decades

Apache is functioning normally

Explainer

What steps could government take to help mortgage borrowers?

As interest rates rise, cash-strapped households need speedy solutions to meet monthly payments

As rising interest rates put a squeeze on millions of mortgage borrowers there have been calls for the government to intervene. But what could it do to help cash-strapped households?

Improve help with monthly payments

There is government help for those who are really struggling, called support for mortgage interest (SMI). This is available to people who are getting one of a list of other benefits including universal credit and income support. It is not available as soon as you go on benefits and is not a payout but a loan – when you eventually sell your house you will have to repay it. You might also need to repay it if you go bankrupt or enter an insolvency plan. The government could change the terms of this help – it could be available more quickly, or to a wider group of people. Nevertheless, it will probably remain targeted at only the very worst off.

Reintroduce tax relief on mortgage payments

More than 25,000 people have signed a petition calling on the government to let people make mortgage repayments from their salary before it is taxed – a move that could reduce some of the pain by reducing wages taxes. This would not be unprecedented – throughout the 80s and 90s borrowers could claim mortgage interest relief at source (Miras), which gave them tax relief on their interest payments. But the government has already ruled out its reintroduction, saying it does not believe it to be the most effective way to target support to those who need it most. “The tax relief would be of greater benefit to those paying higher rates of tax with the most expensive properties and would only benefit those in employment,” it says.

graphic

Ease rules on interest-only mortgages

Borrowers could cut their monthly costs by switching from a repayment mortgage, which includes paying off the some of the original loan each month, to an interest-only loan. The government and regulators could make this an easy option by scrapping rules which mean that borrowers have to show how they will repay the mortgage at the end of the term. They are unlikely to do this across the board: the rules were brought in after the financial crash to stop people taking on mortgages they could not afford to repay and are considered to have prevented reckless lending. However, regulators have been allowing some borrowers to switch to interest-only without a repayment plan and this is likely to continue to be a strategy (see below).

Continue insisting lenders help borrowers

In December the government told lenders they must do everything they can to support borrowers, including letting them move to interest-only payments temporarily if necessary or switch to a new rate without an affordability check as long as they are up-to-date on repayments. After the 2008 banking crash and during the Covid crisis, lenders exercised this kind of forbearance and repossession rates were kept down as a result. “It is likely the government and regulators will continue with having underlying forbearance measures and encouraging lenders to take an individual approach to borrowers,” says David Hollingworth of brokers L&C Mortgages.

skip past newsletter promotion

Average mortgage rate for two-year fixed deal edges closer to 6% Read more

Target certain groups

The government could target the borrowers most at risk of falling into arrears, says Neal Hudson, a housing market analyst at consultancy BuiltPlace. He suggests these might include those in shared ownership properties who have rising rents to pay alongside their mortgage, those with Help to Buy equity loans who face interest payments on that debt alongside their home loan (currently set at 1.75% in the fifth year and rising each year), and those caught up in the cladding scandal and facing high service charges. In these cases it might not be the mortgage payments that are reduced but the other costs on top could be capped. Many housing associations have agreed to cap shared ownership rent rises at 7%, but the government could choose to make this compulsory and even lower it.

Introduce a mortgage protection fund

Sir Ed Davey, leader of the Liberal Democrats, has revived his call for a £3bn emergency mortgage protection fund, which he first called for in the aftermath of Liz Truss’s disastrous mini-budget. The fund would allow homeowners whose mortgage payments have risen by more than 10% of their income to apply for a £300-a-month grant. “If we don’t give that sort of help to those people, you’d see a spiral down and it will hit the whole economy,” Davey said on Friday. Opponents argue that such a scheme would unfairly help wealthier people who can afford to own a home, to the detriment of tax paying renters.

Order the Bank of England to hold rates

For more than two decades the Bank has been independent of the government – one of Gordon Brown’s first acts as chancellor was to set it free, and since then it has been responsible for setting interest rates. To step in and force its hand would be a big intervention, and is probably the least likely action the government will take at this point.

Topics

  • Mortgages
  • Mortgage rates
  • Mortgage lending figures
  • Bank of England
  • Housing market
  • Property
  • Real estate
  • explainers
Reuse this content

Source: theguardian.com

Apache is functioning normally

While Millennials are delaying or forgoing parenthood at higher rates than previous generations, they’re also leading the way when it comes to adopting pets. During the pandemic, this trend accelerated with 50% of Millennials considering fostering or adopting a pet.

I’m not exempt from the statistics: this past year, I headed down to my local animal shelter and returned home with two senior cats, Annie and Hailey. Annie likes long naps in the sun and Party Mix, and Hailey likes tuna fish and waking me up at six in the morning. At least in my case, there’s a simple reason behind pet ownership: pets can help to make our day to day lives a little bit happier, especially during uncertain times.

