments may incur costs for storage and insurance.
Are there any tax considerations when investing in gold and silver?
Yes, there are tax considerations when investing in gold and silver. Capital gains on precious metals may be subject to taxation, and the tax treatment may differ depending on the investment vehicle (e.g., physical metals, ETFs, stocks). A tax professional can help you with this.
How do geopolitical events impact gold and silver prices?
Geopolitical events can have a significant impact on gold and silver prices. Uncertainty and instability often lead investors to seek safe-haven assets like gold, which can drive up prices. Conversely, positive geopolitical developments can reduce demand for safe havens, potentially lowering prices.
What is the best way to track the prices of gold and silver?
Investors can track the prices of gold and silver through financial news websites, commodity exchanges, and market data services. Many investment platforms also provide real-time pricing information for precious metals.
How do central bank policies affect gold and silver investments?
Central bank policies, such as interest rate adjustments and quantitative easing, can affect the value of currencies and influence investor sentiment towards precious metals. Policies that lead to currency devaluation can increase the attractiveness of gold and silver as a store of value.
Colorado Springs is renowned for its natural beauty, laid back lifestyle, and friendly community. Living in Colorado Springs means experiencing the beauty of all four seasons, from snowy winters perfect for skiing and snowboarding, to warm summers ideal for camping and fishing. So, if you’ve been asking yourself, “Should I move to Colorado Springs, CO?” you’re in the right place. In this article, we’ll dive into the pros and cons of making Colorado Springs your home to help you decide if it’s the right fit for you. Let’s get started.
Colorado Springs at a Glance
Walk Score: 36 | Bike Score: 45| Transit Score: 19
Median Sale Price: $440,000 | Average Rent for 1-Bedroom Apartment: $1,520
Colorado Springs neighborhoods | Houses for rent in Colorado Springs | apartments for rent in Colorado Springs | Homes for sale in Colorado Springs
Pro: Thriving arts and cultural scene
Colorado Springs is home to a vibrant arts and cultural scene. The city has numerous galleries, theaters, and museums that celebrate both local and international talent. The Colorado Springs Fine Arts Center and the Pikes Peak Center for the Performing Arts are just two examples of venues that offer a diverse array of performances and exhibitions.
Con: Variable weather conditions
The weather in Colorado Springs can be unpredictable, with sudden changes that can catch residents off guard. While the city enjoys over 300 days of sunshine a year, it also experiences its share of snow, hail, and rapid temperature fluctuations. This variability can make planning outdoor activities challenging and requires residents to be prepared for anything. The winter months, in particular, can see heavy snowfall, impacting travel and daily life.
Pro: Stunning natural beauty
Colorado Springs is located at the foot of the majestic Pikes Peak, offering breathtaking views that are hard to find elsewhere. The city is surrounded by natural wonders, including the Garden of the Gods with its iconic red rock formations. Residents enjoy easy access to hiking, biking, and outdoor adventures right in their backyard. This connection to nature enhances the quality of life for those who live here, making it a coveted location for nature lovers.
Con: High altitude
Located at an elevation of over 6,000 feet, Colorado Springs’ high altitude can be a challenge for new residents and visitors. The thin air can sometimes lead to altitude sickness, affecting one’s energy levels and overall health. It often takes time to acclimate to the elevation, which can be particularly tough for those moving from lower altitudes. This aspect can impact athletic performance and daily activities until one’s body adjusts.
Pro: Growing economy
Colorado Springs has a growing economy, with a focus on the aerospace and defense industries, technology, and tourism. This economic growth has led to an increase in job opportunities, attracting individuals from various career fields. The city’s economic development is supported by a proactive local government and a community that values innovation and entrepreneurship.
Con: Rising cost of living
The cost of living in Colorado Springs is on the rise since becoming more popular. In fact, the cost of living in Colorado Springs is 8% higher than the national average. Real estate prices have increased, making it more challenging for some first-time homebuyers and renters. While still more affordable than some major cities, the trend towards higher living costs could pose a problem for those on a tight budget or looking to move to the area.
