Steve Resch, vice president of retirement strategies at leading reverse mortgage industry lender Finance of America, knows a lot about the intersection between the interests of financial planning professionals and reverse mortgage industry members.
Financial planners have been, and remain, one of the most sought-after referral partnerships for reverse mortgage professionals to establish ties with. That has certainly not diminished in the current business environment.
To get a better understanding of the kinds of concerns and interests financial planners have at the moment, RMD sat down with Resch to discuss some of what he is seeing right now.
Chris Clow/RMD: The reverse mortgage business in general is going through a time of reduced volume. But it seems like things are starting to pick back up. Conversations I’ve had with a lot of front-line originators have been more optimistic over the past few months. And I’m curious how this combines with what you do for Finance of America.
Steve Resch: In my position, I work directly with financial advisers. We have not really seen much change in our business recently, because a lot of what we do with the advisers involves using home equity for strategic planning purposes, and that doesn’t really go away in high interest rate environments.
We have still had numerous conversations and activity with the advisers. However, we’re finding — and I’ve seen this for a while, and it’s becoming more and more prevalent — that the most receptive part of our conversations is the use of home equity for long-term care management.
Clow: That’s interesting. Why is that?
Resch: This is something the advisers are very open to. I just came back from an investment conference last week, where I spoke on this topic, and they were very receptive, very open to it, because the advisers all need to figure out how to manage long-term care expenses for our clients. The clients are very hesitant to pay for an insurance solution, which can be very expensive — we could be talking $10,000 to $15,000 per year for an insurance solution.
So, if we can manage that risk by using home equity to manage the risk, and our only costs involved there are setting up, for example, a line of credit, then we’ve had limited costs. We’ve got cash-flow savings for the next 20 years that we would have been spending on an insurance solution. And yet, we’ve still managed the risk because we have a portion of home equity reserved for long-term care planning.
And that, of course, grows and compounds over time. It has an inflation factor built in just like an insurance policy does, because it’s tied to interest rates, which, of course, are tied to inflation. So, the advising community is very open and very excited about this because again, it’s managing the risk at low cost.
Clow: One of the predominant things I’ve heard from people in the business is that HECM for Purchase (H4P) is a sleeping giant just waiting for the right opportunity. How, if at all, has H4P entered the conversation with the financial planner partners you know?
Resch: It is definitely becoming more prevalent as well. Circling back to the conference I attended, I had two female advisers come up to me after the presentation. They told me they both used H4P in their divorce settlements. I think this is a phenomenal opportunity.
In fact, we’re working on a presentation about using H4P for divorce settlements, but aside from that, it’s a phenomenal opportunity. Your investment assets are what provide income; you don’t live off of home equity. Home equity is where you live and stay. So, using the reverse for purchase, they were able to get into homes they wanted to be in and not drain down any invested assets, which provide revenue for that. It’s a great opportunity.
Clow: Is it a “sleeping giant” in the business, or is that potentially overblown?
Resch: I do believe it’s a sleeping giant. I think it probably would have been more prevalent even a few years ago, if we hadn’t had the massive explosion in home appreciation brought on by COVID. I think that pushed a lot of people to the sidelines because it was really a cash purchase market. You didn’t have time to really go through financing — at least that’s the way it was in my area. everything was being purchased for cash and then you finance later.
So, I think the real estate markets in general, while still strong, have settled down. And you have opportunities to negotiate; you have opportunities to do financing. And I think this is an ideal time for the reverse for purchase to really start moving to the forefront.
Clow: I’m curious about the evolutions that you’ve observed in the conversation since the pandemic. There was a huge refinance volume that dropped off, and then you’ve also had industry consolidation, and home prices have not ticked down significantly at a national level. What, to you, is the most identifiable evolution of your conversations since the pandemic?
Resch: Our goal, or our objective, is always to teach, educate and present the opportunity of using home equity as a strategic component in a financial plan. So, prior to COVID, through COVID, that has still been our messaging: Let’s use home equity. We’re not paying attention to interest rates or changes in PLFs; we’re looking at the concept of using home equity to safeguard and enhance the retirement plan.
To that end, I would say that, over the past several years, that education is getting out there, and I do believe we are starting to turn that learning curve where advisers are much more open to it. Circling back to the conference I was at, we had numerous advisers who came up and what they said was, “Thank you for being here, it’s really great to be able to talk to someone in the industry in person.”
A lot of the issues that they had were that if they wanted to find out information about a reverse mortgage, and they would start Googling it, everything that popped up was from a lender. But we had an opportunity to have a one-on-one conversation without the pressure of a sale.
Clow: Is that important?
Resch: Yes, this is what these people need. They still need to be educated; you can read about it, you can run through scenarios, but they still need that conversation, that education. And I think we are still evolving toward that, where they’re much more open to talking, much more open to listening and asking questions, because they see the reality as well that we have the demographics that demand that we look at home equity as far as retirement planning goes.
So, again, our evolution, I don’t think I can tie it to anything that’s really happened as far as COVID or anything else. It’s all a learning curve, and I think we are really starting to move up that S-curve.
Everybody loves a relaxing vacation, but the chaotic nature of an airport terminal can induce anxiety in even the most zen of travelers. Loudspeaker announcements, beeping golf carts and crying children create a cacophony — wouldn’t it be nice to wait for your flight in a peaceful environment instead? Enter airport lounges.
Hanging out in an airport lounge before a trip or on a long layover can enhance your travel experience by a mile. And these havens aren’t just for those flying in fancy cabins.
What are airport lounges?
Airport lounges are quiet areas inside the terminal where passengers can relax before a flight or during a layover, eat snacks, work using the lounge’s Wi-Fi network, and sometimes even shower. Typically only paying members, passengers flying in business or first class, or cardholders of certain travel cards are allowed access. Here’s how to get in to airport lounges.
How to get in to airport lounges
There are six ways to get access to airport lounges.
1. Fly in a premium cabin
One of the most reliable ways to get airport lounge access is to fly in first or business class (typically on international routes and select transcontinental flights). This may sound like an expensive way to access a lounge, but if you purchase your flight with airline miles, your ticket still grants you entry to a lounge — either the one for your carrier or for one of its partners.
2. Reach elite status with an airline loyalty program
Frequent flyers are typically rewarded for their loyalty, and if you fly enough with one carrier or multiple carriers in the same alliance, you can enter airline lounges when flying on select routes.
For example, Executive Platinum, Platinum Pro or Platinum elite members of the American Airlines AAdvantage program can enter an Admirals Club on departure or arrival on qualifying international flights operated by American or Oneworld partners, even if they fly economy — and they can bring one guest with them.
Additionally, if you reach status with an alliance, which usually requires earning status with a specific airline, you’re able to get free airport lounge access when flying on a member airline.