What’s Ahead:

Are Millennials adopting pets instead of having children?

Millennials trail behind previous generations when it comes to achieving traditionally “adult” milestones, including purchasing a home, getting married, and having children. According to data from the National Vital Statistics System, in 2019 the general fertility rate in the United States declined to 58.3 births per 1,000 women aged 15 to 44. When Millennials do have children, they tend to be older than first-time parents of previous generations and have fewer children overall.

One statistic where Millenials do lead the way, however, is pet ownership. 27% of Millennials own a pet, and many more have plans to adopt a furry friend in the future. During a time when having children may seem risky or financially out of reach, pet ownership can be a way to approximate the experience of starting a family.

Are Millennials adopting pets at higher rates?

Millennials are adopting pets at a higher rate than previous generations, and they’re also less likely to have children of their own. The causal effects between parenthood and pet ownership aren’t so clear cut, however: many Millennials who adopt pets plan to have babies in the future, with some even considering pets as a trial run for potential children.

In most cases, adopting furry friends isn’t a zero-sum game. Millennials who might not be ready for the financial burden of parenthood may choose to adopt an animal in the meantime, whether they plan to have children in the future or not. They may also view pet ownership as more compatible with other short-term goals, like travel or career advancement.

Thinking about adopting a pet? Here’s what it will cost

Whereas other traditionally adult milestones, like purchasing a home, getting married, and starting a family, can seem frustratingly out of reach, pet ownership is a more affordable and accessible option for many Millennials.

That said, it still comes with a variety of costs and expenses, with an average of $681 for cats and $1,201 for dogs (CNBC) per year. If you’re thinking of adopting a furry friend, you should be sure that you’re in a good financial position to do so.

Are pets cheaper than children?

The short answer is that, yes, pets are much less expensive to raise than children. For young adults who may still be getting their footing financially, adopting a pet is a much lower-cost endeavor than choosing to have a child.

Raising a child can cost tens of thousands of dollars a year for a middle-class family, while caring for an animal may only cost a few hundred. Some of the most significant costs related to raising a child, like increased housing costs and food costs, won’t apply to a pet, since your furry friend doesn’t need their own bedroom and will be perfectly fine eating kibble.

Adoption fees

Adoption fees can vary widely depending on what type of animal you adopt, whether you get them from a breeder or a shelter, and where you live. Purebred dogs can cost hundreds of dollars, while adopting a senior cat from a shelter may cost as little as $25.

Supplies

You’ll need some basic supplies for your pet. If you’re adopting a dog, you’ll need:

  • Dog food and bowls.
  • A leash and harness. 
  • A dog collar to start.
  • A dog crate (depending on the temperament of your new puppy).
  • Training supplies. 

If you’re adopting a cat, you’ll need:

  • Cat food and bowls.
  • A litter box and cat litter.
  • Toys.
  • Cozy beds for them to sleep in.
  • Treats and snacks.

Make sure your pet is covered by pet insurance

Some of the most significant costs you’ll face as a pet owner include vet and health-related expenses. These can range from a few hundred dollars spent on vet visits and checkups each year, to thousands of dollars for emergency treatment.

Because pet health costs can be pricey for life-saving procedures, pet insurance is something you don’t want to skimp on when adopting a pet. This insurance helps to make sure that you’re covered if your pet has a medical emergency, and can save you money in the long run when it comes to expensive vet bills and related fees. 

Lemonade pet insurance

Lemonade’s pet insurance covers diagnostics, procedures, medications, accidents, and illness. If you choose to add on additional wellness coverage, you’ll save on routine and preventative care like wellness exams, heartworm and fecal tests, bloodwork, and vaccines. So really, most treatments your pet requires should be covered through Lemonade!

Prices start at as low as $10 (yup, you heard that right!), and you can save an additional 10% if you also purchase home or renters insurance through Lemonade. The application process is super simple, and you can complete it online or through their mobile app, with no phone call or in-person visit required (perfect for phone-averse Millennials).

Another nice added bonus when it comes to Lemonade is that the company is a public benefit corporation. This means that they donate a portion of their profits to charities like the Progressive Animal Welfare Society and the Humane Society of the United States.

Embrace pet insurance

Embrace covers up to 90% back on vet costs, as well as coverage for accidents, illness, and preventative care. 

One unique perk of Embrace, though, is that they reduce your deductible by $50 each year you don’t receive a claim payment. Unlike some other pet insurance providers, Embrace also automatically covers all your pet’s exam fees, which can be a nice benefit if you make frequent trips to the vet.

As for pre-existing conditions, Embrace does distinguish between curable and incurable conditions and will cover curable ones after your pet is symptom-free for 12 months (this is unique in the pet insurance industry).