Pro: Pet-friendly city
Colorado Springs is an incredibly pet-friendly city, with numerous parks, trails, and open spaces where pets are welcome. Many restaurants and businesses also cater to pet owners, allowing dogs in outdoor areas. This pet-friendly attitude is evident in the city’s numerous dog parks and pet events, including the Colorado Springs Pet Expo. The city’s devotion to pets makes it a great place for anyone who loves animals to call home.
Con: Limited nightlife
Compared to larger cities, Colorado Springs has a more subdued nightlife. While there are certainly bars, restaurants, and events to enjoy, those seeking a vibrant club scene might find the options limited. This quieter nightlife aligns with the city’s overall laid-back atmosphere but may be a drawback for those who prefer a bustling night out on the town.
The sense of community in Colorado Springs is strong, with friendly neighborhoods and an array of community events throughout the year. From local farmers’ markets to festivals celebrating the city’s culture and history, there’s a genuine camaraderie among locals. This community spirit makes it easy for newcomers to feel welcome and quickly become part of the city’s social fabric.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
Interest rates care about quite a few different things, but inflation and Fed policy are two of the biggest considerations. One of the Fed’s favorite ways to track progress on inflation is the PCE price index which comes out every month, but also every quarter.
Oddly enough, the quarterly comes out a day before the monthly data on the 4 days of the year where a new quarter is reported. Today was one of those days and the quarterly data showed a big surge in inflation. The implication is that there’s a much bigger risk that tomorrow’s monthly inflation number also proves to be higher than expected.
Bonds/rates don’t like inflation to begin with, but it’s even more problematic when it has a direct bearing on Fed policy decisions. This particular news is seen as pushing the Fed even farther into the future for its first rate cut of this cycle. In other words, both the data, and the Fed implications were bad news for rates today.
The average lender jumped immediately higher by roughly an eighth of a point. This brings the top tier conventional 30yr rate index over 7.5% for the first time since November 13th. Tomorrow could add insult to injury, but it’s also worth noting that markets are expecting worse news now, so if it’s only a little worse, the injury might not be that bad.
Sales of newly built single-family homes in the United States soared in March despite mortgage rates remaining elevated that month.
New home sales, which make up about 10% of the market, jumped 8.8% last month to a seasonally adjusted annual rate of 693,000, according to government figures released Tuesday. That trounced the 670,000 rate projected by economists, according to a FactSet poll, and was the strongest monthly increase since December 2022.
Sales of new homes increased across the country last month, rising the most in the Northeast region by a robust 27.8% from February.
Meanwhile, sales of existing homes, which make up the vast majority of the housing market, fell 4.3% in March to a seasonally adjusted annual rate of 4.19 million, the sharpest drop in more than a year, the National Association of Realtors reported last week.
Housing market poised to remain difficult
The broader US housing market is expected to remain tough for Americans, with mortgage rates poised to stay well above 6% this year, economists say. The Federal Reserve doesn’t directly set mortgage rates, but its actions do influence them, and the central bank isn’t expected to cut interest rates anytime soon. A persistent undersupply of housing also remains a key pressure point in the market, contributing to low affordability.
Housing inventory has improved in recent months, but supply still isn’t keeping up with demand. This means homebuyers have limited options as some homeowners who locked in a low mortgage rate before the Fed began to hike rates in 2022 largely prefer to not sell their homes.
“Despite high prices and mortgage rates, homebuyers have limited options on the resale market, although resale inventories have improved some over the course of this year,” Gregg Logan, managing director at RCLCO Real Estate Consulting, said in a note Tuesday.
“The willingness of the major homebuilders to utilize incentives such as price reductions, mortgage rate buy-downs and paying buyers closings costs continue to support a healthy pace of new home sales,” he added.
A stalled housing market recovery?
The housing market began the year with some momentum as home sales surged, homebuilder sentiment perked up and inventory levels climbed, but now it seems to have fizzled out.
In addition to the March drop in existing home sales, residential construction of single-family homes also fell that month, declining 12.4% to a seasonally adjusted annual rate of 1.022 million units, according to Commerce Department data released earlier this month. Residential construction fell throughout the country except in the West. Meanwhile, building permits for future construction tumbled 3.7% in March to a five-month low.