3. Purchase a day pass
Another option for accessing an airport lounge is to pay for it.
United Airlines sells one-time passes that allow you to enter a United Club a single time, either before your flight or on a layover. Alaska Airlines also sells single-entry passes to passengers wishing to enter an Alaska Lounge. American Airlines sells day passes that are valid for 24 hours and allow you to enter multiple Admirals Clubs within that period.
Here’s how much airline lounge access will cost you with the following carriers:
Alaska — $60.
American — $79 or 7,900 AAdvantage miles.
United — $59.
Delta Air Lines no longer sells single-visit passes to Delta Sky Clubs, and annual membership is available to Medallion members only, meaning holding certain credit cards is the only way to access Delta lounges for general SkyMiles members (more on that later).
4. Purchase an annual membership
If you’re a frequent traveler, buying an annual lounge membership instead of repeatedly buying day passes can make sense. Of course, the value will depend on how often you fly with that specific airline.
Let’s take a look at how much an annual airline lounge membership will cost for individual, non-elite status flyers.
Alaska — $550.
American — $850 or 85,000 AAdvantage miles.
Delta — $695 or 69,500 SkyMiles.
United — $650 or 85,000 MileagePlus miles.
So, for example, if you’re going to fly round-trip with United six times in a year (12 individual flights), buying a day pass to the lounge each time would cost you $708 total ($59 x 12); an annual membership at $650 would be a better deal.
5. Present your military ID
Sometimes, being a military member can get you access to airport lounges. For example, the USO airport lounges are designed for active-duty service members and their families who are stationed around the globe.
Additionally, some airline lounges, like Admirals Clubs, offer complimentary access to U.S. military personnel in uniform traveling on American Airlines flights. United also provides complimentary access to U.S. military personnel at its United Club locations.
6. Open a credit card with airport lounge access
Many premium cards on the market offer some kind of lounge access to cardmembers. Premium co-branded airline cards typically offer access to the respective airlines’ lounges, and bank cards typically offer access to their own lounges and to lounges in the Priority Pass network.
Travel cards that give you lounge access
Let’s take a look at some of the best credit cards with lounge access.
Co-branded airline credit cards
Citi® / AAdvantage® Executive World Elite Mastercard®
By paying the $595 annual fee for the Citi® / AAdvantage® Executive World Elite Mastercard®, you get access to the Admirals Club without having to pay the annual membership (a $255 savings), plus you get all of the other cardmember perks.
Standout perks include getting the first checked bag free for up to nine passengers booked on the same reservation, Global Entry or TSA PreCheck credit of up to $100 every four years, a 25% savings on in-flight purchases, and the opportunity to earn AAdvantage miles on purchases made with the card.
Delta SkyMiles® Reserve American Express Card
The Delta SkyMiles® Reserve American Express Card offers access to Delta Sky Clubs for primary cardmembers and holders of four annual one-time guest passes (in conjunction with a same-day Delta ticket). As of Feb. 1, 2025, Delta SkyMiles® Reserve American Express Card holders will get a total of 15 Sky Club Passes per year. Terms apply.
Additionally, the card offers access to The Centurion Lounges by American Express, but access comes with restrictions. First, you must be flying that day with Delta, and second, you must have paid for the flight with an American Express card. A cardmember may bring up to two guests to The Centurion Lounges for $50 per person ($30 per child ages 2-17). Terms apply.
United Club℠ Infinite Card
The United Club℠ Infinite Card is a premium co-branded United card that comes with United Club membership for the primary cardholder and eligible guests (two adult guests, or one adult and dependent children under the age of 21).
You must be flying United or a Star Alliance partner to access United Clubs.
United Club℠ Infinite Card
NerdWallet Rating
Annual fee
$525
General travel cards
The Platinum Card® from American Express
As a cardmember, you can access the following airport lounges:
Airspace Lounge.
Delta Sky Club (when flying Delta).
Escape Lounge.
Lufthansa Business Lounge (regardless of ticket class when flying with Lufthansa, Swiss International Air Lines or Austrian Airlines).
Lufthansa Senator Lounge (when flying business class with Lufthansa, Swiss International Air Lines or Austrian Airlines).
Plaza Premium Lounge.
Priority Pass Select (enrollment required).
The Centurion Lounge.
As of Feb. 1, 2025, Sky Club access for The Platinum Card® from American Express members will be reduced to 10 visits per year, unless your yearly purchases on the card total $75,000 or more. And if you do spend that much on The Platinum Card® from American Express, you’ll receive complimentary access for up to two guests to Centurion Lounges. Otherwise, the Centurion Lounges charge a guest fee of $50 per adult and $30 per child ages 2-17. Terms apply.
Chase Sapphire Reserve®
When it comes to free airport lounge access, travelers who hold the Chase Sapphire Reserve® card have fewer options than those who hold other cards, but there are still a couple of options. With this credit card, you can enter the following lounges at no extra cost:
Chase Sapphire Lounge by The Club.
Priority Pass Select.
Although only four Chase Sapphire Airport Lounges are currently open, the network is expanding. To gain access to these lounges, you must activate your Priority Pass Select membership, which includes access to more than 1,500 airport lounges around the world. Up to two guests are allowed for free.
Capital One Venture X Rewards Credit Card
Capital One Lounge.
Plaza Premium Lounge.
Priority Pass Select lounges.
Capital One Lounge locations are at just a few U.S. airports at the moment. Primary cardholders have unlimited access and can bring up to two guests. Entry for additional guests costs $45 each.
How the cards compare
The Platinum Card® from American Express
Chase Sapphire Reserve®
on Chase’s website
Capital One Venture X Rewards Credit Card
Annual fee
Welcome offer
Earn 80,000 Membership Rewards® Points after you spend $8,000 on eligible purchases on your new Card in your first 6 months of Card Membership. Terms Apply.
Earn 75,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,125 toward travel when you redeem through Chase Travel℠.
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel.
Still not sure?
Which banks offer airport lounge access?
Several banks offer card options with airport lounge access. If you’re looking for a card that includes lounge access as one of the benefits, consider the following credit card issuers.
American Express
As mentioned, The Platinum Card® from American Express offers lots of lounge options for travelers seeking some peace and quiet. However, if you don’t want to pay a high annual fee, we recommend the American Express® Green Card. It comes with an up-to-$100 statement credit for LoungeBuddy purchases. Terms apply.
LoungeBuddy, a lounge booking platform, sells limited-time access to select lounges in airports around the world. Depending on the airport, you might be able to get a couple of one-times passes with your annual credit.
Capital One
Capital One offers lounge access with its premium Capital One Venture X Rewards Credit Card. Cardholders receive complimentary Priority Pass Select membership, Plaza Premium Lounge access, and unlimited access to Capital One’s own Capital One Lounges.