Pumpkin pet insurance

Pumpkin offers pet insurance with perks like an optional preventative care package, up to 90% reimbursement, and no upper age limit. With Pumpkin, you’ll get coverage for everything from an annual wellness exam to lab tests and screenings for intestinal worms, heartworm, and tick diseases.

An insurance policy from Pumpkin also includes coverage for accidents and illnesses, diagnostics and treatment, prescription medicine, emergencies, surgeries, and specialized care. You can rest assured that your pet will receive all the care they need to stay healthy, without having to worry as much about the cost. 

Speaking of cost – Pumpkin will offer big discounts for folks with large pet families who insure multiple pets.

Pumpkin Advertiser Disclosure: Pumpkin Pet Insurance policies do not cover pre-existing conditions. Waiting periods, annual deductible, co-insurance, benefit limits and exclusions may apply. For full terms, visit pumpkin.care/insurancepolicy. Products, discounts, and rates may vary and are subject to change. Pumpkin Insurance Services Inc. (“Pumpkin”) (NPN #19084749) is a licensed insurance agency, not an insurer. Insurance is underwritten by United States Fire Insurance Company (NAIC #21113, Morristown, NJ), a Crum & Forster Company and produced by Pumpkin. Pumpkin Preventive Essentials is not an insurance policy. It is offered as an optional add-on non-insurance benefit. Pumpkin is responsible for the product and administration. Pumpkin Preventive Essentials is not available in all states. For full terms, visit pumpkin.care/customeragreement.

Why Millennials may opt for pets over children

There’s no one-size-fits-all reason why anyone chooses to have children or adopt a pet. However, there are some widespread factors that may be contributing to the trend.

Financial instability

Thanks to the effects of the Great Recession, Millennials are likely to accumulate less wealth than previous generations, with real median household income increasing only slightly over the past several decades. Meanwhile, the costs of raising a child have skyrocketed. Middle-class families are projected to spend an average of $233,610 to raise a child born in 2015, with housing, food, and childcare making up a large portion of those costs.

For Millennials worried about affording basic expenses like rent and healthcare, adding a child to the mix can seem financially irresponsible, if not impossible. Many young people may prefer to wait to have kids until they’ve achieved enough financial stability to be able to provide for their children. 

When compared with a price tag in the hundreds of thousands of dollars, pet ownership can seem downright affordable. And while pet owners may splurge on accessories for their animals or have to foot the occasional vet bill, pets remain much, much less expensive than children.

An uncertain future

Even for Millennials who are able to make ends meet and save a little for the future, starting a family can seem like a risky move during an uncertain time. According to a recent study by Morning Consult, 17% of Millennials without children are delaying starting a family because of the COVID-19 pandemic. 15% indicated that they are reconsidering having children at all.

For Millennials worried about the current pandemic, as well as other looming concerns like climate change and growing economic inequality, parenthood can appear particularly fraught. In the same study, 18% of Millennials listed the political and economic climate as a major reason why they haven’t had children, while 13% listed climate change. A significant 38% cited cost as a major reason for not having children.

In contrast, pet parenthood is way up since the start of the pandemic, with 50% of Millennials considering adopting or fostering a pet. In a stressful world full of unprecedented challenges, a furry friend can provide comfort, companionship, and purpose. Especially for young people who have experienced increased isolation as a result of the pandemic, adopting a pet can be a way to cope with loneliness and stress.

Changing cultural expectations

While it’s certainly true that it’s more expensive for Millenials to have children than for past generations, economic and political uncertainties aren’t the only reasons young people may be delaying becoming parents. While marriage and children might have been expected for earlier generations, Millennials may feel less pressure to follow a set path and achieve particular milestones by a certain age.

Instead, they may be more inclined to advance their careers, travel, or pursue personal goals. Young people who might not be ready for the responsibility of raising a child may look at pet parenthood as a low-stakes way to reap many of the same benefits of fulfillment and companionship, while also preparing to have a child in the future.

Summary

With more Millennials delaying kids or opting out of parenthood altogether, pet ownership has emerged as an alternative way to enjoy many of the rewards that come with starting a family. Owning pets isn’t exactly like becoming a parent, but the process does share some similarities: animals can provide comfort and companionship regardless of how many children you might have.

Most people adopt pets simply because it makes them happy and improves their quality of life. That’s definitely true in my case. It brightens my day to have my two little companions follow me from room to room, taking long naps in the sun and never leaving my side for long. For many people, owning pets is one of the unmitigated joys in life, and that’s something to celebrate, even during challenging times.