Data from the National Association of Home Builders showed that 22% of builders cut homes prices in April, down from 24% in March. Meanwhile, the share of builders who offered a sales incentive edged lower to 57% in April from 60% in March. Sentiment among homebuilders in America held steady in April, NAHB said.
“April’s flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed,” NAHB’s chief economist, Robert Dietz, said in a release.
This story has been updated with additional context.
Mortgage rates continued to rise for the week ending April 25. The 30-year fixed-rate mortgage averaged 7.23% APR, up seven basis points from the previous week’s average, according to rates provided to NerdWallet by Zillow. (A basis point is one one-hundredth of a percentage point.)
Rates for 30-year fixed-rate loans have been hovering in the general neighborhood of 7% for the past year-plus, causing considerable pain for home buyers. The rise of mortgage rates in recent years has drawn lots of attention — and ire. As buyers attempt to wrestle their way into affordable homes, it feels like interest rates are definitely the storyline villain. But are rates the actual villain?
Let’s take a little journey back to the last time the U.S. was in a comparable rate environment, roughly winter 2000 to spring 2002. In April 2002, J. Lo is atop the charts. Tiger Woods is becoming the third golfer to win back-to-back Masters tournaments. “The Scorpion King,” starring Dwayne “The Rock” Johnson, is a hit at the box office. And interest rates on 30-year fixed-rate mortgages are at 7%.
Now, here we are, 22 years later. Jennifer Lopez’s latest album came out in February. Tiger’s playing in his 26th Masters. Dwayne Johnson hasn’t been in any movies yet this year, but The Rock did main event WrestleMania. And 30-year fixed rates? Yeah, they’re back at 7%.
With so much that’s oddly the same, let’s talk about why today’s 7% rates hit different. It’s not just because that slang would have been total nonsense to someone in 2002.
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Since April’s not over yet, we can’t look at median home prices for the month. But we can look at data for March 2024, which just came out. Last month, the median existing home price was $393,500, according to the National Association of Realtors.
You might want to cover your eyes for this one. In March 2002, the median existing home sale price was $158,200, per the NAR.
OK, you might say, but what about inflation? Well, if we take that March 2002 median price and put it in 2024 dollars, we get $276,347. So it’s not just inflation, or that a dollar doesn’t buy as much as it used to. It’s that housing prices, particularly in the 2020s, have risen much faster than inflation overall.
Let’s look at how those prices would translate to costs at these two different points in time. We’ll assume a 7% mortgage rate, a 10% down payment, and to keep things a bit neater, we’ll set aside additional housing costs like property taxes and insurance and just look at principal and interest. At 2002 prices, monthly principal and interest would be $947. At today’s prices? That’ll be $2,356.
It’s not that the U.S. has never seen 7% mortgage interest rates before. It absolutely has, and it’s seen way worse than that — the all-time high was over 18% in 1981. What’s new is the combination of these interest rates and super-high home prices. With the median home price up 18.9% over the last three years, rates may not be great, but it feels like prices are the actual villain.
What’s a home buyer to do? Possibly look to new construction. While NAR data shows sales of existing homes were down in March, U.S. Census Bureau numbers find that sales of new homes were up. New builds may offer a friendlier environment for buyers. Home builders can offer buyer incentives like rate buydowns — and unlike many home sellers, they aren’t faced with also trying to buy a home in this market.
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Nestled in the heart of the American South, Kentucky embodies a rich tapestry of history, culture, and natural beauty. Known as the “Bluegrass State,” it conjures images of rolling hills adorned with vibrant green pastures and legendary horse farms. From the bustling urban landscapes of Louisville to the serene countryside of Lexington, Kentucky offers a diverse array of experiences. However each state has its downsides to living there. In this ApartmentGuide article, we’ll dive into the pros and cons of living in Kentucky so you can gain valuable insight on what to expect.
