In February 2020, Tenisha Tate-Austin and Paul Austin decided to erase all traces of their existence in the Northern California home the Black couple had created for themselves and their children.
They “whitewashed” their home by removing their family photographs and African art displayed around the house. They had a white friend place some of her own family photographs around the home and greet the appraiser as if she were the homeowner.
The couple wanted to see if they’d get a better home appraisal than the one they had received three weeks earlier.
The experiment worked. This time, the appraisal (by a different appraiser from the same appraisal management firm) was almost 50% higher. In three weeks, the value of their Marin City home, 11 miles north of San Francisco, had gone from $995,000 to $1,482,500.
In March, the Austins settled a fair housing lawsuit alleging race discrimination against the licensed real estate appraiser; they’d reached a settlement in October with the appraisal management company.
Sixty years after Martin Luther King Jr. delivered his most iconic speech calling for civil and economic rights and an end to racism, one of the biggest roadblocks to building wealth for Black Americans is still in place: The housing gap has widened from the time it was legal to discriminate based on race.
In 1960, eight years before the Fair Housing Act, which prohibits property owners, financial institutions and landlords from discriminating based on race, the homeownership gap between white (65%) and Black (38%) stood at 27 percentage points. In 2021, or 60 years later, that gap had grown: 73% of white households owned a home compared with Black homeownership at 44%, a difference of 29 percentage points, according to the Urban Institute.
“We missed out on a better interest rate because of the unfair appraisal we received,” Tenisha Tate-Austin said in statement through her lawyer. “Having to erase our identity to get a better appraisal was a wrenching experience. We know of other Black families who either couldn’t get a loan because of a discriminatory appraisal and therefore either lost the opportunity to buy or sell a home, or they had to sell their home because they had an unaffordable loan.”
Explore the series:MLK’s ‘I have a dream’ speech looms large 60 years later
Housing gap:‘We are a broken people’: The importance of Black homeownership and why the wealth gap is widening
King fought racist housing practices in ChicagoThough King knew housing was an important topic when he made his 1963 speech (it included the line “We cannot be satisfied as long as the Negro’s basic mobility is from a smaller ghetto to a larger one,” his focus was ending segregation in the South, said Beryl Satter, professor of history at Rutgers University in New Jersey and author of “Family Properties: Race, Real Estate, and the Exploitation of Black Urban America.”“The speech was about jobs and ending segregation of drinking fountains and restaurants, buses, trains, movie theaters and swimming pools to help pass the Civil Rights Act,” she said. Once that was accomplished, King trained his sights on housing in the North, particularly Chicago, where he focused on enforcing a pre-existing law on open housing, Satter said.The open housing laws in Chicago already forbade real estate agents from steering Black families into Black neighborhoods and dictated that housing should be made available regardless of race.“But like many such open housing laws, it was not enforced,” Satter said.In January 1966, King moved with his family into an apartment in North Lawndale on the West Side of Chicago to bring attention to the poor living conditions of Black families living without water, electricity and heat. He marched with Black and white supporters into segregated white neighborhoods to call for open housing.“And there he was met with the most violence he had ever been met with in any of his civil rights struggles. He said that the violence in Chicago made the whites in Mississippi look good,” Satter said. “He was hit with a stone while marching in Chicago, and he kept going.”Fair Housing Act became law after King’s deathFrom 1966 to 1967, Congress regularly considered a fair-housing bill, but it was ultimately defeated.“It was the first time that a Civil Rights Act had been defeated since the ’50s,” Satter said. “There was massive white resistance to any law or direct action that threatened racial segregation and housing. It was something that whites in the North fought to the death to keep.”After King was assassinated in 1968, President Lyndon Johnson pushed through the national Fair Housing Act as a memorial to King, whose name had become closely associated with the fair housing legislation.The undervaluation of homes in Black neighborhoods, decadeslong housing segregation, a systemic denial of loans or insurance in predominantly minority areas, a persistent income gap, and a historically limited ability of Black parents to leave their families an inheritance have contributed to the nation’s financial disparity, experts say.
During the housing boom of the early 2000s, Black Americans ages 45 to 75 disproportionately held subprime mortgages, loans offered at higher interest rates to borrowers characterized as having tarnished credit histories. Many of these mortgage holders lost their homes and have been unable to return to homeownership.
These trends will affect retirement prospects for Black Americans and their ability to pass down wealth to the next generation, making it not just one generation’s problems but an intergeneration disparity, experts say.
White wealth surpasses Black wealth
In 2016, white families posted the highest median family wealth at $171,000. Black families, in contrast, had a median family wealth of $17,600, according to the Federal Reserve. Homeownership has long been considered the best path to build long-term wealth, so increasing the rate of homeownership can play an important role in closing the wealth gap, experts say.
Over the past decade, the median-priced home in the United States gained $190,000 in value, making the typical homeowner 40 times wealthier than if they had remained a renter, according to a report released in April by the National Association of Realtors.
Some signs of hope emerged during the coronavirus pandemic, when mortgage rates were at historic lows.
During that time, Black homeownership rates increased by 2 percentage points, surpassing the white homeownership rate, which increased just 1 percentage point.
The historically low mortgage rates enabled high-earning, highly educated Black households to boost homeownership rates. Most high-income white households already were homeowners, which explains the smaller magnitude of growth, according to the analysis.
Black homeownership rate saw small improvements
From 2019 to 2021, the homeownership rate for Black households went from 42% to 44%; for white households it went from 72% to 73%.
After experiencing a continuous decline since the Great Recession, the Black homeownership rate finally made gains between 2019 and 2021. The reason was pent-up demand, said Jung Choi, a researcher at the Urban Institute.