Read more:

Source: moneyunder30.com

Apache is functioning normally

When people first start dating, they often leave the key issues unresolved. We’ve all swept different issues under the rug in order to keep things running smoothly. But sweeping these problems away is not always a good idea; it’s better to have an honest conversation; that simple, challenging step can save you from a disastrous relationship. It’s important to recognize red flags that signal potential conflicts and know when it’s time to move on. 

In this blog post, we are diving into 14 massive red flags that everyone should be aware of to ensure their relationships don’t end in heartbreak!

1. Isolating You From Others

Photo Credit: Shutterstock.

One user posted, “Any attempt to isolate you from others long term.”

Another user affirmed, “I had a dude friend who got a psychologically manipulative, possessive girlfriend. He stopped hanging around most of his friends…”

Another user responded, “One of my best friends started dating a bikini barista last year. I’ve been able to get a hold of him maybe twice in 12 months.”

2. Forcing You to Give up Friends

Photo Credit: Shutterstock.

One user also shared her first-hand experience and posted, “I was a victim of isolation. It’s a lot like the boiling frog analogy. The changes were so subtle and unnoticeable until it was far too late. On the bright side, I now know what to look out for: never again.”

Another user responded, “Same happened to me. Luckily, I got rid of her and started making new friends, and life is great now. Also, knowing what to look out for is great, so the same will never happen again.”

One user answered the comments, “It’s tough, yo, depression hits me hard too. I think our kind of personality puts us on target for those kinds of people. Stay strong fellow human!” 

3. All Their Exes Were Crazy

Photo Credit: Shutterstock.

One Redditor shared, “If they say all of their exes were crazy/abusive, run.”

One replied, “Can 100% confirm, didn’t know about this til after, but yep all it means is they’re going to blame the other person for everything, and lie, cheat, or steal to make it seem true. Hot or not, just run.”

“Yeah… learned this the hard way myself,” another user responded.

4. They’re the Crazy One

Photo Credit: Shutterstock.

A user also shared, “Came to say this exact thing. Figured it out with the last guy I dated before my husband. He was constantly saying how crazy his exes were… then he spent all night sitting in his car outside my apartment when I canceled a date due to being sick and accused me of cheating when one of my colleagues brought me medicine and walked my dog.” 

5. Won’t Take No for an Answer

Photo Credit: Shutterstock.

A user shared, “They don’t take no for an answer. If you say no and they continue to push, whine, manipulate, cajole, even for something small, walk away. Because if they won’t respect your no on the small stuff they certainly won’t respect or accept it with the big stuff.”

“Too late, already married,” one user answered.

6. Perpetuating Family Dysfunction

Photo Credit: Shutterstock.

Another user responded, “Then do everyone else a favor and don’t have kids. Get a divorce. I’m the child of a couple that made the same mistake and stuck together the whole time because they’re boomers and boomers just don’t know any better. Especially the ones who… [have] children they have zero business having. It ruins lives though and mostly only perpetuates severe mental disorders for even more generations. Do not do it. If you have children and they’re intelligent, they are virtually guaranteed not to appreciate you for it. That’s also something boomers never understood. We learn the truth eventually and realize that what they did was really… irresponsible and then we lose all respect for them. So yeah, know that if you do that, it’ll most likely come back decades later to bite you in the ass.” 

7. Trash Talking

Photo Credit: Shutterstock.

One user shared, “Trash talking about their exes 24/7.”

Another user commented, “People who trash talk as a hobby. No single human in their life is good? Guess what category you’ll be in if you sign up to participate.” 

8. Not Accepting Their Own Mistakes

Photo Credit: Shutterstock.

One commenter shared, “The blind ignorance, when people are incapable of accepting their mistakes and stupidity. Instead they keep lying and believing in themselves no matter what.”

Another user shared, “I’ve been in this situation before. It was bad because not only was she doing what you stated, but she was also manipulative and would try to make you agree with her by arguing to no end. Then she would say [I was] ‘treating her like sh*t’ when I [didn’t] agree with her.”

One user added, “I suppose lots of people have been through it, and how blessed it is when you can easily recognize this, to be honest. In fact, I used to be this sort of person myself. Thanks to righteous and good people who helped me come to consciousness and taught me to be rational. I hope you’re fine and have settled your situation.”

9. Treating Service People Poorly

Photo Credit: Shutterstock.

One user commented, “Treating service staff poorly.”

Another user answered, “*people.”

10. Talking Behind People’s Backs

Photo Credit: Shutterstock.

One Redditor added, “People who complain or say nasty things about friends or coworkers behind their backs. This may seem harmless, or even make you feel special that you are in their confidence, but it means they likely do the same thing to you.”

Another user replied, “But what if Susan really is a dumb b*tch?”

Another user asked, “Or Barbara? Asking the important questions here.”