Chase
For general travelers, the Chase Sapphire Reserve® card is going to offer the most convenient lounge access with its Priority Pass Select membership and access to the Chase Sapphire Lounges.
United flyers will find what they need with co-branded United cards. As we’ve discussed, the United Club℠ Infinite Card offers unlimited United Club access to primary cardholders, but if you’re a casual traveler, the United℠ Explorer Card will do the job. It comes with two one-time United Club passes every card membership year, so you can use it twice or enter once with a guest.
United℠ Explorer Card
NerdWallet Rating
Annual fee
$0 intro for the first year, then $95
Citibank
Though the Citi Prestige® Card is no longer open for new applications, those who currently hold it can take advantage of Priority Pass Select perks.
American Airlines flyers will enjoy unlimited Admirals Club access with the Citi® / AAdvantage® Executive World Elite Mastercard®.
U.S. Bank
How to get airport lounge access recapped
Leave the crowded gates behind you and head to an airport lounge to wait out the layover. There are many ways to gain entry, even for passengers sitting in economy cabins — and you might be able to treat your travel companions to some peace and quiet as well.
Credit card memberships, elite status and lounge passes can transport you from a chaotic airport terminal to a serene lounge, making your next connection less stressful.
To view rates and fees of The Platinum Card® from American Express, see this page.
To view rates and fees of the Delta SkyMiles® Reserve American Express Card, see this page.
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:
I spoke to a friend the other day who is selling their home and moving up to a bigger one.
Crazy I know! What with home prices where they are the mortgage rates more than double their early 2022 levels.
Despite this, they needed more space (and wanted a new locale) and were ready to move on from their old home.
Sure, it might not be the best time to buy a home, but it’s not always about the financials.
And even so, they’ve got a plan to offset the big jump in interest expense.
They’ve Currently Got a 30-Year Fixed Mortgage Set at 2.75%
First some background on the deal. They purchased their existing home around 2012, which was basically the housing market bottom post-GFC.
This was one of the very best times to purchase a home in recent memory. Aside from seeing their home nearly triple in value, they also snagged a crazy low mortgage rate.
A 30-year fixed at 2.75%. Pretty hard to beat. The purchase price of the home was around $400,000, and is expected to sell for around $1 million today. Also pretty hard to beat!
Problem is, mortgage rates are now closer to 7% and home prices on replacement homes are comparatively high as well.
In short, if you sell today you take on a much higher mortgage rate and sales price. This means a significantly higher payment.
They can actually absorb the higher payment, but they know swapping a 2.75% mortgage for a 7.25% mortgage isn’t a great trade-off.
So here’s the plan to offset that much higher interest expense.
Using Sales Proceeds to Prepay the New Mortgage
Now this might not be for everyone, but many home sellers today are flush with home equity.
They purchased their homes either decades ago and have no mortgage, or they purchased in the early 2010s and have seen property values skyrocket.
If we consider my friend’s $400,000 home purchase in 2012 with a 20% down payment and 2.75% mortgage rate, the loan balance would be around $222,000 today.
Assuming a sales price of $1 million, they might walk with $650,000 or more. They have elected to use some of those proceeds to put a dent in the new mortgage.
Not all of it mind you, to save for an emergency fund. But a good chunk of it.
Once their old home sells, they’ll apply a large lump sum payment to the new loan. Let’s pretend the new home was $1.2 million and they put 20% down again.
The loan amount is $960,000 and the monthly payment at 7.25% is about $6,550. Obviously, a huge jump from their old payment of about $1,300.
But they’re able to make the higher monthly payment, perhaps due to higher wages. Or maybe because they could always afford more.
Regardless, they don’t need a lower payment to make it work. And their plan is to knock down that loan balance in short order.
They Can Pay Off the New Loan in Less Than 15 Years
A Lump Sum Payment Comparison
$960k loan amount
No extra payment
$300k lump sum payment
Interest Rate
7.25%
7.25%
Monthly Payment
$6,548.89
$6,548.89
Loan Term
30 years
13 years
Interest Savings
n/a
$1,018,498
Now let’s imagine that once their old home sells, they apply $300,000 in sales proceeds to the new mortgage.
That knocks down the balance to around $657,000 just a few months into their new loan term.
Importantly, this extra mortgage payment does not lower their future mortgage payments, since that’s not how mortgages work.
They’d still have to continue making that payment of about $6,550 unless they asked the lender for a loan recast.
However, and this is a biggie, they’d save about $1 million in interest if they kept the loan to maturity.
And speaking of maturity, their loan would be paid off in about 13 years instead of 30 years.
This would effectively turn their 7.25% mortgage rate into something comparable to their original interest rate. All thanks to sending those sales proceeds toward the new mortgage.
A Mortgage Refinance Still Remains an Option
In the meantime, they can also keep an eye on mortgage rates and if they fall enough, a rate and term refinance could be an option as well.
So they’re not necessarily stuck with the new 7.25% rate. And if rates do come down, they’ll have a much smaller outstanding loan balance.
This means their loan-to-value ratio (LTV) will be much lower, which equates to fewer pricing adjustments.
For example, their LTV might be closer to 50% instead of 80% when it comes time to refinance. Generally speaking, this means a lower mortgage rate too.
Aside from a refinance, a loan recast is also typically an option, assuming they want a lower payment.
This won’t save them as much money, nor will the mortgage be paid off early, but it brings monthly payments down by re-amortizing the loan based on the smaller balance.
But if you’re more interested in paying less interest, perhaps because you were used to holding a 2-3% mortgage, this is one way to do it. Assuming you can afford the higher monthly payment.
And it’s one way an existing homeowner with mortgage rate lock-in can free themselves without feeling bad about losing their old, cheap home loan.
Despite persistently high interest rates, big four title firm Fidelity National Financial recorded a much stronger start to 2024 than it did a year ago.
In first-quarter 2024, Fidelity reported total revenue of $3.299 billion, up from $2.474 billion a year ago. Its net earnings were $248 million, compared to a $59 million net loss in Q1 2023. The firm attributed its stronger results to better performance from both its F&G segment and its title insurance segment.
The firm’s title segment reported $1.7 billion in revenue, up 7% year over year, and pretax earnings of $218 million, up from $157 million a year ago. These improvements came as the number of direct title orders opened in the quarter jumped from 308,000 in Q1 2023 to 315,000 in Q1 2024.
These increases came despite a 2% annual decline in the number of refinance orders opened per day and flat growth in the number of commercial orders opened per day. The number of purchase orders opened per day was up 5% on a yearly basis.
“In the first quarter, we saw normal seasonality in purchase opened orders with sequential improvement coming off the fourth quarter,” Fidelity CEO Mike Nolan told investors and analysts during the firm’s Q1 2024 earnings call on Thursday.
