Explore the diverse landscapes and cultural richness of Illinois, affectionately known as the “Land of Lincoln.” From the cityscape of Chicago to the tranquil expanses of rural farmland, the state has something that caters to various lifestyles. However, living in Illinois presents its own challenges, including the high taxes and traffic congestion in urban areas. In this ApartmentGuide article, we’ll examine the pros and cons of living in Illinois, providing you with valuable insights into life in the “Land of Lincoln.”
Renting in Illinois snapshot
Population
12,549,689
Avg. studio rent
$1,309 per month
Avg. one-bedroom rent
$1,544 per month
Avg. two-bedroom rent
$1,928 per month
Most affordable cities to rent in Illinois
Mattoon, Herrin, Charleston
Most walkable cities in Illinois
Oak Park, Chicago, Evanston
1. Pro: Diverse job opportunities
Illinois has a diverse economy that provides residents with a wide range of job opportunities across various industries. Cities like Chicago serve as major hubs for finance, technology, healthcare, and manufacturing, offering employment prospects for professionals with diverse skill sets. Additionally, Illinois is home to numerous Fortune 500 companies, including Boeing, Caterpillar, and Archer Daniels Midland, which contribute to the state’s robust job market.
2. Con: Severe winters
The harsh winters in Illinois bring bone-chilling temperatures and heavy snowfall, posing challenges for residents in commuting and daily activities. The bitter cold often leads to increased heating costs and potential hazards such as icy roads and frostbite. For those unaccustomed to such extreme weather, the long winter months can be a significant drawback to living in Illinois.
3. Pro: Access to great education
Illinois is renowned for its prestigious educational institutions, giving residents access to world-class education at all levels. Universities like the University of Chicago, Northwestern University, and the University of Illinois at Urbana-Champaign, provide an exceptional academic program and research opportunities.
4. Con: High taxes
Illinois is known for its relatively high taxes, including property taxes and income taxes, which can place a significant financial burden on residents. For instance, Illinois is ranked number 9 in the nation for highest taxes. These taxes often contribute to the state’s overall cost of living, making it a less attractive place to live.
5. Pro: Strong sports culture
Chicago, in particular, is home to iconic sports franchises such as the Chicago Cubs, Chicago White Sox, Chicago Bulls, and Chicago Bears, fostering a sense of community and pride among residents. Outside of Chicago, Illinois offers a diverse range of sports and recreational activities. Cities like Peoria are known for their rich baseball history, with the Peoria Chiefs providing entertainment for fans.
6. Con: Traffic congestion
Traffic congestion is a prevalent issue in Illinois, particularly in urban areas like Chicago, where gridlock during rush hours is a common frustration for commuters. The heavy traffic not only leads to longer commute times but also contributes to increased air pollution and fuel consumption, impacting both the environment and residents’ quality of life.
7. Pro: Diverse culinary scene
Illinois’ diverse population contributes to a vibrant culinary scene, offering residents a wide array of dining options to suit every palate and preference. From trendy bistros to cozy cafes, Evanston offers an array of dining options ranging from global fusion cuisine to locally sourced farm-to-table fare. Larger cities like Chicago are renowned for their diverse and innovative food scene, with Michelin-starred restaurants, ethnic eateries, and local favorites lining the streets. From deep-dish pizza and Chicago-style hot dogs, Illinois has various options sure to cater to your cravings.
8. Con: Poor air quality in some metros
Chicago often experience poor air quality due to factors such as vehicle emissions and industrial activities, which can exacerbate respiratory issues and decrease overall well-being. Additionally, agricultural runoff from the state’s extensive farmlands can contribute to water pollution, impacting both ecosystems and public health.
9. Pro: Vibrant arts and music scene
Illinois boasts a vibrant arts and music scene, with numerous theaters, galleries, and performance venues showcasing local and international talent. Chicago’s theater district, home to iconic institutions like the Goodman Theatre and Steppenwolf Theatre Company, offers residents a rich cultural experience with world-class productions and performances. Additionally, cities like Champaign-Urbana contribute to the state’s scene with Krannert Center for the Performing Arts and the University of Illinois’ renowned School of Music.
10. Con: Natural disaster risk
Illinois faces natural disaster risks, including tornadoes that can wreak havoc across the state, such as the devastating tornado outbreak in 2013 that caused significant damage in communities like Washington and Coal City. The state’s proximity to the New Madrid Fault Zone also poses a seismic risk, with the potential for earthquakes to occur, although less frequent than tornadoes.
11. Pro: Affordable housing options
Illinois provides a range of affordable housing options, especially in suburban and rural areas surrounding major urban centers such as Chicago. Cities like Rockford and Springfield exemplify this affordability, offering residents access to reasonably priced homes and apartments. For instance, in Rockford, the median home sale price stands at $152,000, while the average rent for a one-bedroom apartment is $837, making it an attractive option for those seeking affordable housing in the state.