Renting in Kentucky snapshot
1. Pro: Horse racing culture
Kentucky’s horse racing culture is deeply ingrained in the state’s identity, with the world-renowned Kentucky Derby serving as the pinnacle event. The Derby, held annually at Churchill Downs in Louisville, attracts visitors from across the globe to witness the thrilling races and immerse themselves in the traditions of racing. Additionally, Lexington, often dubbed the “Horse Capital of the World,” boasts numerous horse farms and equestrian events, further enhancing the state’s equine heritage.
2. Con: Humid summers
Kentucky’s humid summers can be challenging for residents, with high temperatures often accompanied by oppressive humidity levels. The combination of heat and moisture can make outdoor activities uncomfortable and increase the risk of heat-related illnesses. Additionally, the humidity can exacerbate air quality issues, particularly in urban areas like Louisville, where stagnant air masses can trap pollutants and allergens.
3. Pro: Bourbon distilleries
Bourbon distilleries dot the Kentucky landscape, offering residents and visitors alike a taste of the state’s rich whiskey-making tradition. The Bourbon Trail, which spans across various counties, allows enthusiasts to tour iconic distilleries such as Maker’s Mark, Jim Beam, and Woodford Reserve.
4. Con: Limited public transportation options
Limited public transportation options pose a hurdle for many Kentuckians, especially those in rural areas where access to reliable transportation is scarce. While larger cities in Kentucky have bus systems, they may not cover all areas comprehensively, leaving some residents reliant on personal vehicles for commuting and errands. In fact, Covington has a transit score of 28 meaning most errands require a car.
5. Pro: Natural beauty
Kentucky’s natural beauty captivates all who encounter it, from the rolling hills of the Bluegrass region to the majestic peaks of the Appalachian Mountains. Red River Gorge, located in the Daniel Boone National Forest, showcases breathtaking sandstone cliffs, lush forests, and countless hiking trails.
6. Con: Natural disasters
Kentucky’s susceptibility to natural disasters, including floods, tornadoes, and earthquakes, presents significant challenges for residents and communities. The state’s location in the Ohio River Valley and proximity to the New Madrid Seismic Zone increase the risk of catastrophic events that can cause widespread damage and displacement.
7. Pro: Low cost of living
With a low cost of living compared to many other states, Kentucky provides residents with affordability and financial stability. Housing prices are notably reasonable, as seen in Frankfort, which has a median sale price of $218,900 and an average rental price for a one-bedroom standing at $785. Additionally, everyday expenses such as groceries, utilities, and transportation tend to be more affordable, enabling residents to stretch their dollars further.
8. Con: Environmental concerns
Environmental concerns loom large in Kentucky, particularly in regions where industries like coal mining and manufacturing have left lasting impacts on air and water quality. Appalachia, in particular, has grappled with the environmental consequences of mountaintop removal mining, which has led to habitat destruction and water pollution
9. Pro: Outdoor recreational opportunities
Kentucky’s abundance of outdoor recreational opportunities invites adventure seekers and nature enthusiasts to explore its diverse landscapes. From boating and fishing on the state’s scenic lakes like Lake Cumberland and rivers like Big Sandy River to hiking and camping in its sprawling parks and forests, there’s something for everyone to enjoy.
10. Con: Challenging infrastructure
From aging roads and bridges to inadequate water and sewer systems, Kentucky has its fair share of challenging infrastructure. Rural communities often bear the brunt of these challenges, experiencing limited access to reliable utilities and transportation networks.
11. Pro: Rich history
Historic homes such as Ashland, the estate of Henry Clay, and My Old Kentucky Home provide insights into the lives of prominent figures in Kentucky. Meanwhile, Civil War battlefields like Perryville Battlefield State Historic Site and Camp Nelson Civil War Heritage Park preserve the memories of significant events and sacrifices, allowing visitors to connect with Kentucky’s storied past.