“This suggests that affordability really matters,” Choi said. “Now, with the surge in interest rates, we are already seeing a sharp decline in Black homebuyers as well as younger homebuyers.”
Satter said King’s final book, 1967’s “Where Do We Go From Here: Chaos or Community?” cautions against complacency simply because there are laws on the books.
“He really understood that having a law in books was the beginning, not the end. Today we have the Fair Housing Act of 1968, and there are ongoing local, state and national laws that are supposed to stop housing discrimination,” Satter said. “I think King would have predicted that they would not be effective if there wasn’t a larger public will to enforce it and a strong political organization pushing to enforce it.”
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here.
Robo-advisors have barely been around for 10 years, but in the past couple of years several have been steadily expanding their investment menus, and even offering valuable add-on services. One of the leaders in this regard is Wealthfront. The robo-advisor has been growing its investment capability in every direction but is now even offering financial planning. The platform now bills itself as offering High-Interest Cash, Financial Planning & Robo-Investing for Millennials. If you’re looking for more than just investing, Wealthfront has it. And as has become their trademark, it’s all available at a low cost.
What is Wealthfront?
Based in Palo Alto, California, and founded in 2011, Wealthfront has about $25 billion in assets under management. It’s the second-largest independent robo-advisor, after Betterment. And while dozens of robo-advisors have arrived in recent years, Wealthfront stands out as one of the very best. There isn’t any one thing Wealthfront does especially well, but many. And they’re adding to their menu of services all the time.
Their primary business of course is automated online investing. You can open an account with as little as $500, and the platform will design a portfolio for you, then manage it continuously. Your money will be invested in a globally diversified portfolio of ETFs–just like most other robo-advisors. But Wealthfront takes it a step further, and also adds real estate and natural resources.
Like other robo-advisors, Wealthfront uses Modern Portfolio Theory (MPT) in the creation of portfolios. They first determine your investment goals, time horizon, and risk tolerance, then build a portfolio designed to work within those parameters. MPT emphasizes proper asset allocation to both maximize returns, and minimize losses.
But in a major departure from other robo-advisors, Wealthfront now offers the ability to customize your portfolio and get access to a variety of investment methodologies and portfolios, including Smart Beta, Risk Parity and Stock-Level Tax-Loss Harvesting. And more recently, they’ve also stepped into the financial planning arena. They now offer several financial planning packages, customized to very specific needs, including retirement planning and college planning.
If you haven’t checked out Wealthfront in the past year or so, you definitely need to give it a second look. This is a robo-advisor platform where things are happening–fast!
How Wealthfront Works
When you sign up with Wealthfront, they first have you complete a questionnaire. Your answers will determine your investment goals, time horizon, and risk tolerance. A portfolio invested in multiple asset classes will be constructed, with an exchange-traded fund (ETF) representing each.
The advantage of ETFs is that they are low-cost, and enable the platform to expose your portfolio to literally hundreds of different companies in each asset class. With your portfolio invested in multiple asset classes, it will literally contain the stocks and bonds of thousands of companies and institutions, both here in the U.S. and abroad.
Wealthfront offers tax-loss harvesting on all portfolio levels. But they’ve also added portfolio options for larger investors, that include stocks as well as ETFs. The inclusion of stocks gives Wealthfront the ability to be more precise and aggressive with tax-loss harvesting.
Each portfolio also comes with periodic rebalancing, to maintain target asset allocations, as well as automatic dividend reinvestment. As is typical with robo-advisors, all you need to do is fund your account–Wealthfront handles 100% of the investment management for you.
More recently, Wealthfront has also added external account support. The platform can now incorporate investment accounts that are not directly managed by the robo-advisor. This will provide a high-altitude view of your entire financial situation, helping you explore what’s possible and providing guidance to optimize your finances.
And much like many large investment brokers, Wealthfront now offers a portfolio line of credit. It’s available only to investors with $25,000 or more in a taxable account, but if you qualify you can borrow money against your investment account and set your own repayment terms in the process
Wealthfront Features and Benefits
Minimum initial investment: $500
Account types offered: Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and 529 college accounts
Account access: Available in web and mobile apps. Compatible with Android devices (5.0 and up), and available for download at Google Play. Also compatible with iOS (11.0 and later) devices at The App Store. Compatible with iPhone, iPad and iPod touch devices.
Account custodian: Account funds are held in a brokerage account in your name through Wealthfront Brokerage Corporation, which has partnered with RBC Correspondent Services for clearing functions, such as trade settlement. IRA accounts are held with Forge Trust.
Customer service: Available by phone and email, Monday through Friday, from 7:00 AM to 5:00 PM, Pacific time.
Wealthfront security: Your funds invested with Wealthfront are covered by SIPC, which insures your account against broker failure for up to $500,000 in cash and securities, including up to $250,000 in cash.
Wealthfront uses third-party providers to maintain secure, read-only links to your account. The providers specialize in tracking financial data, as well as employ robust, bank-grade security, and in general, they follow data protection best practices. In addition, Wealthfront does not store your account password.
Wealthfront Investment Methodology
For regular investment accounts, Wealthfront constructs portfolios from a combination of 10 different specific asset classes. This includes four stock funds, four bond funds, a real estate fund, and a natural resources fund.
Each portfolio will contain various allocations of each asset class, based on your investor profile as determined by your answers to the questionnaire. The one exception is municipal bonds. That allocation will appear only in taxable accounts. IRAs don’t include them since the accounts are already tax-sheltered.
Notice in the table below that most asset classes have two ETFs listed. This is part of Wealthfront’s tax-loss harvesting strategy. In each case, the two ETFs are very similar. To facilitate tax-loss harvesting, one fund position will be sold, then the second will be purchased at least 30 days later, to restore the asset class. (We’ll cover tax-loss harvesting in a bit more detail a little further down.)