12. Con: Crowded tourist seasons
Illinois experiences crowded tourist seasons, particularly in popular destinations like Chicago, where attractions such as Navy Pier and Millennium Park draw large crowds throughout the year. The influx of tourists can lead to congested streets, longer wait times at restaurants and attractions, and increased competition for housing and parking spaces, impacting the daily lives of residents.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
Bonds Rattled By Surprisingly Big Beat in Spending Data
By:
Matthew Graham
Thu, Apr 25 2024, 4:01 PM
Bonds Rattled By Surprisingly Big Beat in Spending Data
Today’s big surprise was the PCE price index component of Q1 GDP. GDP itself was weaker than expected, but even that was explained away by components not related to private domestic consumption. Focusing on the latter makes Q1 look just as strong as any of the past few quarters. PCE did the most damage for two reasons. It was MUCH higher than expected (3.7 vs 3.4) and that implies tomorrow’s PCE data (a monthly version of today’s quarterly report) is also at risk of coming in higher than expected. This “sneak peek” effect is only a concern once per quarter with the “advance” release of GDP.
Jobless Claims
207k vs 214k f’cast, 212k prev
Continued Claims
1781k s 1814k f’cast
GDP
1.6 vs 2.5 f’cast, 3.4 prev
Q1 PCE Prices
3.7 vs 3.4 f’cast
Wholesale Inventories
-0.4 v s +0.2 f’cast
08:41 AM
Bonds losing ground quickly after 8:30am data. MBS down a quarter point. 10yr up almost 5bps at 4.691.
11:07 AM
Weakest levels at 9:30am and pushing back slightly since then. 10yr up 6.4bps at 4.706. MBS down 10 ticks (.31).
01:28 PM
No reaction to 7yr Treasury auction. 10yr up 6.1bps at 4.703. MBS down 11 ticks (.34)
03:35 PM
Increasingly flat at the same old levels. 10yr up 6bps at 4.702 and MBS down 10 ticks (.31).
Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.
National mortgage rates edged higher for all types of loans compared to a week ago, according to data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans jumped.
Some forecasters are backing off from the earlier expectation of lower mortgage rates this year. Fixed mortgage rates follow the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy, inflation and Federal Reserve decisions.
“The issue of inflation remains unsettled,” says Ken Johnson of Florida State University. “This is putting upward pressure on mortgage rates through the yield on 10-year Treasurys.”
The Fed indicated it’d cut rates in 2024, but policymakers held off at its latest meeting, citing the need for more promising economic data. The Fed has been working to bring inflation back to its 2 percent target since 2022.
The Fed meets next on May 1 — at the start of the homebuying busy season.
Whether mortgage rates move up or down, though, it’s difficult to time the market. Often, the decision to buy a home comes down to what you need. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than waiting for a time when rates and prices are more favorable.
Rates accurate as of April 22, 2024.
The rates listed here are averages based on the assumptions shown here. Actual rates available across the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Monday, April 22nd, 2024 at 7:30 a.m. ET.
30-year mortgage rate increases, +0.24%
The average rate you’ll pay for a 30-year fixed mortgage today is 7.29 percent, up 24 basis points over the last seven days. Last month on the 22nd, the average rate on a 30-year fixed mortgage was lower, at 6.97 percent.
At the current average rate, you’ll pay a combined $684.89 per month in principal and interest for every $100,000 you borrow. That’s up $16.23 from what it would have been last week.
Learn more about 30-year fixed mortgage rates, and compare to a variety of other loan types.
15-year mortgage rate advances, +0.20%
The average 15-year fixed-mortgage rate is 6.74 percent, up 20 basis points over the last week.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $884 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much faster.
5/1 ARM rate trends higher, +0.10%
The average rate on a 5/1 adjustable rate mortgage is 6.68 percent, rising 10 basis points since the same time last week.
Adjustable-rate mortgages, or ARMs, are mortgage loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for people who expect to refinance or sell before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.68 percent would cost about $644 for each $100,000 borrowed over the initial five years, but could climb hundreds of dollars higher afterward, depending on the loan’s terms.
Jumbo mortgage interest rate moves up, +0.17%
The average rate for a 30-year jumbo mortgage is 7.38 percent, up 17 basis points since the same time last week. This time a month ago, jumbo mortgages’ average rate was below that at 7.12 percent.
At today’s average rate, you’ll pay $691.02 per month in principal and interest for every $100,000 you borrow. That’s an increase of $11.55 over what you would have paid last week.
Refinance rates
30-year fixed-rate refinance goes up, +0.23%
The average 30-year fixed-refinance rate is 7.30 percent, up 23 basis points over the last seven days. A month ago, the average rate on a 30-year fixed refinance was lower at 6.91 percent.
At the current average rate, you’ll pay $685.57 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $15.56 higher.