“In April, purchase open orders per day were up 4% over last year, but higher mortgage rates may temper purchase volumes going forward. Refis are holding steady at roughly 1,000 per day at the current floor. Commercial volumes continue to be resilient and consistent.”
Looking ahead, while Nolan believes that the housing market will rebound, he noted that the timing is “uncertain and largely dependent on lower mortgage rates.”
“In the scenario where more inventory comes into the market and rates come down, we are well positioned to capture upside to last year’s performance,” Nolan added. “Overall, higher volumes above current trough levels would help to drive stronger incremental margins and showcase the scale and efficiencies that our diversified national footprint provides, much like what we saw in 2019 through 2021.”
Faced with these challenges, Nolan said the firm remains focused on monitoring its headcount and footprint, as it looks to manage expenses.
In addition to sharing his thoughts on the housing market and macroeconomic landscape, Nolan also had some things to say about the recent title insurance proposals announced by the federal government. These include the use of attorney opinion letters in place of title insurance, changes to who pays for a lender’s title policy and waivers for title insurance on certain transactions, such as refinances.
Nolan noted that he and Fidelity “strongly support” the overall goal of making homeownership more affordable. But he added that the recent announcements and comments from the Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB) are “misguided and display a misunderstanding of the vital role in value that title insurance provides consumers and the broader economy, and the critical role it plays in helping to make the American dream of homeownership a reality.
“The title industry not only protects consumers’ property ownership rights but also the critical integrity of land records,” Nolan added. ” In addition, we are our first line of defense in helping protect buyers and sellers from real estate and wire fraud. Title insurance also insures a duty to defend them in the event of a covered claim, and title insurers have state-mandated reserves standing behind their policies, unlike attorney opinion letters or a GSE waiver.
“We welcome the opportunity to continue conversations with the FHFA and CFPB, and we’ll continue to actively engage with all stakeholders in discussing the fundamental value that title insurance and settlement services deliver to America’s homebuyers and sellers, lenders and other participants, in what for many is their most important real estate transaction.”
When you take out a mortgage, you can deduct the amount of money you pay on mortgage interest from your taxable income. But is home equity line of credit (HELOC) interest tax deductible, too? Put simply, it depends on when you took out the HELOC and how much mortgage debt you have.
Here’s what you need to know about HELOC tax deductions, including the requirements and limitations on HELOC tax-deductible expenses, plus how to calculate your deduction.
What Is a HELOC?
Whether to cover renovation costs or consolidate debt, homeowners can borrow against the value of their home to secure the necessary funding. There are two main types of home equity loans: a conventional home equity loan and a home equity line of credit, also known as a HELOC. A HELOC functions as a revolving line of credit that uses home equity — the home’s value minus the amount you still owe on the primary mortgage — as collateral.
How much you can borrow typically ranges from 75% to 85% of your home equity. Generally, lenders require a minimum of 15% to 20% equity in your home to be eligible for a HELOC.
When comparing a HELOC vs a home equity loan, a key difference is that a HELOC allows you to draw funds as you need them, up to a maximum limit, over a draw period (often 10 years). By contrast, home equity loans disburse funds all at once.
With HELOC loans, you pay interest only on the amount you withdraw. Once the draw period ends, any remaining borrowed funds and interest are repaid over a repayment period, which can vary but typically spans 10 years.
Dive deeper: What Is a Home Equity Line of Credit?
How Does a HELOC Affect Your Taxes?
The interest paid on a HELOC could qualify as a tax deduction to lower your taxable income. If you own a home and are planning to claim a HELOC tax deduction, there are some requirements and limitations to keep in mind.
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.
Requirements for the HELOC Interest Tax Deduction
To answer “is interest on a HELOC tax deductible,” it’s essential to check that you meet certain requirements set by the Internal Revenue Service (IRS).
Since the Tax Cuts and Jobs Act of 2017, there are stricter requirements for how funds are spent to be eligible for a HELOC tax deduction. Specifically, funds from a HELOC must be used to buy, build, or improve a qualifying home — either a primary or second home. Eligible expenses can range from rewiring a house to replacing a roof or remodeling a kitchen. Note that funds must be spent on the same property used to secure the HELOC.
It’s also required that you have positive equity in the home used to secure the HELOC. If you have an underwater mortgage, meaning you owe more on the home than its value, you are not eligible for a HELOC tax deduction.
These requirements are in place for tax years 2018 through 2025. Prior to the rule change, a HELOC tax deduction could be made for interest paid on debt used for any type of personal expenses, not just home improvements.
Recommended: Cash Refinance vs. Home Equity
HELOC Tax Deduction Purchase Limits
HELOC tax deductions are not unlimited. So, up to what amount are HELOC loans tax deductible?
The IRS allows you to deduct interest on a maximum of $750,000 in residential loan debt (or $375,000 if married filing separately), including the primary mortgage and a HELOC. For instance, if you had $700,000 left on a home mortgage loan and $150,000 in HELOC debt, you could only deduct interest on the first $750,000 of debt.
If your primary mortgage or HELOC was approved before the 2018 tax year, you may be eligible to claim interest up to the previous limit of $1 million (or $500,000 if married filing separately). Borrowers who took out a HELOC in 2017 or earlier should note that the rule change did away with the $100,000 limit (or $50,000 if married filing separately) on home equity debt for tax deductions.
Tax Deduction Limits on Primary Mortgages
The tax deduction limits on primary mortgages are based on when the mortgage loan was taken out. If you took out a mortgage before October 13th, 1987, there is no cap on mortgage interest tax deductions. Homebuyers who got a mortgage between October 13, 1987 and December 16, 2017, can deduct interest on up to $1 million in total mortgage debt for married couples filing jointly and single filers. The limit is $500,000 for married couples filing separately.
If you took your mortgage out after December 16, 2017, you can deduct up to $750,000 (or $375,000 if married filing separately).
These limits applied to all combined mortgage debt, including first homes, second homes, and HELOC loans.
Is Home Equity Loan Interest Tax Deductible?
The tax deduction rules for home equity loan interest is the same as a home equity line of credit. As long as you’re using funds to buy, build, or improve a home, you can claim a tax deduction on mortgage debt up to $750,000.
Recommended: What Is a Home Equity Loan?
How to Calculate a HELOC Interest Tax Deduction
Prior to filing taxes, you should receive IRS Form 1098 from your HELOC and mortgage lenders. This form indicates the interest you paid on your HELOC, primary mortgage, or home equity loan in the previous year.
If you used any HELOC funding for ineligible uses, such as personal expenses or debt consolidation, you’ll need to subtract that portion to get the deductible interest.