The ETFs used for each asset class are as follows, as of December 29, 2018:
Specific Asset ClassGeneral Asset ClassPrimary ETFSecondary ETF
US Stocks
Stocks
Vanguard CRSP US Total Market Index (VTI)
Schwab DJ Broad US Market (SCHB)
Foreign Stocks
Stocks
Vanguard FTSE Developed All Cap ex-US Index (VEA)
Schwab FTSE Dev ex-US (SCHF)
Emerging Markets
Stocks
Vanguard FTSE Emerging Markets All Cap China A Inclusion Index (VWO)
iShares MSCI EM (IEMG)
Real Estate
Real Estate
Vanguard MSCI US REIT (VNQ)
Schwab DJ REIT (SCHH)
Natural Resources
Natural Resources
State Street S&P Energy Select Sector Index (XLE)
Vanguard MSCI Energy (VDE)
US Government Bonds
Bonds
Vanguard Barclays Aggregate Bonds (BND)
Vanguard Barclays 5-10 Gov/Credit (BIV)
TIPS
Bonds
Schwab Barclays Capital US TIPS (SCHP)
Vanguard Barclays Capital US TIPS 0-5 Years (VTIP)
Municipal Bonds (taxable accounts only)
Bonds
Vanguard S&P National Municipal (VTEB)
State Street Barclays Capital Municipal (TFI)
Dividend Stocks
Bonds
Vanguard Dividend Achievers Select (VIG)
Schwab Dow Jones US Dividend 100 (SCHD)
Wealthfront’s historical returns are as follows (through 1/31/2019). But keep in mind these numbers are general. Since the portfolios designed for each investor are unique, your returns will vary.
Specialized Wealthfront Portfolios
As mentioned in the introduction, Wealthfront has rolled out several different investment options, in addition to its regular robo-advisor portfolios. Each represents a specific, and generally more specialized investment strategy, and is typically available to those with larger investment accounts.
Smart Beta: You’ll need at least $500,000 to be eligible for this portfolio. Smart beta departs from traditional index-based investing, which relies on market capitalization. For example, since Apple is one of the most highly capitalized S&P 500 stocks, it has a disproportionate weight in strict S&P 500 index funds. In a smart beta portfolio, the position in Apple will be reduced based on other factors.
In general, under smart beta, the weighing of stocks in the fund uses a variety of factors that are less dependent on market capitalization. There’s some evidence this investment methodology produces higher returns. This portfolio is available at no additional fee.
Wealthfront Risk Parity Fund: This is actually a mutual fund–the first offered by Wealthfront. It involves the use of leverage with some positions within the portfolio. It attempts to achieve higher long-term returns by equalizing the risk contributions of each asset class. It’s based on the Bridgewater Hedge Fund, and requires a minimum of $100,000, with an additional annual fee of 0.25% (0.50% total). This is the only Wealthfront portfolio that charges a fee over and above the regular advisory fee.
Socially responsible investing (SRI): Wealthfront just recently began to offer a specific SRI portfolio option. Once you sign up, you’ll be able to customize your portfolio and add socially responsible ETFs.
Sector-specific ETFs: If you want to invest in a particular portion of the market, such as technology or healthcare, Wealthfront gives you the option to build a portfolio that focuses on certain industries to portions of the stock market.
Customized Wealthfront Portfolios:
Wealthfront also lets investors build their own portfolios, which is somewhat uncommon among robo-advisors.
Most robo-advisors will build your portfolio automatically based on your risk tolerance and goals. If you like that service, Wealthfront can do it. However, more hands-on investors are free to make tweaks to the automatically designed portfolio by adding or removing ETFs.
You can also build a portfolio entirely from scratch if you’d rather. You can choose which ETFs to invest in and how much you want to invest in them. You can then let Wealthfront handle things like rebalancing and tax-loss harvesting while maintaining the portfolio you desire.
Wealthfront Tax-loss Harvesting
If there’s one investment category where Wealthfront stands above other robo-advisors, it’s tax-loss harvesting. Not only do they offer it on all regular taxable accounts (but not IRAs, since they’re already tax-sheltered), but they also offer specialized portfolios that take it to an even higher degree.
Wealthfront starts with a tax location strategy. That involves holding interest and dividend-earning asset classes in IRA accounts, where the predictable returns will be sheltered from income tax. Capital appreciation assets, like stocks, are held in taxable accounts, where they can get the benefit of lower long-term capital gains tax rates.
But for larger portfolios, Wealthfront offers Stock-level Tax-Loss Harvesting. Three specialized portfolios are available, using a mix of both ETFs and individual stocks. The purpose of the stocks is to provide more specific tax-loss harvesting opportunities. For example, it may be more advantageous to sell a handful of stocks to generate tax losses, than to close out an entire ETF.
Given that Wealthfront puts such heavy emphasis on tax-loss harvesting, it’s not surprising they’ve published one of the most respected white papers on the subject on the internet. If you want to know more about this topic, it’s well worth a read. The paper concludes that tax-loss harvesting can significantly increase the return on investment of a typical portfolio.
US Direct Indexing
US Direct Indexing is an enhanced level of tax-loss harvesting that Wealthfront offers to people with account balances exceeding $100,000.
Instead of building a portfolio of ETFs, Wealthfront will use your money to directly purchase shares in 100, 500, or 1,000 US companies. By buying shares in so many companies, Wealthfront can emulate an index fund in your portfolio while owning individual shares in the businesses.