Where are mortgage rates heading?
If and when the Fed cuts interest rates depends on incoming economic data, such as the rate of inflation and the jobs market.
“While the majority of Fed members still expect three rate cuts this year, Atlanta Fed President Bostic is now predicting just one rate cut in the fourth quarter,” says Melissa Cohn of William Raveis Mortgage. “Not the news we want for the spring market.”
Keep in mind: The rates on 30-year mortgages mostly follow the 10-year Treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves.
These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate than the trend based on your own financial profile.
What current rates mean for you and your mortgage
While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent anytime soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.
The U.S. Department of Housing and Urban Development (HUD) on Friday announced that a proposed change to the Home Equity Conversion Mortgage (HECM) for Purchase (H4P) program has been modified to bar the practice of premium pricing, and it will only allow interested party contributions (IPCs) on H4P closing costs from property sellers, builders, real estate agents and developers.
After concerns were raised in the public comment period following the proposed H4P changes announced late last year — including from AARP — some planned updates will not be implemented, according to a statement from the Federal Housing Administration (FHA). A Mortgagee Letter (ML) detailing the particulars of the policy changes has been released in conjunction with a new entry in the Federal Register.
Changing course
In October, FHA published proposed guidance for the H4P program in the Federal Register. In certain circumstances, the program would allow for inclusion of “an ‘interested party contribution’ [of] up to six percent of the sales price,” according to the original plan. After concerns during the proposal’s comment period were brought to the attention of policymakers, however, HUD and FHA have decided to walk back some of these plans.
“FHA will move forward with its proposal that permits contributions by the property seller, real estate agent, builder, or developer to HECM for Purchase borrowers’ closing costs,” the update said. “However, at this time, FHA will not allow [lenders] and third-party originators (TPO) to make such IPCs, nor will it allow premium pricing to qualify as an eligible funding source to meet the borrower’s minimum required investment.”
The new guidance as published in the Federal Register and in a new ML “also restores FHA’s previous policy that discount points and interest rate buydowns are not allowable closing costs,” FHA explained.
The original effective date as announced last fall remains in effect, which will be April 29, 2024. ML 2024-06 details the particulars of the policy revisions, changes to particular regulations and added that the “model HECM fixed and adjustable rate mortgage payment plans and model Exhibit II – Schedule of Closing Costs have been modified to align with the provisions of this ML.”
Initial concerns
In a letter sent to FHA Commissioner Julia Gordon in December, David Certner, legislative counsel and legislative policy director in the government affairs division at AARP, explained why the group opposed the initially proposed changes to the H4P program.
“We oppose the permitting of mortgagee and third-party originator premium pricing credits to be used toward the down payment,” Certner wrote at the time. “Premium pricing credits are discretionary and can be used as a means to influence a borrower to engage in the transaction. These credits can lead to fair lending violations. In the forward market, there have been cases where lenders do not pass on the full amount of premium pricing credits to consumers, resulting in an enforcement order and penalty fines to the lender.”
Additionally, since HECMs are negatively amortizing, then accepting a higher interest rate in return for a closing credit “is a very costly tradeoff for a consumer, and even more costly for a reverse mortgage transaction since interest costs are added to the loan balance each month,” the letter stated.
While AARP supported IPCs on H4P loans from the seller, real estate agent, builder or developer, the group opposed “permitting mortgagees and third-party originators to contribute to closing costs. Historically, mortgage lenders and originators have been prohibited from contributing to closing costs to protect borrowers.”
Reactions to the changes
Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA), told RMD that the association is disappointed in some aspects of this decision.
“NRMLA, and its members, are disappointed that HUD has had to pull back on certain specific H4P features, which would have better aligned the product with the way things are done on the forward side of the mortgage business,” he said. “We also understand that we must ensure there is clarity for the consumer in how these product features work, and the [resulting] consumer impacts. NRMLA will devote itself to identifying any concerns regarding these features and work to resolve them.”
Reverse mortgage originator Chris Bruser with Mutual of Omaha Mortgage told RMD that he remains excited in general about the closing cost changes and builder incentives, but the discount point changes are discouraging as an industry professional who actively sources H4P business.
“I’m kind of a little bit disappointed in that,” he said. “It would be nice to be able to see that, especially here in Florida, where our closing and third-party costs are quite a bit higher. Any kind of extra help that our borrowers could obtain to lower their investment would be a welcome change.
“But I think at least allowing the credits to be there is a big step. Not allowing the discount points doesn’t necessarily seem like a game changer to me, though it would be nice to have that additional help. Still, I’ll take what we got.”
The National Consumer Law Center (NCLC) quickly lauded the development, according to an announcement issued by the organization.