Besides the interest you paid on your primary mortgage and HELOC loan, total up other deductions like property taxes, mortgage points, and student loan interest. Since you can only deduct mortgage and HELOC interest payments with an itemized deduction, it’s important to check that the total of your deductions exceeds the standard deduction amount.
Here are the standard deduction amounts for tax year 2024:
• Single or Married Filing Separately: $14,600.
• Married Filing Jointly or Qualifying Surviving Spouse: $29,200.
• Head of Household: $21,900.
If the mortgage and HELOC interest, plus other tax deductions you’re eligible for, exceed the above amounts, then it’s worth considering itemizing.
Recommended: Personal Line of Credit vs. HELOC
How to Deduct Home Equity Loan Interest
To deduct home equity loan interest, you’ll need to gather any receipts or invoices documenting how the money was spent. Be sure to keep records of transactions for eligible home renovations and improvements to verify your deductions in case you are audited by the IRS.
Once you’ve compiled all the necessary documentation, you’ll itemize your deductions using Schedule A of IRS Form 1040.
Does a HELOC Affect Property Taxes?
While the amount you take out through a HELOC won’t affect your property taxes, the improvements you make to your home could potentially increase the value of your home. If your renovation is substantial and involves a permit, it could be more likely to change the appraised value and potentially increase your property taxes.
The Takeaway
You can deduct the interest paid on your HELOC if the funds are used to buy, build, or improve your home. HELOC tax deductions must be itemized, and they are only allowable for the first $750,000 in mortgage debt on qualifying primary and secondary residences.
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
Do you report a HELOC on your taxes?
You report your HELOC interest on your taxes if you’re claiming an itemized deduction and you used your HELOC to build or improve your home.
Will a HELOC appraisal raise my taxes?
No, a HELOC appraisal will not raise your taxes. Property taxes are based on the appraised value of your home by your local government.
Does HELOC affect capital gains tax?
No, a HELOC does not affect capital gains tax on a home sale.
Photo credit: iStock/damircudic
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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.
Do you want to learn how to get free PayPal money? Yes, there are actually many ways to get cash straight in your own PayPal account. Receiving PayPal cash for the extra income you make is great because PayPal cash can be used for almost all online shopping. If you want to increase your budget…
Do you want to learn how to get free PayPal money?
Yes, there are actually many ways to get cash straight in your own PayPal account.
Receiving PayPal cash for the extra income you make is great because PayPal cash can be used for almost all online shopping.
If you want to increase your budget without working extra hours, earning free PayPal money could be the solution. Many legitimate platforms offer tasks like surveys, watching videos, or trying new apps in exchange for cash directly deposited into your PayPal account.
I have personally used many of the apps below on a regular basis and have earned a lot of free PayPal money over the years.
Recommended reading: How To Get $20 PayPal Now
How To Get Free PayPal Money
Here are some places where you can start earning free PayPal money:
Below is more detailed information about each method for getting free PayPal cash in your PayPal account.
1. Swagbucks
Swagbucks is a well-known rewards website that gives you PayPal cash as a reward. It has been downloaded over 5 million times and has paid out over $500 million in rewards.
On Swagbucks, you can earn points called “SB” by answering surveys, getting cash back when you shop through their platform, and watching short videos.
With the points you earn on Swagbucks, you can put money directly into your PayPal account. You can redeem your points starting at $5 (this is 500 points) all the way up to $250 (25,000 points).
I began using Swagbucks about 10 years ago, and since then, I’ve earned over 110 free gift cards for myself, including a lot of PayPal cash. I don’t spend a lot of time on it – just every now and then.
Sign up for Swagbucks here and get up to a free $10 bonus.
2. User Interviews
User Interviews is a company that pays for online studies. These are more in depth than paid online surveys, and you can earn around $50 to $100 per hour or more for sharing your opinions and feedback.
They launch over 2,000 studies monthly, and they have paid over 85,000 people in the last year.
These are typically completed over the phone or in a video call where an interviewer is asking you questions.
The average study pays over $60. When you participate in User Interviews, you can receive payments in various forms such as cash, a check, PayPal, Amazon gift cards, Visa gift cards, and more.
You can click here to sign up for User Interviews.
Recommended reading: User Interviews Review – Make $50 To $100 An Hour Sharing Your Opinion
3. KashKick
KashKick is a rewards platform where you can get rewards for doing things like answering questions and playing games online. You can then turn these rewards into free PayPal money.
They have games like Monopoly GO, Yahtzee, Bingo Blitz, Scrabble Go, and others where you can earn $100 or more per game.
You need just $10 to cash out.
Sign up for KashKick here.
4. Ibotta
Ibotta is an app that gives you money back when you buy groceries. Just upload your receipts after you shop to earn cash that you can use as free PayPal cash.
Here’s how Ibotta works:
Browse offers – Check the Ibotta app to see what cash back offers are available before you go shopping (like for granola bars or toothpaste).
Shop in store – Go to the store and make your purchases.
Upload your receipt – Take a picture of your grocery receipt using the Ibotta app on your phone to earn cash back.
Some examples of the cash back you might be able to earn include: $0.50 cash back for buying body wash, $3.00 cash back for buying laundry detergent, and $1.00 cash back for buying cereal.
You need $20.00 to cash out to PayPal in the Ibotta app.
You can join Ibotta here.
5. Upside
Upside is an app that gives you cash back when you buy gas at certain gas stations. You can earn about $150 per year in cash back. Not all gas stations nearby are part of the app, but many are, so you’ll likely find some that qualify near you.
When you use the app for the first time, you can get a higher cash back amount to help you get familiar with it. In my first experience with the app, I received $0.74 back per gallon. I bought 12.62 gallons of gas and saved $9.33 just by using the app for the first time. It’s super easy and was a no-brainer to use.
Getting cash back on your gas is nice, especially with how expensive gas is these days!
To complete a PayPal cash-out on Upside, you need just $1.00 in your account.
You can sign up for Upside here.
6. Sell your old phones on Decluttr
Decluttr is a website where you can sell your old phones, CDs, DVDs, books, video game consoles, and more. It’s one of the most popular places to buy and sell electronics and tech items because they pay well and quickly.
Here’s how Decluttr works:
Open the Decluttr app and get a free valuation for the items you want to sell. It takes just a few moments to see what your item is worth.
Tell them the make, model, and condition of what you are selling. If you’re selling DVDs, CDs, or games, then you just enter your barcode or take a picture of the barcode with the Decluttr cell phone app.
If you’re satisfied with the offer for your item from Decluttr, just find a box that will keep it safe during shipping. Pack the item in the box, and Decluttr will provide a free shipping label. Simply print out the label and tape it to your box to send it off.
Finally, once Decluttr receives and checks your item, you’ll get paid the next day through direct deposit to your bank account or PayPal.