One user answered, “This isn’t always true . I would 100% moan about a couple of people I had to work with cos they were absolute [jerks] … doesn’t mean I was doing the same to people who weren’t absolute [jerks] though.”

11. Irresponsible With Money

Photo Credit: Shutterstock.

One user posted, “People who are financial disasters.”

Another user confirmed, “Yes. Poor financial management in a long-term relationship is a recipe for disaster. I learned this the hard way, and it took awhile to bounce back.” 

12. Blaming Others

Photo Credit: Shutterstock.

One user commented, “Do they own their mistakes or do they blame others?”

Another Redditor added, “Seriously, though, this trait can tell you so much about a person.”

13. Never Apologizing

Photo Credit: Shutterstock.

One user shared, “I’ve met plenty of people who own up to their mistakes. But, that’s all they do. They think being honest about doing something bad absolves them. They don’t apologize, and if they do, it’s not sincere. They don’t try to make it up. They don’t try to be a better person. And worse of all, they make the ‘mistake’ again.”

14. They’re Always “Just Joking”

Photo Credit: Shutterstock.

One Redditor shared, “When they say something rude and simply play it off with ‘I am just joking’ EVERY SINGLE TIME.”

A second user responded, “They’re NOT just joking. The ‘joke’ for them is that you buy [their] b*llsh*t. They’re laughing inside. Virtually guaranteed.”

Another user replied, “My response, if a truly icy one is warranted, is ‘Odd, I thought jokes had to be funny,’ or asking them earnestly, ‘I don’t get it, explain it?’ which forces them to admit ‘Oh, uh, see it’s funny because he’s fat,’ and admit they’re [a jerk] or to retreat entirely, either way they’re not liable to try that maneuver again.”

Do you agree with the red flags listed above? Share your comments below!

Source: this Reddit thread.

These are 10 Things That Completely Destroyed The Love in a Relationship

Photo Credit: Shutterstock.

There’s no question that relationships can be confusing, but here are some of the top things to avoid if you want to keep your relationship healthy!

10 Actors and Actresses People Refuse to Watch Ever Again

Photo Credit: Shutterstock.

We all have a favorite actor or actress, but most of us have a least-favorite as well. Check out this list of actors and actresses people never want to see performing again!

Top 10 Worst Human Inventions of All Time

Photo Credit: Shutterstock.

Some inventions are world-changing, and some of them, well, they change the world in the wrong ways. Here are some of the worst inventions Redditors could think of.

10 Famous Celebrities Who Look Like They Smell Terrible

Photo Credit: Shutterstock.

We’ve all had moments of hygiene faux pas—but these celebrities just look like they don’t take care of themselves at all.

10 Terrible Fads People Are Glad Died Out

Photo Credit: Shutterstock.

Every fad has its time in the limelight, but some of them come and go faster than others; and some just need to die out right away. Check out this list of fads of which people were happy to see the last.



About the Author



Source: financequickfix.com

Apache is functioning normally

Six years ago, a groundbreaking book on how the federal government succeeded in creating a racially segregated country hit the shelves. In “The Color of Law: A Forgotten History of How Our Government Segregated America,” author Richard Rothstein painstakingly detailed how policies from the government, developers, and mortgage lenders over the past century carved up the country, dictating which race could live where.

The award-winning book changed the conversation about how housing discrimination continues today. People of color who were denied the opportunity to become homeowners decades ago are still suffering the consequences. Unlike their white peers, they were prohibited from building wealth through homeownership, which could have been passed down to future generations.

For his next book, Rothstein teamed up with daughter Leah Rothstein to write about what everyday people can do to combat the legacy of racial segregation. “Just Action: How To Challenge Segregation Enacted Under the Color of Law” was released last month. Leah has a background in working as a community and union organizer and as a consultant to affordable-housing developers and local governments.

Realtor.com® spoke with Leah about how racial segregation persists today and the steps that readers can take to fight housing discrimination. Her responses have been edited for clarity and brevity.

How are the effects of segregation and other forms of housing discrimination apparent in how we live today?

Every metropolitan area in every part of the country is segregated by race today with some neighborhoods that are all or almost all white and some that are all or almost all African American. And this isn’t just a benign separation of people. This is also a separation of resources.

White neighborhoods consistently are better-resourced than African American neighborhoods. They have better-resourced schools, less pollution and lead paint, more grocery stores selling fresh food, more bank branches, more open space, transportation options, and access to jobs.

Because of this segregation of people and resources, Black children who live in segregated neighborhoods grow up to have worse health, educational, and income outcomes than white [children]. They grow up to have higher rates of cardiovascular disease and cancer and shorter life expectancies than whites, in large part because of the neighborhoods in which they live.