“Reverse mortgage borrowers take on a complex financial product to reduce housing expenses and maintain stable shelter,” said Sarah Mancini, co-director of advocacy at NCLC. “HUD’s policy announcement today will remove the risk that these older homeowners will be up-charged on their interest rate in ways that would cost them more and eat up their home equity faster.”
The move will also stabilize housing for older Americans, according to Odette Williamson, a senior attorney with NCLC.
“HUD’s actions to strengthen the HECM program are extremely important steps toward increasing stable housing for older adults,” Williamson said. “We look forward to continuing to share information with the agency as it bolsters this crucial loan program.”
Phoenix is a city that offers so much more than a typical desert experience. As the fifth-largest city in the United States, those lucky enough to own a home in Phoenix enjoy year-round sun and the ability to easily explore its natural landscape at the drop of a hat.
Whether you’re hitting the links on a world-class golf course, cheering on the Phoenix Suns, or enjoying a stroll through Papago Park, Phoenix is known for a whole lot, and with good reason.
Below is a brief breakdown of ten of the top things Phoenix is known for. So, put on some sunscreen, dawn your finest tanktop, and join us on a journey through this stunning desert city.
1. World-renowned golf courses
Phoenix is a paradise for golfers with tons of world-class courses. These courses are celebrated for their challenging layouts and stunning desert backdrops. Facilities like TPC Scottsdale and the Phoenix Country Club offer top-tier golfing and host professional tournaments, attracting golfers from all over. Needless to say, many dedicated golfers dream about finding an apartment in Phoenix at some point in their lives.
2. The Phoenix Suns
The Phoenix Suns are an integral part of the city’s identity. They bring unparalleled energy and excitement to every Phoenix neighborhood. One of the city’s two major league sports teams, they play home games at the Footprint Center, where fans gather in droves to support their team.
3. Year-round sun
One of Phoenix’s most appealing features is its year-round sun. This sunny standard allows for an active lifestyle, whether it’s hiking, biking, or simply kicking back by the pool under a well-placed umbrella.
4. Papago Park
Papago Park is a staple for outdoorsy types in Phoenix. Known for its distinctive red sandstone formations and comprehensive network of trails, the park is perfect for hiking, cycling, and even fishing in its stocked ponds. The park also houses the Phoenix Zoo and Desert Botanical Garden, making it a solid destination for nature lovers and large families alike.
5. Arizona Diamondbacks
The Arizona Diamondbacks are Phoenix’s MLB team. This team holds a special place in the hearts of sports fans across the state and the entire southwest. Playing their home games at Chase Field, attending a DBacks game is always a great way to spend a day in Phoenix. Their 2001 World Series win remains one of the proudest moments in the city’s history.
6. Saguaro cacti
As a desert city, Phoenix is known for its cacti. The iconic Saguaro cactus is forever linked with the Phoenix landscape. These towering cacti can live over 150 years and are a vital part of the desert ecosystem. They provide homes for desert wildlife and add to the iconic natural beauty that Phoenix is known for.
7. Musical Instrument Museum
Phoenix is home to one of the more unique museums in the country, the Musical Instrument Museum (MIM). The MIM showcases over 6,800 instruments from around the world. The MIM provides a deep dive into the fascinating world of music with galleries featuring instruments from every country. Interactive, engaging, and educational, the museum is a one-of-a-kind place that resonates with music lovers of all ages.
8. Desert Botanical Garden
The Desert Botanical Garden is another gem in Phoenix, dedicated to conserving desert plants. With more than 50,000 plant displays showcased in outdoor exhibits, the garden emphasizes the beauty and diversity of desert flora. It also serves as a center for research, conservation, and education on desert environments.
9. South Mountain Park and Preserve
As one of the largest municipal parks in the United States, South Mountain Park and Preserve has more than 16,000 acres of desert landscape. This sprawling park is a haven for hikers, bikers, and horseback riders with its plentiful trails and panoramic city views from Dobbins Lookout.
10. Heard Museum
The Heard Museum showcases Native American art and attracts visitors with its insightful exhibitions and collections. The museum presents historical artifacts and contemporary art, illustrating the history and living cultures of Native peoples of the Southwest.
Over the years, consumer perception of electric vehicles has been all over the map, with some early adopters embracing them and others feeling apprehensive about issues like battery range, price, and the environmental impact of EV production.
Within the next decade, however, the choice to buy an EV or other “zero-emission” model might produce no hesitation at all: It might be the only new car you can buy where you live.
At least a dozen states have made moves to restrict the sale of vehicles driven purely by internal combustion engines, with nine working toward an all-out ban by 2035. The states are following California’s Advanced Clean Cars II (ACCII) rule, which requires automakers and car dealers to sell increasingly more zero-emissions vehicles each year between 2026 and 2035. For example, in 2026, 35% of new vehicles on car lots within an ACCII state must be emission-free. That percentage will gradually increase year after year to 100% by 2035 — an effective ban on purely gas-powered vehicles.