You can check out Decluttr here.
7. American Consumer Opinion
American Consumer Opinion is a site where you can take online surveys and earn points.
Their surveys pay around $1 to $5 each and once you earn enough points, you can redeem them for free PayPal money.
You need at least 1,000 points before you can withdraw and get free PayPal cash.
Click here to join American Consumer Opinion.
8. Survey Junkie
Survey Junkie is a paid online survey site where you can earn free PayPal cash for answering paid online surveys.
You can earn around $40 in free PayPal cash each month by completing around three short surveys each day.
You can redeem your points for free PayPal money starting at just $5 or 500 points.
Please click here to sign up for Survey Junkie.
9. Branded Surveys
Branded Surveys rewards you with points for answering survey questions. Surveys typically take 5 to 15 minutes and pay between $0.50 and $5.00 each. You can redeem these points for free PayPal cash.
You might have noticed there are several survey sites listed here. Companies pay you to answer questions because they want to improve their products and advertising. By understanding more about you, they can make better decisions. The best part is that these surveys are simple to answer, and you can join as many survey sites as you like.
You can click here to join Branded Surveys for free.
10. PrizeRebel
PrizeRebel is a website where you earn points by taking surveys, watching videos, and referring new members. You can redeem these points for free PayPal cash.
Just a few days ago I logged in to PrizeRebel, and I realized that I had enough points for around $150 in free PayPal cash. I redeemed them all at once, and now I have some nice extra spending money!
On PrizeRebel, you can get free $5 PayPal cash for 500 points. You can also choose any custom amount to redeem as well in PayPal cash.
Click here to sign up for PrizeRebel.
11. PayPal Honey
PayPal Honey is a free browser extension that automatically finds and applies coupon codes for you when you shop online. By using it, you earn points that you can redeem for extra money.
You can redeem your points for cash, gift cards, or free PayPal shopping credits.
Sign up for PayPal Honey by clicking here.
12. Rakuten
Rakuten lets you earn cash back on your everyday purchases from over 3,500 stores like Target, Walmart, Lululemon, Macy’s, Lowe’s, and Best Buy. When you make a purchase, you get a percentage of your spending back in cash.
When you shop through Rakuten, you get cash back as a percentage of what you spend. For example, if a store offers 5% cash back and you spend $200 there, you’d earn $10.00 in rewards in your Rakuten account.
You can receive your earnings via a check or PayPal once every quarter.
I have received over $1,000 in PayPal cash from Rakuten over the years. It’s a no-brainer if you want to easily save money when shopping online.
You can sign up for a free account on Rakuten here.
13. Find free PayPal money giveaways
If you’re looking to earn free PayPal money, entering sweepstakes and giveaways can be a fun way to try your luck. Companies host giveaways to attract new followers and keep existing followers and customers excited about their brand.
You can find free PayPal money giveaways by searching and/or following related hashtags on social media, such as #freepaypalmoney, #giveaway, #giveawayalert, and #freebie.
You can also follow online sweepstakes websites that list current giveaways.
Entering giveaways doesn’t guarantee free PayPal cash since they’re contests, but it’s quick and easy. I used to spend about an hour a week entering giveaways and have won gift cards and cash prizes.
14. Honeygain
The Honeygain app pays you up to $30 a month to share your internet connection with companies that use it as a tower.
You’re paid based on the amount of traffic that goes through your connection, earning $1 for every 10 GB of traffic.
Please click here to sign up for the Honeygain app.
15. Prime Opinion
If you want to learn how to get free money on PayPal, then Prime Opinion makes that possible with easy minimum threshold payout amounts to reach. You can get free PayPal cash starting at just 500 points, which is $5.
Prime Opinion is a survey website where you can earn money by sharing your opinions from home. They have lots of surveys available, and when I logged in recently, I had almost 50 surveys that I could take right away.
Please click here to join Prime Opinion and get up to a $5 free bonus.
16. Five Surveys
Five Surveys is a market research company that pays you to complete surveys. You just need to complete five surveys and then you can earn $5.
I signed up for Five Surveys myself to test it out for you. One thing I really like about Five Surveys is the number of available surveys. On the first day, there were 42 surveys I could start with, and more are being added all the time.
To withdraw from your Five Surveys account, just choose your preferred method. Options include PayPal cash, bank transfer, Venmo, and gift cards.
Please click here to sign up for Five Surveys.
17. Dosh
Dosh is a quick and simple app that automatically gives you cash back when you shop at certain stores like Costco, Sam’s Club, AT&T, American Eagle, and over 10,000 other companies.
Just link your debit or credit card (or even your Venmo or bank account) to the app, and everything else is handled for you. When you shop and pay with your linked card, you’ll automatically receive cash back into your Dosh account, which you can then transfer to your bank or PayPal account.
Once you accumulate $15 in your Dosh account (this is the minimum payout threshold), you can transfer it to your bank, PayPal, or Venmo. Alternatively, you can choose to donate your cash back to charity.
Recommended reading: 14 Best Apps To Scan Receipts for Money
Frequently Asked Questions
Below are answers to common questions about how to get free PayPal money.
How do I get money from PayPal for free?
You can earn free money on PayPal by completing online surveys, watching videos, selling your old stuff, and getting cash back when shopping online.
How do gamers receive PayPal funds by playing online games?
Apps like KashKick will pay you in points to play their online games. The points that you earn can then be redeemed for free PayPal funds straight in your personal PayPal account. YouTubers can also get paid to play online games and stream what they are doing.
What methods are available to secure a quick $10 on PayPal?
You can quickly earn $10 on PayPal by completing tasks such as taking surveys, reading emails, or shopping online through websites like Rakuten. These sites allow you to cash out once you reach a minimum amount. You can also become a freelancer on Fiverr and get paid in PayPal cash for hard or simple tasks. This wouldn’t be free money because you would have to work for it, but it is another option.
How do I check my PayPal balance?
To check your PayPal balance, you will have to log in to your PayPal account. Right after you log in, your PayPal balance will be listed for you to easily see.
Can you get PayPal money right away?
Some platforms may pay instant payouts to your PayPal account, while others may have a processing time or a minimum threshold before you can cash out. Always check the payout terms of the website or app you’re using to understand how and when you can access your earnings. Sometimes, it may take a couple of days before it lands in your personal PayPal account.
If you really need money right away, then another option may be to ask someone that you know for help or to ask for donations.
Best Ways To Get Free PayPal Money
I hope you enjoyed this article on how to get free money on PayPal.
Getting free PayPal money is great because it is just like extra cash. You can pay for your online purchases with it at almost all stores, and PayPal also has the PayPal Debit Card (so, this is kind of like getting a free PayPal gift card), so that you can buy things in-store too. Or you can also transfer it to your bank account and withdraw it just like cash.