Government policies subsidized white homeowners to buy homes in the mid-20th century when homes were affordable. [Government policies also] explicitly prohibited African Americans from doing the same. As a result, those white families were able to accumulate wealth through their homes’ appreciation in value that they could then pass down to their children. [However], African Americans were banned from building wealth in the same way.

As a result, today, while average African American household income is 60% of white household income, average African American household wealth is only 5% of white household wealth. This wealth disparity is due to government policy and continues to limit African Americans’ ability to buy homes and where they can live.

What has changed since ‘The Color of Law’ was published in 2017?

“The Color of Law” demolished the myth that our country is segregated “de facto” or by accident, because of private action or personal preference. Through example after example, my father, Richard Rothstein, demonstrated that segregation was created and maintained by explicit and intentional actions by government at all levels—local, state, and federal—to ensure that Blacks and whites don’t live near each other. Because so many people read that book, that de facto segregation myth has less currency than it once did.

We now better understand the true history of how our communities came to be segregated: through unconstitutional actions by our government. When we understand this, we understand that we have an obligation to do something about it—to challenge segregation and remedy the harms it has caused.

We wrote “Just Action” to provide examples of the dozens of policies and strategies we can pursue on the local level to begin to challenge and redress segregation.

Do you believe that the impact of segregation and housing discrimination can ever be overcome?

Where we live impacts many aspects of our lives, and living patterns are difficult to change. But changing them is not impossible. That’s why we wrote “Just Action,” to show that there is a lot that can be done to have an impact on segregation and housing discrimination. It’s not so overwhelming that we should throw up our hands and do nothing.

In fact, there are many strategies that communities across the country are successfully implementing. We very purposefully focus on what can be done on the local level. We are so polarized on the federal level that we don’t believe we have the federal political will to enact these changes nationally. But we can build that political will locally by talking to our neighbors, learning about the issues, and taking action to change policies and practices.

Furthermore, while the federal government had a large role to play in creating segregation, once segregation was established, it has been mainly local policies that continue to maintain and perpetuate it. Groups working on local issues can have a big impact in challenging segregation by focusing on these local policies.

What sorts of actions can everyday people do to fight housing discrimination and the effects of segregation?

There are many actions we can all take. First, we need to form biracial, multiethnic groups in our own communities. To do that, we need to take the extra steps necessary to overcome barriers to building cross-race relationships. [The groups] can campaign to enact inclusionary zoning policies to require that new housing developments include affordable units and advocate that African Americans have priority to buy or rent those units.

They can support community land trusts, which create permanently affordable homeownership opportunities and can prevent displacement in gentrifying neighborhoods. They can advocate for outlawing discrimination against those who receive federal rental subsidies and then support efforts to ensure that anti-discrimination laws are enforced. They can work with local banks to reform how they calculate credit scores to have a less discriminatory impact on African Americans and provide more opportunity for African Americans to buy homes. They can start or support down payment assistance funds for African American homebuyers.

They can pressure local government and institutions to support fair housing centers to monitor and enforce anti-discrimination laws. They can support legislation to protect renters from unjust evictions and start programs that provide legal counsel to low-income tenants facing evictions. They can advocate for changing zoning laws to allow more diverse and affordable housing options in exclusive communities.

These are just a few of the many examples we describe in “Just Action.” There are many more. Which action a local group starts with will depend on their community’s unique opportunities and challenges, but there isn’t a lack of options for strategies to pursue or support. We just need to get started.

Source: realtor.com

Apache is functioning normally

Zillow has some rather disturbing news for budding academics that could well persuade them to forge an entirely different career path. It says that “entry-level” teachers will need to spend more than half of their salaries on the typical rent in 19 of the 50 largest U.S. metro areas this school year, according to its latest research.

Nationally, it would take 46.8% of a typical starting teacher’s salary to pay the median rent. This improves to 35.6% for a mid-career teacher – still above the generally accepted 30% threshold for housing costs to be considered affordable – and 26.6% for the highest-paid teachers.

Starting teachers literally cannot afford the typical home or rental in San Francisco or San Jose – median payments are greater than 100% of a starting teacher’s salary in both metros. Finding a roommate or moving back in with parents may be the only option for these teachers. Indeed, a previous analysis from HotPads, a Zillow Group-owned apartment search platform, found that San Francisco renters can save more than $1,000 a month by living with roommates.

But it is not only the most expensive markets where teachers are cost burdened. New teachers spend greater than half of their income on market rate rent in some broadly affordable metros like Salt Lake City, Minneapolis and Raleigh.

Of the 50 largest metro areas, only Pittsburgh offers affordable rent for starting teachers. And even the highest-paid teachers would find the typical rental affordable in just over half of large metros.