In addition to EVs, California’s definition of zero-emission vehicles includes battery-electric, hydrogen fuel cell electric and plug-in hybrid electric vehicles.
So far, eight states and Washington, D.C., have adopted ACCII for light passenger vehicles. The states are Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington, and, most recently, Virginia. Connecticut and Maine are also considering the measures but haven’t adopted them formally, while Colorado, New Mexico, Delaware and Minnesota have partially adopted a large portion of the standards.
What the ban means for owners of gas cars
To be clear, the ACCII regulations will only prohibit the sale of newinternal-combustion passenger vehicles (cars, SUVs and light-duty trucks) starting in 2035. They wouldn’t, however, require drivers of gas cars to forfeit ownership of previous models.
Residents of these states could still buy used gas-powered vehicles within the state’s borders. Likewise, nothing in the regulation would prohibit drivers from buying a new gas car from a state without the ban, then registering it within a state that has one. Although amendments can be made at any time, currently only the sale of gas-powered cars by 2035 would be prohibited in a state whose standards are identical to ACCII.
Of course, regardless of the ban, drivers who want a new internal-combustion vehicle in 2035 may have fewer choices. Already Stellantis — the company behind Chrysler, Dodge, Fiat, and Jeep — has warned dealers it will ship fewer gas cars to states that follow California’s emissions standards, while also pledging to have electric vehicles make up half of its North American sales by 2030.
Meanwhile, other automakers have announced plans to cease production of fully gas-powered cars at around the same time that the ACCII would phase them out. For example, General Motors plans to stop making gas cars by 2035, with an earlier date of 2030 for a fully electric lineup of Cadillac and Buick. Ford has said it plans for EVs to make up half of car sales by 2030. Other car companies that have pledged to sell electric only include Volvo (2030), Mercedes-Benz (2030), Honda (2040) and Volkswagen (2040).
While some of these goals are objectively ambitious (and often contingent on market conditions), they’re in lockstep with gas car bans planned by nations with large economies, including those in the European Union (2035), Japan (mid-2030s) and South Korea (2035), among others.
Will other states ban gas cars in the future?
As it stands, most states don’t have plans to discontinue the sale of gas-powered vehicles in the near future. But it’s possible that other states will join those that do, especially if they tend to follow California’s stricter vehicle emission standards.
Because of the Clean Air Act, no state except California can create its own fuel economy standards, but states can choose to adopt California’s guidelines under a provision called Section 177. Presently, 17 states have emission standards tied to California’s: Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.
So far, only eight of these states have formally adopted a standard that’s identical to California’s Advanced Clean Cars II regulations. Colorado, New Mexico and Delaware have partially adopted the standard, but instead of a 2035 ban on gas-powered vehicles, these three states will require 82% of new car sales to be emission-free by 2032. Minnesota enacted its “Clean Cars Minnesota” rule this year, which requires automakers to cut down on emissions and produce more zero-emission cars. However, it doesn’t have plans to ban gas cars.
Likewise, neither Pennsylvania nor Nevada have announced plans to follow California’s standards. Maine and Connecticut were expected to adopt ACCII regulations, though both states have so far voted against them.
If states don’t follow California’s standards, they’ll have to comply with federal regulations, which currently don’t have a plan to ban gas vehicles. But federal policy is shifting. In March 2024, the Environmental Protection Agency finalized measures that require automakers to gradually reduce the emissions associated with the vehicles they sell. The rule applies to model years 2027 through 2032.
While the new rules don’t require a specific percentage of sales to be zero-emission vehicles, the Biden administration estimates the new emission standards could be met if EVs make up 56% of new car sales by 2032 (with another 13% of sales composed of plug-in hybrids or other partially electric cars).
It’s not a ban per se on entirely gas-powered vehicles. But, when coupled with state bans, plus automakers’ pledges to produce less of them, it could mean fewer engines that go “potato potato potato”and more that hum quietly off dealership lots.
Investors evaluating precious metals often ask: gold vs silver, which is better for investors? In this comparison, discover the investment merits of gold’s stability and silver’s industrial relevance, geared towards helping you decide which metal suits your financial strategy. Without leaning towards one or the other, this article presents a balanced view to inform your choice.
Key Takeaways
Gold and silver serve as a store of value and a hedge against inflation, with gold mainly being an investment asset while silver has significant industrial applications, impacting their price volatility and investment suitability.
Gold is revered as a safe haven asset, attracting investment during economic turmoil and serving as an inflation hedge, while silver’s dual role in industry and investment sectors offers growth potential and affordability.
Investors should consider precious metals within a diversified portfolio and can choose between physical metals, ETFs, or mining stocks, each with its own benefits and risks, and should evaluate after-inflation returns and personal financial goals to decide between gold and silver.