Now, there are PayPal cash scams out there, so I do recommend that you be careful. If you are ever suspicious, do as much research as you can.
I have personally used many of the sites above and have earned well over $1,000 in free PayPal money over the years for doing things just in my spare time.
Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate mortgages to write unbiased product reviews.
We may get some more clarity on how mortgage rates will trend this year when the Bureau of Labor Statistics releases April’s Consumer Price Index data on Wednesday.
Over the last week, 30-year mortgage rates have hovered in the upper 6% range, according to Zillow data. But if this latest inflation report shows that prices rose faster than expected last month, rates could jump back up above 7%. Rates have been very sensitive to economic data this year, so however the report turns out, be prepared for rates to move up or down.
Most forecasters expect mortgage rates to go down this year, but they’re unlikely to fall until inflation slows further and the Federal Reserve starts lowering the federal funds rate.
According to the Federal Reserve Bank of Cleveland’s inflation nowcast, core CPI may show some signs of slowing in April’s report, which would be good news for mortgage rates.
Mortgage Rates Today
Mortgage type
Average rate today
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Mortgage Refinance Rates Today
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Average rate today
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Mortgage Calculator
Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.
Mortgage Calculator
$1,161 Your estimated monthly payment
Total paid$418,177
Principal paid$275,520
Interest paid$42,657
Paying a 25% higher down payment would save you $8,916.08 on interest charges
Lowering the interest rate by 1% would save you $51,562.03
Paying an additional $500 each month would reduce the loan length by 146 months
By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.
30-Year Fixed Mortgage Rates
The average 30-year fixed mortgage rate was 7.09% last week, according to Freddie Mac. This is 13 basis points lower than it was the week before.
The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.
The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you’ll have a higher rate than you would with shorter terms or adjustable rates.
15-Year Fixed Mortgage Rates
Average 15-year mortgage rates were 6.38% last week, according to Freddie Mac data, which is a nine-basis-point decrease from the previous week.
If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.
Are Mortgage Rates Going Down?
Mortgage rates increased throughout most of 2023. But mortgage rates are expected to trend down in the coming months and years.
In the last 12 months, the Consumer Price Index rose by 3.5%. As inflation comes down and the Federal Reserve is able to start cutting the federal funds rate, mortgage rates should fall further as well.
For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease. Check out some of our best HELOC lenders to start your search for the right loan for you.
A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.
Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans.
How Do Fed Rate Hikes Affect Mortgages?
The Fed aggressively raised the federal funds rate in 2022 and 2023 to slow economic growth and get inflation under control. As a result, mortgage rates spiked.
Mortgage rates aren’t directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy.
Now that the Fed has paused hiking rates, mortgage rates have come down a bit. Once the Fed starts cutting rates, which is likely to happen this year, mortgage rates should fall even further.
Newly increased loan limits for Title I Program supports the Biden-Harris Administration’s efforts to increase the supply and use of manufactured homes as an affordable housing source.
WASHINGTON – Today, the Federal Housing Administration (FHA) announced new loan limits for its Title I Manufactured Home Loan Program. The increased amounts use new methodologies for calculating and updating the program’s limits, which were announced in a final rule published on February 29, 2024. The increases better align with current market prices and are expected to encourage more lenders to offer the program to homebuyers seeking to purchase manufactured homes and the lots on which they sit. This is the first update to the Title I program loan limits since 2008 and supports the Biden-Harris Administration’s efforts to increase the supply and use of manufactured homes as an affordable housing source.
“We are using every tool possible to make affordable housing available for all Americans,” said HUD Secretary Marcia L. Fudge. “Today’s announcement is another positive step toward helping people to buy manufactured homes, an innovative solution to the affordable housing supply crisis.”
“Updating the Title I loan limits was the next critical piece in our ongoing efforts to make the Title I Manufactured Home Loan Program work for lenders and homebuyers for whom manufactured housing offers an affordable way to meet their housing needs,” said Federal Housing Commissioner Julia R. Gordon. “We hope these changes will prompt more lenders to consider using the Title I program to meet the financing needs of consumers purchasing or refinancing manufactured homes.”
Effective for FHA case numbers assigned on or after March 29, 2024, the new nationwide Title I Manufactured Home Loan Program loan limits are as follows:
Combination Loan (Single-section), $148,909
Combination Loan (Multi-section), $237,096
Manufactured Home Loan (Single-section), $105,532
Manufactured Home Loan (Multi-section), $193,719
Manufactured Home Lot Loan, $43,377
FHA will recalculate the program’s loan limits on an annual basis so that they keep pace with home price changes over time.
Last month, HUD announced a first-of-its-kind $225 million funding opportunity to support the affordability of manufactured homes and communities.
High home prices and rates sent home sellers and buyers to the sidelines in April and the start of May. But last week’s encouraging economic news drove mortgage rates down a bit, which could bring back prospective sellers and house hunters.
The median U.S. monthly housing payment hit an all-time high of $2,894 during the four weeks ending May 5, up 14% from a year earlier, and home prices rose 4.5% to their own record high.
The supply of homes for sale lost momentum, with prospective sellers jittery about high rates. New listings rose 9% year over year, the smallest increase in three months (with the exception of the four weeks ending March 31, when there was an artificially small decline due to Easter.) There were fewer new listings during the four-week period ending May 5 than any comparable period on record except 2020 and 2023. Many would-be sellers backed off when rates rose throughout April, opting to stay put to hold onto their low mortgage rate.
Home sales fell due to high rates and low supply. Pending home sales dropped 3% from a year earlier–the biggest decline in two months. There are also signs that competition for homes is slowing during a time of year when it typically speeds up: 30% of homes sold above asking price, flat from a week earlier and down from 32% a year earlier and more than 50% two years earlier. And 6.2% of home sellers dropped their asking price, the highest share since November and up from 4.3% a year ago. But there is one signal that demand is starting to pick up: Mortgage-purchase applications increased 2% week over week.
Recent economic news brought rates down from their peak. Encouraging economic news pushed daily average mortgage rates down from a five-month high of 7.5% on April 30 to about 7.2% at the end of last week and into this week, bringing buyers a modicum of relief. The Fed held interest rates steady and kept open the possibility of a rate cut later this year at their May 1 meeting, and last Friday’s soft jobs report was another step in the right direction.
“The market is a mixed bag, with high mortgage rates causing some listings to sit longer than I would expect in the springtime and high prices holding steady,” said David Palmer, a Redfin Premier agent in Seattle. “Sellers can rest assured that there are plenty of motivated buyers who are jumping into the market now; they finally understand that rates aren’t going to plummet anytime soon. Those buyers are the people who are moving because they need to: They’re relocating for a new job, going through a divorce, or growing their family. So even though some of my listings are taking longer to sell than they would in a typical spring market, they are selling eventually.”