“Most acknowledge that building more homes is required to address the root cause of eroding housing affordability. Without that new influx to take the pressure off rent and aggressive home value growth, it’s the public servants, like teachers, fire fighters, and nurses – the professions that keep us safe, our kids smart, and our families healthy – that often feel the pinch most,” said Skylar Olsen, Zillow’s director of economic research. “So don’t think of housing affordability policies as a choice between change and the status quo. Crowded, job-rich communities will change — and it will be either the buildings that change or the mix of people who can afford to live in them.”

Teachers who own a home are in a better position, due in part to the benefit of low mortgage interest rates and decades-long terms that lock in payments even as home prices rise.

Starting-level teachers pay 26.6% of their income for the typical mortgage payment nationally and spend less than 30% of their income in 31 of the 50 largest metros. The highest-paid teachers can afford mortgages in all but the four most-expensive metros in California. An additional chunk will come out of households’ income for property taxes, homeowner’s insurance, and common homeowner maintenance, but even after those expenses, ownership is still more affordable in many markets. All of this presumes, though, that they have managed to put 20% down.

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]
Latest posts by Mike Wheatley (see all)

Source: realtybiznews.com

Apache is functioning normally

You may have heard the good news: In recent weeks, several mortgage and real estate brokerage execs have exclaimed that we may have already reached the bottom of the market. For prospective home buyers and sellers, that could mean a gradual decline in mortgage rates, which would unlock inventory and—dare I say—sales activity. 

But there are still ultra-competitive markets in America where those conditions will simply be offset by rising prices. 

You may have seen a picture making the rounds on Housing Twitter and LinkedIn recently. It shows about 50 people waiting in line at an open house in Mount Laurel, New Jersey. The house ended up having five offers and sold for $50,000 over ask. 

In much of suburban New Jersey, where new construction is rarer than cheap Bruce Springsteen tickets, the pandemic-era conditions never left. There’s still plenty of money and demand emanating from New York City and Philadelphia and very little inventory. I mean very little inventory.

In New Jersey, the median list price last week of a single family home checked in at $565,000, according to Altos Research data. In May 2020, it was $425,000. Single family inventory last week fell to 8,556; three years ago it was 21,874.

This has serious consequences for real estate agents and loan officers alike, since it’s usually a zero sum game. You land the client and get a commission, or you don’t and you get bupkis.

“I sent pre-approvals two-to-three times a day, and then there are 30-plus offers on the homes and I virtually never get contracts,” one veteran loan officer told HW in late March. “One home recently had over 60 offers! Incredibly frustrating, and I know and have spoken with multiple $100 million-per-year originators/friends who are writing nothing here as well.”

If mortgage rates were to fall into the 5% range and stay there for a period, I think we’d see some supply shake loose in New Jersey. But for markets like suburban New Jersey, the demand will still vastly exceed the supply for years to come. There’s simply no easy or fast way to overcome two decades of underbuilding, NIMBYism and poor housing policies. It’s great for existing homeowners whose properties become more valuable due to scarcity. But it’s bad for everyone else, agents and loan officers included.

According to Altos data, the housing fever is even higher in Rhode Island, Massachusetts and Connecticut. In Connecticut, single-family inventory has dropped 80% in the past six years while prices have increased by 44%, according to data from the Federal Reserve Bank of St. Louis. And this is just the Northeast – try finding a home in Los Angeles for under $1 million.

What’s it like in your neck of the woods? Share your story with me at [email protected] and we’ll look at supply and demand in your market.

DataDigest is a newsletter in which HW Media Managing Editor James Kleimann breaks down the biggest stories in housing through a data lens. Sign up here! Have a subject in mind? Email him at [email protected]

Source: housingwire.com

Apache is functioning normally

Imagine it’s 30 April 1989. You just came into a hundred grand. You plan on investing this money for the next 20 years. Where do you put it?

Here are four options. No need to look them up on Morningstar (in fact, that would be cheating for today’s exercise). Just glance at them and choose which of the four you think would have been the best place for your money over the past two decades.

  • Fidelity International Discovery (FIGRX): Invests in larger companies headquartered outside of the U.S., mostly in developed countries.
  • Fidelity Real Estate Investment (FRESX): Invests in real estate investment trusts (REITs), real estate operating companies (REOCs), and small pigs (RUNTs). Just kidding on that last one.
  • Vanguard 500 (VFINX): An index fund that seeks to mimic the performance of the S&P 500 index of generally large U.S. stocks.
  • Vanguard Small-Cap Index Fund (NAESX): An index fund that seeks to mimic the performance of the MSCI U.S. Small Cap 1750 Index of small to middle-sized U.S. stocks.

Go ahead and choose one, and just one. Where would you have committed your money for the past 20 years? Got one? Great. Now, let’s see how they each performed since 30 April 1989, and how much your $100,000 would be worth today.