12. Con: Rural isolation
Rural isolation can be a significant drawback for residents living in remote parts of Kentucky, where access to essential services, healthcare, and employment opportunities may be limited. When considering a move to this state, you’ll want to consider the rural and urban cities that fit with your lifestyle.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
It’s a bit of a tricky morning in the bond market when it comes to reconciling the data with the market movement. At face value the headlines make a better case for lower rates with GDP at 1.6 vs 2.5, wholesale inventories missing big and Jobless Claims not too far from forecast. But the devil is in the details–specifically, the details inside the quarterly GDP data. GDP will be reported 3 times for Q1. Today was the first of those and as such, the PCE price data component offers a bit of a sneak peek at tomorrow’s PCE inflation data.
GDP is not a hugely important report, but PCE inflation is. With all that in mind, the PCE component in today’s data was 3.7 vs 3.4. In a world where a 0.1 beat/miss can cause massive volatility for the bond market, that’s a huge beat. Bonds will likely be feeling extra defensive until and unless tomorrow’s Core PCE number tells a slightly less dramatic story.
Stocks haven’t loved the data either, due to the implications for the Fed’s rate outlook. The following isn’t the pattern normally associated with stocks and bonds, but it is prevalent at times when the market is actively refining its outlook for the Fed Funds Rate.
In the slightly bigger picture, this morning’s weakness constitutes the first significant break above the 4.65 level and it breathes a bit more life into the uptrend that had dominated the month of April (the one that looked to be defeated by the 4.65 ceiling.
Pennymac Financial Services earned a profit of $39.3 million in the first quarter of 2024, the California-based multichannel lender and servicer announced Wednesday.
The company’s pretax gain in the first quarter was $43.9 million. That was less than the $38.1 million figure it posted during the same period last year but a significant improvement from the pretax loss of $54.2 million it incurred in fourth-quarter 2023.
“PennyMac Financial reported strong operating earnings in the first quarter, with an annualized operating return on equity of 15 percent in what is expected to be the one of the smallest quarterly origination markets of this cycle,” chairman and CEO David Spector said in a news release. “Strong volume increases in our consumer and broker direct channels drove continued profitability in our production segment.”
The company’s loan production pretax income was $35.9 million during the first quarter, down from $39.4 million in Q4 2023 but up from a pretax loss of $19.6 million in Q1 2023. Production revenue totaled $184.7 million, up 5% from the prior quarter and up 52% year over year.
Pennymac reported that the quarterly increase in production revenue was primarily tied to higher net gains on loans held for sale at fair value due to higher volumes in its direct-to-consumer channel. Meanwhile, the revenue growth compared to Q1 2023 was largely due to higher overall origination volumes and margins.
The total value of its loan acquisitions and originations dropped to $21.7 billion in unpaid principal balance (UPB), down 19% on a quarterly basis and 5% below year-ago levels.
During an earnings call on Wednesday, chief financial officer Daniel Perotti said that “Pennymac maintained its dominant position in correspondent lending in the first quarter” as it acquired $18 billion in volume. That was down from $24 billion in the prior quarter and was “driven by our focus on profitability over volatility,” he said.
In the wholesale channel, Perotti noted that locked loans were up 20% and funded loans were “essentially unchanged” from the prior quarter. But broker-channel margins grew from 79 basis points to 103 basis points during that period.
“The number of brokers approved to do business with us at quarter end was over 4,000 — up 36% from the same time last year,” Perotti said. “And we expect this number to continue growing as top brokers increasingly look for a strong second option.”
Pennymac’s servicing portfolio continues to grow. Its owned mortgage servicing rights (MSR) portfolio had a UPB of $386.6 billion on March 31, up 3% from the end of Q4 2023 and up 18% from the end of Q1 2023.
In response to an analyst’s question during the earnings call, Spector said he expects the company’s servicing channel to lead to more refinance opportunities when mortgage rates eventually decline.
“We have built a really great model in terms of growing the servicing portfolio as a byproduct of our organic growth strategy,” Spector said. “And as we continue to lead in the correspondent space and continue to grow our presence in the broker-direct space, I expect that our servicing will continue to grow at probably even a little faster clip. … I don’t see a melting ice cube scenario anytime in the future.”
Last year, Pennymac earned net income of $144.7 million, a decline of nearly 70% from the $475.5 million profit it posted in 2022. And in fourth-quarter 2023 alone, the company lost $36.8 million.