For Redfin economists’ takes on the housing market, including more on how current financial events are impacting mortgage rates, please visit Redfin’s “From Our Economists” page.
Leading indicators
Indicators of homebuying demand and activity
Value (if applicable)
Recent change
Year-over-year change
Source
Daily average 30-year fixed mortgage rate
7.2% (May 8)
Down from a 5-month high of 7.52% two weeks earlier
Increased 2% from a week earlier (as of week ending May 3)
Down 17%
Mortgage Bankers Association
Redfin Homebuyer Demand Index (seasonally adjusted)
Down 6% from a month earlier (as of week ending May 5)
Down 12%
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents
Touring activity
Up 32% from the start of the year (as of May 7)
At this time last year, it was up 27% from the start of 2023
ShowingTime, a home touring technology company
Google searches for “home for sale”
Essentially unchanged from a month earlier (as of May 5)
Down 18%
Google Trends
Key housing-market data
U.S. highlights: Four weeks ending May 5, 2024
Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision.
Four weeks ending May 5, 2024
Year-over-year change
Notes
Median sale price
$384,721
4.5%
All-time high
Median asking price
$419,519
6.5%
All-time high
Median monthly mortgage payment
$2,894 at a 7.22% mortgage rate
14.1%
All-time high
Pending sales
90,542
-3%
Tied with the 2 previous 4-week periods for the biggest decline in 2 months
New listings
102,449
9.3%
Smallest increase since 4 weeks ending Feb. 11, with the exception of a 6.6% increase during the 4 weeks ending March 31 (that uptick was artificially small because of the Easter holiday)
Active listings
877,829
13.3%
Months of supply
3.2 months
+0.5 pts.
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions.
Share of homes off market in two weeks
44.9%
Down from 47%
Median days on market
34
+1 day
Share of homes sold above list price
30.4%
Down from 32%
Share of homes with a price drop
6.2%
+1.9 pts.
Average sale-to-list price ratio
99.4%
+0.1 pt.
Metro-level highlights: Four weeks ending May 5, 2024
Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy.
Metros with biggest year-over-year increases
Metros with biggest year-over-year decreases
Notes
Median sale price
Anaheim, CA (21%)
West Palm Beach, FL (15.9%)
Detroit (15.7%)
San Jose, CA (13.2%)
New Brunswick, NJ (12.8%)
San Antonio, TX (-1.9%)
Declined in just 1 metro
Pending sales
San Jose, CA (21.9%)
Anaheim, CA (9.1%)
Oakland, CA (6.1%)
San Francisco (6.1%)
Seattle (5.9%)
Phoenix (-13%)
Atlanta (-11.7%)
Houston (-11.1%)
Jacksonville, FL (-10.3%)
Orlando, FL (-10.2%)
Increased in 15 metros
New listings
San Jose, CA (35.6%)
Phoenix (25.9%)
Seattle (22.4%)
San Diego, CA (21.5%)
Oakland, CA (21.1%)
Chicago (-9%)
Newark, NJ (-4.3%)
Warren, MI (-3.9%)
Atlanta (-3%)
Detroit (-2.5%)
Providence, RI (-1.5%)
Declined in 6 metros
Refer to our metrics definition page for explanations of all the metrics used in this report.
Traditionally speaking, the spreads between the 10-year and mortgage rates is 1.60%-1.80%. Right now, the difference between them is 2.60%. However, compare that to the worst levels last year, when the spread got as high as 3.10%. That’s a 0.50% difference in rates.
For the rest of the year, it’s all about the labor market. The bond market has tried three times to front-run a recession or weaker economic data by pushing long-term yields lower, only to be rebuffed by labor data not breaking. So, keep an eye on weekly jobless claims data, and all the jobs report reports that come out at the end of the month. You can find the latest update on that data line here.
Purchase application data
Purchase application data was positive week to week but still down year over year. We are seeing better positive sales growth on our weekly pending sales data. This can be partly due to a higher percentage of cash buyers in the sales mix that purchase applicatoins won’t account for. Also, purchase application data can be a funky data line to sometimes track the percentage. I will talk about this on the HousingWire Daily podcast on Monday.
Since November 2023, when mortgage rates started to fall, we have had 12 positive prints versus nine negative prints and two flat prints week-to-week. Year to date, we have had six positive prints, ninenegative prints and two flat prints.
Weekly housing inventory data
Last week was another week that missed my inventory growth model with higher rates. I am always looking for weekly inventory growth between 11,000 and 17,000 when rates are over 7.25%. Rates have fallen recently and inventory growth was higher last week than the previous week. However, I anticipated a bit more kick than the increased inventory of 8,727 that we got. So, we shall see how next week looks. Let’s remember, it’s Mother’s Day weekend this weekend. Next week, inventory should surpass the highest levels we saw last year.
Weekly inventory change (May 3-May 10): Inventory rose fro559,744 to 568,471
The same week last year (May 5-May 12): Inventory rose from 420,489 to 421,101
The all-time inventory bottom was in 2022 at 240,194
The inventory peak for 2023 was 569,898
For some context, active listings for this week in 2015 were 1,109,727
New listings data
One of the most encouraging housing developments for 2024 — in stark contrast to 2023 — is the year-over-year growth in new listings. This is a significant shift, considering 2023 marked the lowest level ever recorded. The fact that this data line is now positive is a very promising sign for the housing market. While the growth rate is slightly lower than anticipated for this year, it’s still a step in the right direction. Despite a decline in the past week, we are maintaining positive year-over-year growth.
Here’s the new listings data for last week over the last several years:
2024: 68,843
2023: 61,911
2022: 73,107
Price-cut percentage
In an average year, one-third of all homes take a price cut — this is standard housing activity. When mortgage rates increase, demand falls, and the price-cut percentage grows. When rates drop and demand improves, the percentage falls.
The percentage of price cuts is growing year over year as inventory is growing. The slope of the curve in 2024 is much slower than we saw in 2022. In 2022, we saw real price declines in the second half of the year as home sales were crashing. They’re not crashing anymore so the action with the price cut percentage data is a bit slower than at that time, but growing year over year
2024: 33.7%
2023: 30%
2022: 21%
The week ahead: Inflation week and housing starts
It’s that time again: it’s another inflation week with CPI and PPI inflation reports. Of course, some of the inflation reports have disappointed the Federal Reserve, so we will keep a close eye on the key numbers in these reports. We also have housing starts data, which is key to the labor markets as 5-unit permits have been in a recession for some time now. I want to see what the apartment completion data looks like because labor is at risk once those apartments under construction are completed. Since we focus so much on the labor data and the direction of mortgage rates, tracking construction workers in each economic cycle is essential.