Gold and silver, the titans of precious metals, have long served as a reliable store of value and an effective inflation hedge. While gold primarily functions as an investment asset, offering potential for significant returns to those with larger capital, silver boasts an additional industrial role, broadening its appeal. However, investing in these precious metals isn’t as simple as stashing bars or coins in a safe. It involves dealing with price volatility and aligning your investment with long-term goals.
Adopting a buy-and-hold approach may serve investors best over the long term when investing in gold and silver. But why? It’s because the prices of these metals are shaped by a vast array of factors. Geopolitical issues, economic turmoil, and demands in the industrial sector all play a part in the daily dance of gold and silver prices. Understanding these factors can help you make informed decisions about when and how much to invest.
So why consider precious metals as part of your investment portfolio? They offer a unique combination of benefits:
Gold, with its reputation as a safe haven, attracts those looking for stability amidst market chaos
Silver, with its dual role in the industrial and investment sectors, offers an affordable entry point for investors with smaller capital
Both metals provide a robust way to diversify your portfolio and protect against inflation.
Understanding Gold’s Position as a Safe Haven Asset
Gold has long been a symbol of stability and security in the financial world. Its glittering history spans centuries, maintaining its value even in times of economic turmoil. It’s no wonder that in periods of global uncertainty or financial crises, investors often flock to gold, buoying its value and cementing its reputation as a safe haven.
One of gold’s most notable features is its role as an inflation hedge. As the cost of living increases, inflation hedge gold has shown a remarkable ability to preserve the real value of assets. This unique characteristic comes from how gold’s supply growth aligns with long-term global economic growth, helping to maintain its value during inflationary periods. This resilience, coupled with the tendency of investors to shift towards gold as a safe haven during inflation, can drive up its demand and price.
Given these factors, it’s clear why gold holds a revered place in the financial market. Whether you’re looking for a buffer against economic instability or an asset that can protect your buying power in the face of rising prices, gold stands firm as a reliable safe haven asset.
Silver’s Dual Role: Industrial Demand and Investment Segment
While gold may steal the spotlight for its luster and stability, silver plays a shining role of its own. Apart from being an investment asset, silver’s widespread industrial applications can drive up its price and enhance its investment appeal. In 2023, industrial applications reached a new record high, with photovoltaics usage increasing by a staggering 64%. China’s industrial demand for silver surged by 44% in the same year, predominantly driven by growth in green applications such as:
photovoltaics
solar panels
batteries
electronics
medical devices
These industrial applications highlight the versatility and value of both silver and silver bullion coins as an investment.
Due to its significant industrial use and affordable price point, silver is an accessible option for investors with smaller amounts of capital. However, the silver lining has a cloud. During economic downturns, silver’s industrial use can result in a drop in demand and a corresponding price drop. This volatility underscores the need for investors to consider their risk tolerance when investing in silver.
Despite its volatility, the forecast for silver demand in 2024 predicts a growth of 2%, with industrial production expected to achieve new records. This projected growth, along with silver’s role in portfolio diversification and potential for future price appreciation, suggests that silver’s investment appeal may shine brighter in the future.
Including gold and silver in a diversified portfolio can enhance performance during market volatility and inflation. Financial advisors often suggest allocating 5-10% of an investment portfolio to commodities like gold and silver for diversification purposes. The logic is simple: gold offers diversification due to its historically low correlation with other financial assets such as stocks and bonds.
The inclusion of gold and silver, primarily an investment asset class, which unlike an asset produces cash flow, can act as an uncorrelated asset relative to equities, serving to diminish the total volatility of the portfolio.
Some benefits of including silver in your portfolio are:
Silver has significant industrial applications
It is positively correlated with periods of economic growth
Anticipated growth in areas such as renewable energy and artificial intelligence suggests an expanding demand for silver.
However, it’s crucial for investors to consider the following factors when determining the fit of precious metals within their investment strategies:
Potential costs for secure storage of precious metals
The speculative nature of precious metals
Due diligence and careful consideration of your financial circumstances
As with any investment decision, due diligence and careful consideration of your financial circumstances are key, including addressing portfolio risk management requirements.
While investing in physical precious metals has its appeal, precious metal mining stocks offer an intriguing alternative. Gold stocks provide a leveraged play that can outperform physical gold when prices rise, offering substantial potential for capital gains. The reason? Mining stocks do not just reflect the value of the precious metal. They also include the prospects of mining companies themselves.
Compared to physical gold, gold stocks offer several advantages:
They are more liquid and can be easily bought and sold.
They can provide additional income through dividends paid by established, profitable mining companies.
Investors can benefit from the expansion of mining operations and reap profits from significant new gold discoveries.
These advantages make gold stocks an enticing option for those looking to diversify their portfolio.
Moreover, by choosing gold mining stocks, investors can avoid the extra costs associated with the storage and security of physical gold. This can make gold stocks a more convenient and cost-effective alternative for investors who want exposure to gold without the logistical challenges of owning physical metal.