Its net revenues shrank from $2 billion in 2022 to $1.4 billion in 2023. Its overall profit was largely due to the strong performance of its servicing portfolio.
Legal troubles with Black Knight contributed to the loss in Q4 2023. Late in the year, an arbitrator awarded Black Knight $155.2 million in damages tied to a breach of contract claim in a four-year dispute involving the companies. Black Knight accused Pennymac of copying its mortgage servicing platform.
At the close of the market on Wednesday, Pennymac’s stock price was $92.07, up 4.86% since the start of the year.
The “Emerald City,” Seattle, WA, has picturesque mountain views, sparkling lakes, and iconic landmarks like the Space Needle and Pike Place Market. This Pacific Northwest city has so many hidden gems, vibrant neighborhoods, and stunning seasons that it’s no wonder about 734,000 residents live here.
In Seattle, you’ll find that the average rent for a one-bedroom apartment is $2,185. If you’re looking to rent an apartment in Seattle and are curious about the most expensive neighborhoods, then you’re in the right place. ApartmentGuide is here to help you explore the 11 most expensive Seattle neighborhoods to rent an apartment this year.
10 Expensive Neighborhoods in Seattle, WA
From picturesque waterfront neighborhoods to areas near the city center, there are plenty of amazing Seattle neighborhoods to rent in this year. Whether you’re looking for a luxury high-rise apartment or a place with views of Lake Union, you’ll find the right neighborhood on this list.
1. Lake Union 2. Westlake 3. First Hill 4. Downtown 5. Columbia City 6. Belltown 7. Northeast Seattle 8. Rainier Valley 9. North Seattle 10. West Seattle
Read on to find out what these neighborhoods have to offer.
1. Lake Union
Average 1-bedroom rent: $2,789 Apartments for rent in Lake Union
Lake Union is the most expensive neighborhood in Seattle, as the average rent for a one-bedroom unit is $2,789. There are plenty of reasons why this neighborhood draws residents. Lake Union is near attractions like the Museum of History & Industry and Gas Works Park, making it a prime location to explore the city. The area also has views of the cityscape and water, making apartment views gorgeous. If you’re looking for a taste of the neighborhood, there are a variety of local restaurants to explore, like Duke’s Seafood and Taco’s Chukis, showcasing Seattle’s food scene. For renters living in Seattle without a car, there are plenty of bus stops close to Lake Union.
2. Westlake
Average 1-bedroom rent: $2,673 Apartments for rent in Westlake
Westlake is a bustling area that’s northwest of Downtown Seattle. This beautiful neighborhood is near many attractions like Lake Union and Seattle Center, home to the Space Needle. Westlake is well-known for its green spaces, like Lake Union Park and the cafes along Westlake Avenue. The average rent for one-bedroom apartments is $2,673, about $500 above the city’s average, making it a pricier neighborhood. However, Westlake’s central location and amenities may be worth it. Westlake is also near some of the most expensive neighborhoods in Seattle to buy a home.
3. First Hill
Average 1-bedroom rent: $2,596 Apartments for rent in First Hill
With an average one-bedroom rent of $2,596, First Hill is the third most expensive neighborhood in Seattle. This neighborhood has plenty of historic homes in styles like Victorian and Craftsman, as well as properties with picturesque views of the cityscape. First Hill is also near I-5, making it a convenient location for commuters. And if you’re looking for a relaxing afternoon, you can find Freeway Park and the Frye Art Museum in the area. You can also explore Broadway, home to popular bars and restaurants like Stoup Brewing and Garage Billiards & Bowling. First Hill is also near some of the affordable neighborhoods to rent in Seattle.
Learn more about the First Hill neighborhood in Seattle.
4. Downtown
Average 1-bedroom rent: $2,552 Apartments for rent in Downtown
Downtown is the next most expensive neighborhood in Seattle with its central location near Pike Place Market and the Seattle Art Museum. Home to iconic attractions, like the Seattle Aquarium, Benaroya Hall, the Showbox, and the Seattle Great Wheel, it’s no wonder this area is popular. Downtown has a lot of shops and restaurants, reflecting Seattle’s vibe. You find spots like Pike Place Chowder, Beecher’s Handmade Cheese, and Ivar’s, alongside hidden gems and plenty of breweries.