Owning individual shares in hundreds of companies makes tax-loss harvesting easier as it lets Wealthfront’s algorithm trade based on movements in individual stocks rather than in funds. This can increase the number of tax losses that Wealthfront harvests each year, reducing your income tax bill.
Other Wealthfront Features
Wealthfront Cash Account
Wealthfront offers acash account where you can safely and securely store your money for anything–emergencies, a down payment for a home, or to later invest. By working with what they call Program Banks, Wealthfront has quadrupled the normal FDIC insurance on this account, so you’re protected for up to $5 million.
There’s also no market risk since it’s not an investment account and the money isn’t being invested anywhere. You can make as many transfers in and out of the account as you’d like, and it only takes $1 to start.
So what’s the catch?
There really isn’t one. Wealthfront will skim a little off the top to make some money before giving you an industry-leading 4.30% APY, but other than that, you’re just giving them more financial data. Since we’re doing this all the time with technology anyway, it shouldn’t make that big of a difference.
I see no downside, especially if you’re already a client of Wealthfront.
They’re really making a play to be your all-in-one financial services provider, too.
A new feature, just launched, is the ability to use your cash account as a checking account. This includes the ability to access your paycheck up to two days early when you set up a direct deposit. Additionally, you can invest in the market within minutes using your Wealthfront Cash account. Put the two together and you give yourself the ability to invest more than 100 days more in the market. The account also allows you to auto-pay bills and use apps like Venmo and PayPal to send money to friends or family. Account-holders also get a debit card to make purchases and get cash from ATMs. And you can use the account to organize your cash into savings buckets – like an emergency fund, down payment on a house, or other large purchase – and use Wealthfront’s Self-Driving Money offering to automate your savings into those buckets.
If you have cash that’s getting rusty in a traditional bank account and you want to earn more, the Wealthfront Cash Accountis a great place to keep it.
Read more about the cash account in our Wealthfront Cash Account full review.
Wealthfront Portfolio Line of Credit
This feature is available if you have at least $25,000 in your Wealthfront account. It allows you to borrow up to 30% of your account value, and currently charges interest rates between 3.15% and 4.40% APR depending on account size. You can make repayments on your own timetable, since you’re essentially borrowing from yourself. And since the credit line is secured by your account, you don’t need to credit qualify to access it.
Wealthfront Free Financial Planning
This is Wealthfront’s entry into financial planning. But like everything else with Wealthfront, this is an automated service. There are no in-person meetings or phone calls with a certified financial planner. Instead, technology is used to help you explore your financial goals, and to provide guidance to help you reach them. And since the service is technology-based, there is no fee for using it.
The service can be used to help you plan for homeownership, college, early retirement, or even to help you plan to take some time off to travel, like an entire year!
Simply choose your financial objective, enter your financial information, and Wealthfront will direct you on how to plan and prepare.
Self-Driving Money
One of the biggest and largely unrecognized obstacles for most investors is something known as cash drag. That’s when you have too much of your portfolio sitting in cash, which may earn interest, but it doesn’t provide the investment returns you can get in a diversified investment portfolio.
Wealthfront has addressed the cash drag dilemma with their newly released Self-Driving Money features. It’s a free service offered by the robo-advisor that essentially automates your savings strategy. It does this by automatically moving excess cash to help meet your goals, including into investment accounts where it will earn higher returns. And in the process, it eliminates the need to make manual cash transfers, and the judgment needed to decide exactly when to make that happen.
Our vision of Self-Driving Money is going to be a complete game-changer for people’s finances, said Chris Hutchins, Head of Financial Automation at Wealthfront. We want to completely remove the burden of managing your money so you can focus on your career, your family or whatever is most important to you.
You can take advantage of Self-Driving Money from the Wealthfront Cash Account. You’ll set a maximum balance for the connected account, which should be an amount that’s more than you expect to spend or withdraw on a monthly basis.
How It Works
When Wealthfront determines you’re over your maximum balance by at least $100 it will schedule an automatic transfer of the excess cash based on your goals. For example, you can tell Wealthfront you want to save $10,000 in an emergency fund, then max out your Roth IRA, then put the rest toward saving for a down payment on a house. Once you set the strategy, Wealthfront will automate the rest.
And before it happens, you’ll receive an email alert, then always have 24 hours to cancel the transfer if you need to cover unexpected expenses. You’ll also be able to turn on and off your Self-Driving Money plan at any time.
It’s usually possible to set up automated transfers from external accounts into most investment accounts. But what sets Wealthfront apart is the fact that it will make those transfers automatically. They will make sure you always have enough cash to pay your bills, then automatically transfer any excess into your savings buckets or investment accounts to improve the return on your money.
The strategy is designed to optimize your money across spending, savings, and investments, and to make it all flow with no effort on your part. You can simply have your paycheck direct deposited into your external checking account or Wealthfront Cash Account, cover your expected monthly spending, then have excess funds automatically transferred into the Wealthfront account of your choice.
By delivering on its Self-Driving Money vision, Wealthfront is taking the robo-advisor concept to a whole new level. Not only do you not need to concern yourself with managing your investments, but now even funding those investments will happen automatically. The result will be near complete freedom from the financial stresses that plague so many individuals.
Wealthfront Fees
Wealthfront has a single fee structure of just 0.25% per year for their advisory fee. That means you can have a $100,000 portfolio managed for just $250, or only a little bit more than $20 per month.
The one exception is the Wealthfront Risk Parity Fund, which has a total fee of 0.50% per year.
How to Sign Up with Wealthfront
To open an account with Wealthfront, you’ll need to be at least 18 years old, and a U.S. citizen.