Physical Bullion vs. ETFs: Choosing Your Investment Vehicle
When considering precious metals as part of your investment strategy, it’s essential to explore all available options. Physical bullion and exchange-traded funds (ETFs) present two distinct investment vehicles, each with its own set of advantages and challenges. Gold ETFs, for instance, offer enhanced liquidity compared to physical gold, allowing investors to quickly buy and sell shares without facing the logistical challenges tied to physical transactions of gold.
Investing in gold ETFs can also be more cost-effective over time. Investors do not have to deal with the costs of purchasing and maintaining physical gold, and the responsibilities of securing and insuring the physical gold are professionally managed by the fund. However, it’s crucial to remember that the value of shares in gold ETFs may not track the price of gold precisely, as the fund’s expenses could slightly erode the value of these shares over time.
On the other hand, investing in physical gold comes with its own set of considerations. Apart from the allure of owning a tangible asset, investors must account for costs such as storage fees, insurance, and potentially higher dealer premiums over the market price. Additionally, purchasing physical gold requires vigilance due to the risks of scams, necessitating transactions with reputable dealers and possible appraisal costs, which add to the overall investment expense.
Evaluating After-Inflation Returns: Gold vs. Silver
When it comes to returns, it’s crucial to look beyond the nominal figures and consider the real value – the after-inflation returns. And in this regard, the performance of gold and silver may not be as glittering as one might expect. However, these precious metals have historically provided a hedge against inflation, offering returns that outpace inflation over certain periods. Here are some key points to consider:
Gold and silver can serve as a portfolio diversifier, helping to reduce risk.
Silver, due to its abundance, may have less upside potential compared to gold.
Both gold and silver have historically provided a hedge against inflation.
While the after-inflation returns of gold and silver may not always be stellar, considering past investment product performance, they can still play a valuable role in a well-diversified investment portfolio, remaining steady amid inflation uncertainties.
Gold tends to perform well during economic downturns and protections against inflation; studies confirm a positive correlation between the rising cost of living and the value of both precious metals. This ability to preserve wealth becomes particularly valuable during periods of high inflation, increasing their attractiveness as part of an investment strategy.
While the after-inflation returns for gold and silver may not be highly impressive when compared to other investments, rising inflation typically enhances their attractiveness as part of an investment strategy. This context underscores the importance of considering multiple factors – including inflation, market conditions, and personal financial goals – when evaluating the potential returns on your investment in gold and silver.
Making the Decision: Should You Buy Gold or Silver?
So, armed with all this knowledge, how do you decide between gold and silver? The answer isn’t one-size-fits-all. Investors should assess their individual financial circumstances and objectives when considering gold or silver investments, as the suitability can greatly vary depending on personal financial situations and goals.
The choice between gold or silver as a better investment option hinges largely on the individual’s risk tolerance and comfort with each investment strategy. It’s crucial to remember that while both precious metals can serve as hedges against inflation and economic downturns, they also present unique risks and opportunities. For instance, gold’s role as a safe haven asset may appeal to those seeking stability, while silver’s industrial applications and lower price point could attract investors looking for growth and affordability.
Before making the final call, it’s advisable to seek the guidance of a financial advisor to evaluate the appropriateness of gold or silver investments for your portfolio. Additionally, conducting independent research into gold and silver investment strategies can help you make a well-informed decision. Armed with knowledge and guided by your financial goals, you are well-equipped to make the golden (or silver) choice that’s right for you.
Summary
When it comes to precious metals, gold and silver stand as powerful contenders. Their unique characteristics offer distinct advantages for investors, making them an appealing inclusion in a diversified portfolio. Gold, with its safe-haven status, serves as a buffer against economic instability, while silver, with its industrial applications and affordable price, presents growth opportunities and accessibility to investors.
Ultimately, the decision to invest in gold, silver, precious metal mining stocks, or any other asset class should be guided by a thorough understanding of your financial goals, risk tolerance, and market conditions. It’s not about choosing the shiniest option, but the one that aligns best with your investment strategy and financial aspirations. So, whether you’re drawn to the allure of gold or the versatility of silver, remember – knowledge is the most precious asset of all.
Frequently Asked Questions
What factors influence the price of gold and silver?
The prices of gold and silver are influenced by various factors, including global economic stability, inflation rates, currency values, interest rates, and mining supply. Geopolitical events and investor sentiment can also cause significant price fluctuations.
Can I invest in gold and silver without owning physical metals?
Yes, investors can gain exposure to gold and silver without owning physical metals by investing in exchange-traded funds (ETFs), mining stocks, or mutual funds that focus on precious metals.
How does the industrial demand for silver affect its investment value?
The industrial demand for silver, particularly in technology and renewable energy sectors, can significantly affect its investment value. As demand for industrial applications rises, the price of silver may increase, potentially offering capital gains to investors.