Learn more about the Downtown neighborhood in Seattle.
5. Columbia City
Average 1-bedroom rent: $2,293 Apartments for rent in Columbia City
Just about 5 miles from Downtown, Columbia City is a stellar neighborhood if you want a more residential area. While more expensive, the perks of living in Columbia City may help offset the costs. For example, you can live in Seattle without a car as the Link Light Rail stops in Columbia City. You can also walk to attractions like the Beacon Cinema, Columbia Park, as well as the local restaurants along Rainier Avenue, like The Flour Box, Geraldine’s Counter, and Sam Choy’s Poke to the Max. Columbia City also has gorgeous historic homes and tree-lined streets.
Learn more about the Columbia City neighborhood in Seattle.
6. Belltown
Average 1-bedroom rent: $2,263 Apartments for rent in Belltown
Next up is Belltown, the sixth most expensive neighborhood in Seattle. Belltown is full of history and charm, with historic buildings and waterfront views. This area also has plenty of parks, restaurants, and attractions, so you’ll have lots to explore. Make sure to enjoy the outdoors at Olympic Sculpture Park, see a show at The Crocodile, or grab a meal at one of the neighborhood restaurants. It’s also the second most walkable neighborhood in Seattle, as you can easily get to Pike Place and the Seattle Center. It’s no wonder the rents are above Seattle’s average.
Learn more about the Belltown neighborhood in Seattle.
7. Northeast Seattle
Average 1-bedroom rent: $2,252 Apartments for rent in Northeast Seattle
Located north of Downtown, Northeast Seattle is the next neighborhood on our list. Northeast Seattle has a friendly atmosphere and community feeling, as it’s near the University of Washington campus. There are plenty of local cafes and restaurants along Roosevelt Way NE, University Avenue, and NE 65th Street, such as Araya’s Place and Portage Bay Cafe. You can also check out some of Northeast Seattle’s green spaces, like Ravenna Park and Magnuson Park. With its bustling atmosphere, location near Lake Washington, and public transit options, there are so many reasons people live here.
8. Rainier Valley
Average 1-bedroom rent: $2,251 Apartments for rent in Rainier Valley
Rainier Valley takes the eighth spot on our list of most expensive neighborhoods in Seattle. The average rent for a one-bedroom unit is roughly $100 more than the city’s average. Rainier Valley is a great option to consider if you’re looking to be near Lake Washington and have picturesque views. It’s about 5 miles from Downtown, which means you’ll have easy access to the city center, without living in the bustling atmosphere. Make sure to explore Rainier Avenue, which has plenty of restaurants and shops, or check out Pritchard Island Beach.
9. North Seattle
Average 1-bedroom rent: $2,224 Apartments for rent in North Seattle
A well-loved Seattle neighborhood, North Seattle is the next area. North Seattle is home to Thornton Creek Natural Area Park and Meadowbrook Playfield Park, meaning there’s plenty to do throughout the week. There are plenty of neighborhoods in the North Seattle area, so it’s a great area to explore the city. If you need to commute to work, there are lots of options, as the I-5 freeway and the Northgate Light Rail stop are nearby.
10. West Seattle
Average 1-bedroom rent: $2,194 Apartments for rent in West Seattle
The tenth most expensive neighborhood in Seattle is West Seattle. This area has a vibrant feeling with its popular restaurants and quirky shops along California Avenue, like Easy Street Records, Bakery Nouveau, and Raccolto. You can find parks like Lincoln Park and Alki Beach Park, which are perfect for enjoying a sunny day in Seattle. West Seattle also hosts the West Seattle Summer Fest each year, providing residents with lots of opportunities to enjoy their neighborhood.
Learn more about the West Seattle neighborhood in Seattle.
Methodology: Whether a neighborhood has an average 1-bedroom rent price over the city’s average. Average rental data from Rent.com in March 2024.