You’ll need to provide the following information:
Your name
Address
Email address
Social Security number
Date of birth
Citizenship/residency status
Employment status
As is the case with all investment accounts, you’ll also be required to supply documentation verifying your identity. This is usually accomplished by supplying a driver’s license or other state-issued identification.
As mentioned earlier, you complete a questionnaire that will be used to determine your investment goals, time horizon, and risk tolerance. Your portfolio will be based on your answers to that questionnaire, and will be presented to you upon completion of the questionnaire.
For funding, you can use ACH transfers from a linked bank account. You will also have the option to schedule recurring deposits, on a weekly, biweekly, or monthly basis. The platform can even enable you to set up dollar-cost averaging deposits.
If you already have a brokerage account with another company, Wealthfront makes it easy to transfer your funds to your new account. If you’re invested in ETFs that Wealthfront supports, Wealthfront will assist with an in-kind transfer.
That means that you won’t have to sell your shares before transferring funds, which lets you avoid capital gains taxes that would be triggered by a sale.
Wealthfront Alternatives
Wealthfront’s closest competitor, and the robo-advisor that offers the most comparable services, is Betterment. They also have an annual advisory fee of 0.25%, but require no minimum initial investment. That could make it the perfect robo-advisor for someone with no money, who plans to fund their account with monthly deposits. Read the full Betterment review here.
Related: Wealthfront vs. Betterment
Another alternative is M1. Also a robo-advisor, M1 enables you to invest your money in what they call “pies”. These are miniature investment portfolios comprised of both stocks and ETFs. You can invest in existing pies, or create and populate pies of your own design. Once you invest in one or more pies, the platform will automatically manage it going forward. What’s more, M1 is free to use. Read more about M1 here.
Related: Wealthfront vs. Vanguard
Read More: The Best Robo Advisors – Find out which one matches your investment needs.
Wealthfront Pros and Cons
Investment options: Wealthfront offers more investment options than just about any other robo-advisor, particularly for investors with at least $100,000.
Reasonably priced: The annual fee of 0.25% is extremely reasonable, especially when you consider the degree of sophistication offered by Wealthfront’s investment methodology.
Tax-loss harvesting: This is available on all accounts, and Wealthfront is probably better at this investment strategy than any other robo-advisor.
Portfolio credit line: Gives you the ability to borrow against your portfolio with ease, and represents a form of margin investing.
Financial planning feature: The financial planning service is free to use and is available to all investors.
Limited access for smaller investors: Some of the more advanced investment portfolios and services are available only to investors with $100,000 or more to invest.
$500 minimum initial investment: It’s a minor issue, though some competitors require no funds to open an account.
FAQs
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Should You Sign Up for Wealthfront?
In a word, absolutely! Wealthfront is one of the very top robo-advisors, and you can’t go wrong with this one. Not only do they offer far more services than most other robo-advisors, but they also allow you to grow along the way. For example, as your account increases in value, you can take advantage of more sophisticated investment strategies, including advanced tax-loss harvesting.
That Wealthfront offers its portfolio line of credit and free financial planning services only makes the platform a bit more attractive, But the real benefit is the actual investment service. Wealthfront’s investment service comes extremely close to that of traditional human investment advisors, but at only a fraction of the annual cost.
Are you looking to transform your living room into a stylish, personalized space? With Wayfair’s innovative AI tool, Decorify, you can now visualize and redesign your room with just a few clicks. Decorify utilizes generative AI technology to provide endless inspiration and furniture recommendations, all tailored to your specific style preferences. This article will explore how Decorify works, its unique features, and how it sets itself apart from other AI-powered home decor tools.
Decorify is Wayfair’s latest venture into the world of AI-powered home decor tools. Unlike augmented reality shopping apps, Decorify doesn’t rely on rendering existing furniture within your actual room. Instead, it leverages AI models to create new imagery that showcases your room in a redecorated style of your choice.
Uploading a picture of your room and select a visual style
With Decorify, you can start by uploading a picture of your room and selecting a visual style from a variety of options, ranging from well-defined styles like “mid-century modern” and “farmhouse” to more abstract choices like “bohemian” or “perfectly pink.” Once you’ve chosen your style, Decorify generates a redesigned version of your room, complete with furniture recommendations displayed alongside the AI-remodeled room.
How it works:
Upload Your Room Picture: Begin by uploading a picture of your room to the Decorify platform. Whether using a computer or your smartphone, Decorify supports both platforms, making it accessible to everyone.
Choose Your Visual Style: After uploading your room picture, select a visual style from the available options. Whether you prefer a classic mid-century modern vibe or a cozy farmhouse aesthetic, Decorify has a range of styles to suit your taste.
Explore AI-Remodeled Room: Decorify’s generative AI kicks into action once you’ve chosen your visual style. It transforms your room picture into an AI-remodeled version that reflects the selected style. You’ll see your room split in the middle, with the original image on one side and the AI-generated version on the other.
Furniture Recommendations: To the right of the AI-remodeled room, you’ll find a grid of furniture recommendations. These suggestions are carefully curated by Decorify’s computer vision model, trained on Wayfair’s extensive product catalog. Each recommendation complements your chosen visual style and elevates your room’s overall aesthetic.
Wayfair understands the importance of continuously improving and refining Decorify to provide an even better user experience. Shrenik Sadalgi, R&D director at Wayfair, shares that the company plans to fine-tune the AI model powering Decorify. This includes incorporating “proprietary branding data” to ensure a more accurate match between the AI-generated designs and Wayfair products. In the future, customers can start with a list of products and create a room around those furniture pieces.
By constantly enhancing Decorify’s capabilities, Wayfair aims to empower users to unleash their creativity and personalize their living spaces like never before. The fusion of AI technology and Wayfair’s extensive product offerings promises to revolutionize the home decor industry.