What risks are associated with investing in precious metals?
Investing in precious metals carries risks such as market volatility, liquidity issues, and potential losses if prices decline. Additionally, physical metal investments may incur costs for storage and insurance.
Are there any tax considerations when investing in gold and silver?
Yes, there are tax considerations when investing in gold and silver. Capital gains on precious metals may be subject to taxation, and the tax treatment may differ depending on the investment vehicle (e.g., physical metals, ETFs, stocks). A tax professional can help you with this.
How do geopolitical events impact gold and silver prices?
Geopolitical events can have a significant impact on gold and silver prices. Uncertainty and instability often lead investors to seek safe-haven assets like gold, which can drive up prices. Conversely, positive geopolitical developments can reduce demand for safe havens, potentially lowering prices.
What is the best way to track the prices of gold and silver?
Investors can track the prices of gold and silver through financial news websites, commodity exchanges, and market data services. Many investment platforms also provide real-time pricing information for precious metals.
How do central bank policies affect gold and silver investments?
Central bank policies, such as interest rate adjustments and quantitative easing, can affect the value of currencies and influence investor sentiment towards precious metals. Policies that lead to currency devaluation can increase the attractiveness of gold and silver as a store of value.
McCargo initially served as the senior advisor for housing finance at the Department of Housing and Urban Development (HUD) under former Secretary Marcia Fudge. Before that, she was vice president for housing finance policy at the Urban Institute. McCargo also held various leadership positions at CoreLogic, JP Morgan Chase, and Fannie Mae. Under her leadership, … [Read more…]
On December 6, 2023, United Home Loans, Inc. (“UHL”) filed a notice of data breach with the Attorney General of Vermont after discovering that what appeared to be suspicious activity on its computer network turned out to be a cyberattack. In this notice, UHL explains that the incident resulted in an unauthorized party being able to access consumers’ sensitive information, which includes their names, Social Security numbers, driver’s license numbers, government-issued identification numbers, financial account numbers, digital signatures, passport numbers, dates of birth, and birth or marriage certificates. Upon completing its investigation, UHL began sending out data breach notification letters to all individuals whose information was affected by the recent data security incident.
If you receive a data breach notification from United Home Loans, Inc., it is essential you understand what is at risk and what you can do about it. A data breach lawyer can help you learn more about how to protect yourself from becoming a victim of fraud or identity theft, as well as discuss your legal options following the United Home Loans data breach. For more information, please see our recent piece on the topic here.
What Caused the United Home Loans Data Breach?
The United Home Loans data breach was only recently announced, and more information should be available shortly. However, UHL’s filing with the Attorney General of Vermont provides some important information on what led up to the breach. According to this source, on approximately March 15, 2023, UHL detected suspicious activity within its computer network. In response, UHL secured its systems and then enlisted the help of third-party data security specialists to investigate the incident.
The UHL investigation confirmed that an unauthorized party was able to access portions of UHL’s network. It was also determined that some of the files that were accessible to the unauthorized party contained confidential consumer information. The period of unauthorized access was limited to March 15, 2023.
After learning that sensitive consumer data was accessible to an unauthorized party, United Home Loans reviewed the compromised files to determine what information was leaked and which consumers were impacted. United Home Loans completed this process on November 10, 2023. While the breached information varies depending on the individual, it may include your name, Social Security number, driver’s license number, government-issued identification number, financial account number, digital signature, passport number, date of birth, and birth or marriage certificate.
On December 6, 2023, United Home Loans sent out data breach letters to anyone who was affected by the recent data security incident. These letters should provide victims with a list of what information belonging to them was compromised.
More Information About United Home Loans, Inc.
United Home Loans, Inc. is a finance company based out of Westchester, Illinois. UHL provides a range of mortgage options to consumers, including FHA loans, ARM loans, 30- and 15-year mortgages, jumbo mortgages, and VA loans. United Home Loans serves customers in 20 states, with locations in Chicago, IL and Nashville, TN. United Home Loans employs more than 40 people and generates approximately $10 million in annual revenue.
What they sell: Home interiors and seasonal products in a renovated Southside warehouse. Moving to Ooltewah in late spring.
Why you want to shop here: Shoppers will always be surprised by the fun, clever and whimsical gifts, such as hand soap that looks so much like candy that customers have to be warned not to eat it.
Don’t leave without: Finding out what the deal of the day is during the Christmas season.
Photo by Susan Pierce / Genevieve Bond
Genevieve Bond
7680 East Brainerd Road
East Brainerd
(423) 510-0099
genevievebond.com
What they sell: Home decor, fragrances, inspirational books, jewelry, gifts for all ages.
Why you want to shop here: You’ll find all your favorite brands in one location: Bogg Bag, Nest Fragrances, Corkcicle, Barefoot Dreams, Coton Colors and more.