Wayfair leads the way with Decorify.
While Wayfair leads the way with Decorify, it is worth noting that other companies are also leveraging AI to assist in home-decorating visualization. HomeDesigns AI and VisualizeAI are two such examples. HomeDesigns AI offers a similar feature, albeit at a monthly cost, while VisualizeAI provides a broader range of style options compared to Decorify. However, Wayfair sets itself apart by offering Decorify as a free tool, making it accessible to a wider audience.
A quick Google search reveals numerous other apps and services that claim to provide similar AI-powered home decor solutions. However, many of these options come with a price tag. Decorify, on the other hand, provides a powerful tool without any additional cost, making it an attractive choice for those seeking to reimagine their living spaces on a budget.
The rise of AI-powered tools like Decorify showcases the growing personalization trend in the home decor industry. With the ability to visualize and experiment with different styles, homeowners can confidently embark on their interior design journeys. Whether you’re a fan of classic elegance or contemporary minimalism, Decorify’s AI technology opens up a world of possibilities, enabling you to curate a space that truly reflects your unique personality and taste.
As Wayfair continues to enhance, Decorify, and explore new AI and home decor frontiers, the future looks promising for homeowners seeking to transform their living spaces. With the power of AI at their fingertips, individuals can unleash their creativity, discover endless inspiration, and embark on a personalized home decor journey like never before.
First reported on The Verge
Frequently Asked Questions
Q. What is Decorify, and how does it work?
Decorify is an AI-powered home decor tool by Wayfair that allows users to visualize and redesign their living spaces. Users can upload a picture of their room and select a visual style from various options. The AI then generates a remodeled version of the room, showcasing furniture recommendations that complement the chosen style.
Q. How can I use Decorify?
Using Decorify is easy. Start by uploading a picture of your room and choose a visual style that suits your preferences. Decorify’s AI will then transform your space into the selected style, displaying furniture recommendations that match the remodeled room.
Q. What sets Decorify apart from other AI-powered home decor tools?
Decorify sets itself apart by not relying on augmented reality shopping apps and instead using generative AI to create new imagery of remodeled rooms. Additionally, Wayfair offers Decorify as a free tool, making it accessible to a broader audience.
Q. Are there other AI-powered home decor tools available?
Yes, other AI-powered home decor tools are available, such as HomeDesigns AI and VisualizeAI. However, some of these tools may come with a monthly cost, while Decorify by Wayfair is provided free of charge.
Q. What are the future plans for Decorify?
Wayfair plans to fine-tune the AI model powering Decorify by incorporating proprietary branding data for more accurate matches between AI-generated designs and Wayfair products. In the future, customers can start with a list of products and create a room around those furniture pieces.
Wayfair aims to continuously enhance Decorify’s capabilities to provide a better user experience and revolutionize the home decor industry.
Featured Image Credit: Phillip Goldsberry; Unsplash; Thank you!
Deanna Ritchie
Managing Editor at ReadWrite
Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.
A long-vacant retail storefront is coming back to life.
Christi Petersen is opening Seasoned Style at 824 W. 10th St., filling a first-floor space that years ago was The Willow Tree boutique and more recently was a tattoo shop.
“I really love the vintage vibe” of the building, she said. “That is my true love, and I want to show people how to use vintage pieces in a modern way.”
She has been running her business for a decade, supporting it through vendor events and as a co-owner of The Shoppe in Dell Rapids. The Sioux Falls store is a solo venture.
The plan is to be open the third Thursday, Friday and Saturday each month.
“Every month will be like a new shopping experience because I’ll have all new pieces, and it will be restyled every month so it will look different,” she said.
“Every month, I’ll have 20 pieces of furniture and tons of home decor, focusing on handmade items.”
She hand-pours soy candles and makes laser glow forge art “and just all sorts of crafty things,” she said.
Her first sales will be from 4 to 8 p.m. Aug. 17 and from 10 a.m. to 5 p.m. Aug. 18-19.
She estimates there will be cabinets, buffets, dressers, nightstands and other furniture available. She upcycles many of the pieces herself after sourcing items at estate sales, rummage sales, flea markets and online.
She occasionally will purchase pieces from individuals but doesn’t plan to offer consignment at the 1,100-square-foot store.
While an apartment upstairs is leased, the main floor has been vacant for at least five years, Petersen estimates.
She has repainted and made other improvements to the space in preparation for opening and said she’s excited about nearby improvements, including The Perch restaurant and home restorations.
“I used to live in that neighborhood about 15 years ago. I used to live a block away (from the store),” she said. “So I’m familiar with the neighborhood, and there are a lot of hidden gems in here.”
This can be good for flexibility in management, pass-through taxation, and limited personal liability. However, in some states, there is lack of LLC availability and self-employment taxes. 4. Secure startup funding (if required) You may have to determine whether you need to raise money to launch your mortgage company. Main sources of funding you may … [Read more…]
Over the past week, a few key mortgage rates increased. The average interest rates for 15-year fixed and 30-year fixed mortgages both grew. We also saw an increase in the average rate of 5/1 adjustable-rate mortgages.
As inflation surged in 2022, so too did mortgage rates. To rein in price growth, the Federal Reserve began bumping up its federal funds rate, a short-term interest rate that determines what banks charge each other to borrow money. By making it more expensive to borrow, the central bank’s goal is to reduce prices by curtailing consumer spending.
During its July 26 meeting, the Fed initiated a hike of 25 basis points (or 0.25%) to its federal funds rate, marking its 11th increase in the current rate-hiking cycle. The most recent increase could have an impact on mortgage rates, but experts say the markets may have already factored it into rates.
Current mortgage rates for August 2023
Mortgage rates change every day. Experts recommend shopping around to make sure you’re getting the lowest rate. By entering your information below, you can get a custom quote from one of CNET’s partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.
“Mortgage rates will continue to ebb and flow week to week, but ultimately, I think rates will stick to that 6% to 7% range we’re seeing now,” said Jacob Channel, senior economist at loan marketplace LendingTree.
The Fed doesn’t set mortgage rates directly, but it does play an influential role. Mortgage rates move around on a daily basis in response to a range of economic factors, including inflation, employment and the broader outlook for the economy. A lower inflation rate is good news for mortgage rates, but the potential for additional hikes from the central bank this year will keep upward pressure on already high rates.
Rather than worrying about mortgage rates, though, homebuyers should focus on what they can control: getting the best rate they can for their financial situation.
30-year fixed-rate mortgages
The average 30-year fixed mortgage interest rate is 7.62%, which is an increase of 11 basis points from one week ago. (A basis point is equivalent to 0.01%.) The most frequently used loan term is a 30-year fixed mortgage. A 30-year fixed rate mortgage will usually have a lower monthly payment than a 15-year one — but typically a higher interest rate. You won’t be able to pay off your house as quickly and you’ll pay more interest over time, but a 30-year fixed mortgage is a good option if you’re looking to minimize your monthly payment.
15-year fixed-rate mortgages
The average rate for a 15-year, fixed mortgage is 6.83%, which is an increase of 11 basis points compared to a week ago. Compared to a 30-year fixed mortgage, a 15-year fixed mortgage with the same loan value and interest rate will have a bigger monthly payment. However, if you can afford the monthly payments, there are several benefits to a 15-year loan. You’ll typically get a lower interest rate, and you’ll pay less interest in total because you’re paying off your mortgage much quicker.
“Mortgage rates have hovered in the 6% to 7% range for the past 10 months. Though home prices have softened slightly nationally, the still-high cost of borrowing means hopeful home buyers have felt little relief,” said Hannah Jones, economic research analyst at Realtor.com.
Annual home sales are expected to rise 12 percent in California this year and another 12.5 percent in 2009, but much of the increase can be attributed to distressed sales, according to the “State of the California Housing Market 2008-2009” report released this week by the California Association of Realtors.
Nearly one in five (19.8 percent) sellers sold their homes at a loss this year because the property was in default, foreclosure, or short sale, a six percent increase from 2007.
“Many home sellers sold their properties at a loss, as price declines eliminated equity gains,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young, in a release.
“The number of sellers who sold their home with a loss almost doubled from 11.9 percent in 2007 to a record-setting 22.2 percent in 2008, well above 1.9 percent in 2006, and almost triple the long-term average of 7.7 percent.”
About half (47 percent) of sellers who owned their homes for less than three years experienced a net cash loss in 2008, an increase of 34 percent from 2007.
Those with lower-priced homes were most likely to experience a loss, with 28 percent of sellers with homes valued under $500,000 suffering a net cash loss this year.
More than half of the distressed properties sold were Real Estate Owned, about a third were short sales, and the remainder were foreclosures.
One in five homes fell out of escrow in 2008, primarily because buyers couldn’t obtain financing or simply changed their minds and decided not to buy, while 80 percent were discounted.
Speaking of financing, the use of second mortgages dropped precipitously during the year, with just 9.3 percent of sales relying on such loans, down from 32.7 percent in 2007.
The median price of existing homes declined by 17.8 percent to $440,000 this year, down from $535,000 a year earlier, marking the largest drop in price since data has been collected.
“The market will continue to experience large year-to-year decreases in the coming months before leveling out in 2009. The statewide median price is expected to decline 31.7 percent to $381,000 for 2008, the first decline since 1996. The statewide median price will further decline by 6 percent in 2009 to $358,000,” Appleton-Young added.
Reflecting on 2022, more than half of retailers said sales were up over 2021, which was considered to be a banner year buoyed by pandemic-fueled shopping. But expectations for how this year will turn out are less optimistic, with just 37% expecting another year of sales growth.
Nearly one-third of respondents to the Strategic Insights Home Accents Today survey expect 2023 to produce lower sales than the previous year, and nearly as many see them as flat. In last year’s survey, more than half (53%) predicted sales would stay the same this year.
One action the majority of retailers (59%) took in 2022 was to raise prices. The survey found 44% boosted tags by 6% to 10%, and one-quarter hiked them between 11% and 15%. For 2023, 26% of respondents have already raised prices or plan to do so, while the same percentage are putting off an increase, leaving about half (48%) as undecided.
Among those who did opt for higher pricing, all of them said they did so to pass along increases that came from their vendors. Nearly three-quarters (71%) also cited inflation as a leading cause, while factors such as warehouse costs and supply chain played a much smaller role.
A couple of elements that could influence sales into the future are the growing popularity of sustainable and handmade goods. Products with a sustainability story were deemed very or somewhat important to their customers by 41% of those surveyed, prompting nearly one-fifth of retailers to say they seek out such items at markets.
Meanwhile, almost two-thirds of respondents said they already carry handmade or artisan products in their stores. A little more than one-third (35%) devote between 5% and 10% of their inventory to artisan goods, while an evenly divided 24% said these items account for 11% to 20% or 21% to 30% of total inventory.
About the data
The information shared here is based on a Home Accents Today online survey of home accent, home and gift and interior designer-run retail stores and full-line furniture retailer readers of Home Accents Today and Furniture Today, fielded in June and July 2023. The research was conducted and analyzed by Strategic Insights. Based on the sample size, the survey results are considered qualitative rather than quantitative.
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Here’s a shift: Some home décor wholesale prices are dropping
Both home equity line and indirect auto loan delinquencies reached the highest levels ever recorded during the third quarter, according to the American Bankers Association’sConsumer Credit Delinquency Bulletin.
Home equity line delinquencies increased seven basis points to a record high 1.15 percent during the quarter, while indirect auto loans, which account for 90 percent of auto loans, saw lates increase to 3.25 percent from 3.07 percent.
Home equity loans also worsened, with delinquencies climbing from 2.56 percent to 2.63 percent.
The ABA composite ratio, which includes eight closed-end installment loan categories, climbed 22 basis points to a seasonally adjusted 2.90 percent, the highest level since 1980.
Interestingly, bank cards, which are simply credit cards provided by banks, saw delinquencies fall 34 basis points to 4.20 percent of all accounts.
Bank cards were one of just two categories that saw delinquencies fall during the quarter, with direct auto loan delinquencies slipping from 1.77 percent to 1.71 percent.
“While some people are relying on credit cards to meet daily expenses like food and gas, many are being careful not to add new debt,” said ABA Chief Economist James Chessen, in a statement. “Reducing debt and building up cash reserves are good strategies right now.”
“If you’re under financial stress, credit cards can be a bridge to meet daily expenses. And, unlike other loans with fixed payments, credit cards let you adjust monthly payment amounts. This flexibility is certainly helping people manage debt better during this difficult economic period,” Chessen added.
It looks as if consumers are keeping daily expenditures in check and making sure basic accounts are being paid, while letting loans tied to their homes fall into default.
Perhaps because they can seek assistance for delinquent homes loans, or maybe because they’ve simply given up as they’re so far underwater at this stage.
“The number one factor in rising consumer credit delinquencies is job losses. With one million jobs lost in the first three quarters and two and a half million expected for the year, delinquencies of all types of consumer loans will likely increase in the coming quarters,” Chessen said.
The ABA defines a delinquency as an account that is 30 days or more overdue.
Many people will look back at 2013 with regret, perhaps realizing that there was a golden opportunity to purchase a home at a major discount. And snag a record low mortgage rate to boot.
Today, home prices aren’t so low, nor are mortgage rates. Yes, they’re both lower than they were during the previous boom, but they’re markedly higher than they were just 12 months earlier.
What’s clear today is that real estate cycles move fast, if the last few years were any indication.
Back in 2011 and 2012, most didn’t want to touch real estate with a 10-foot pole, but in early 2013, it became a manic buying frenzy.
There weren’t enough homes on the market to quench the appetite of hungry buyers nationwide.
And the few homes that did come to market went to all-cash buyers, aka investors with deep pockets. New families and first-time home buyers simply got outbid and moved on to the next property.
Often, that next property wasn’t their dream home, nor did it fit their original needs. But the desire to get in a house, any house, was strong. Feverish even. Not exactly ideal conditions.
Fast forward to early 2014 and for sale signs are collecting dust, getting sun or snow damage, and falling apart. There’s even talk of another housing bubble.
Scan your local listings and you’ll probably see a fair amount of properties that have been on the market for months, if not more than a year.
In Between a Seller’s and Buyer’s Market
Things seem to be leveling out between buyers and sellers
But that doesn’t mean the pendulum is going to swing the other way
It’s common during real estate recoveries
To have lulls and hiccups on the way up
Unfortunately, it’s not necessarily a buyer’s market either. The reason properties are stagnating and inventory is beginning to rise is because the rent vs. buy ratio isn’t all that favorable for the latter.
If you do the math, it could make sense to buy that home, but it’s not nearly as compelling as it was just a year ago.
In 2013, it was a veritable no-brainer in most cases. Today, it could go either way. It’s becoming balanced, one could say.
The problem is that many homeowners looking to list their homes still think real estate is white-hot, meaning expectations to book a generous profit far exceed reality.
There’s also the issue of affordability, which has kind of crept into the headlines lately. Most media still put forth the idea that “it’s a great time to buy,” but among those rosy outlooks are disturbing affordability issues.
After all, there are consequences when home prices surge and mortgage rates climb back to more normal levels. And this would be fine if the economy was chugging along again and prospective home buyers were getting raises and socking away more money.
But that’s not really the case at the moment. Things are still very tenuous at best.
Beware of the Coming Investor Selloff
One thing any homeowner should worry about
Is what real estate investors will do with their inventory
They purchased a countless (high) number of single-family homes recently
Which at some point they’ll likely dump because they won’t want to be in that business forever
Adding to the wobbly economic outlook is the fact that investors own a ton of homes across America.
And word on the street is they don’t plan to hold them very long. A survey issued last week by Zillow indicated that most economists, real estate experts, and market strategists believe investors will sell the majority of homes in their portfolios during the next three to five years.
In other words, lots of inventory will make its way to market, perhaps all in a small window of time.
That might explain why panelists polled by Zillow also expect home appreciation to slow considerably in the next few years.
On average, 4.5% appreciation is expected through the end of 2014, followed by 3.8% in 2015 and 3.3% by 2018, figures closer to historic norms, and nowhere near what we experienced over the past 12 months.
Zillow also noted that home values increased just 0.2% from December to January, the slowest pace in 18 months.
You can blame the weather, or seasonal patterns, but the number of properties listed on Zillow increased 11.1% on a seasonally adjusted basis in January from a year earlier, the fifth straight month year-over-year inventory went up.
Expect that to continue as more homeowners gain enough home equity to sell, and investors cash in after a couple of amazing years.
If you’re a buyer, it’s going to get easier to purchase a home as time goes on, you just might pay more than you’d like. But at least you won’t be involved in a bidding war…and heck, you might even get some seller concessions!