Fund Avg. Return $100K Turned Into…
Fidelity International Discovery 6.41% $346,605
Fidelity Real Estate Investment 8.13% $478,046
Vanguard 500 7.52% $426,704
Vanguard Small-Cap Index Fund 7.44% $420,637

Source: Morningstar Principia software, 4/30/1989-4/30/2009

Did you pick Fidelity Real Estate Investment, the fund with the highest return? My guess is you didn’t, not after what has happened in the real estate markets over the past few years. Perhaps you picked Fidelity International Discovery, since somewhere in the back of your mind is the recollection that international stocks beat U.S. stocks every year from 2002 to 2007. But that was the lowest-returning of our choices. And while it lost to the real estate fund by just 1.72% a year, that disadvantage resulted in $131,441 less wealth — an amount greater than the original $100,000 investment. Compound small amounts over many years, and you’re talking big bucks.

The power of diversification
Now, when I asked you to pick just one of these investments, you may have resisted. “I would never invest all my money in just one fund,” you might have said. “That’s too risky.”

You’re so smart.

But while you know that diversification lowers risk, did you know that it can also boost returns? Let’s see by creating a portfolio that is invested 25% in each of the aforementioned funds, and rebalance it annually. What do you think the average annual return on this portfolio would have been? Where would it rank among the returns of the four funds?

You can attempt to come up with an answer by doing a little math: Add up the returns of the funds and divide by four. That would give you 7.35%, which would have lagged all the choices except the international fund.

But here’s the real answer: The four-fund portfolio, rebalanced annually, would have earned an average 7.81% a year, turning $100,000 into $450,279. That beat three of the four choices; the sum exceeded most of the parts, so to speak.

How did that happen?

A bit of balance
While each of the funds posted similar long-term returns, they often rose and fell in different degrees, at different times. This didn’t happen each and every year; 2008 is a recent and painful example of how many investments can move in the same direction (i.e., down) at the same time. But looking over many years, some of these funds zigged while the others zagged.

Throw in some rebalancing — which entails selling what has done relatively well to buy what has not — and you’re often getting out of a hot asset class before it turns cold, and getting into a laggard that’s ready to become a leader. In fact, studies indicate that rebalancing annually is generally too much. Had we rebalanced our hypothetical portfolio every three years (something I can’t do with the otherwise excellent Morningstar software I used to run these numbers), I think the return of the four-fund portfolio would have been a tad higher.

Yes, it lagged the No. 1 performer (the real estate fund). But here’s the real beauty of asset allocation: You don’t need to identify what will be the very best investment (which is pretty hard, if not impossible). No fortune-telling skills are required. You get very respectable returns without paying a psychic or selling your soul.

Final notes
Finally, I’ll point out that I’m not recommending this exact portfolio or these exact funds; they were chosen because they have long-enough histories to examine (though I will say that I am partial to index funds, and own shares of the Vanguard 500). This is just an illustration of a neat little asset-allocation trick, which also works when you switch up the investments (as shown in this longer-term illustration).

A real-life portfolio should have even more assets, including bonds if you’re financially conservative or within a decade of retirement. But that’s a topic for another day.

For more investing information, check out The Motley Fool’s Rule Your Retirement service.

Source: getrichslowly.org

Apache is functioning normally

There are three levers that can help to ease housing affordability heading forward: Falling mortgage rates, falling home prices, or rising incomes. Due to financial market volatility, mortgage rates are always the lever that can have the biggest impact in the short-term.

A new housing report put out by Morningstar expects mortgage rates will indeed be the primary lever that helps to ease housing affordability.

As of Friday, the average 30-year fixed mortgage rate tracked by Mortgage News Daily stands at 7.14%. Morningstar expects that’ll trend down in the second half of the year, and we’ll average 6.25% for 2023. Morningstar’s forecast model then expects mortgage rates will average 5.00% in 2024 followed by 4.00% in 2025.

“The Fed has engineered a massive increase in interest rates in order to combat high inflation. We expect it to cut the federal-funds rate aggressively in the coming years, driving the [Federal funds] rate down from 5% currently to below 2% by 2025,” wrote economists at Morningstar. “Once the Fed wins the battle against inflation, its priority will shift to jump-starting economic growth, which will require much lower interest rates, in our view.”

Long-term, Morningstar expects mortgage rates to remain low. They cite factors like an aging population and slowed productivity growth that’ll put downward pressure on long-term rates, like mortgage rates.

“Regardless of what happens in the next few years, we expect interest rates to ultimately settle back down at the low levels that prevailed before the pandemic. The low-interest-rate regime will resume once the dust settles from the pandemic economic volatility,” wrote Morningstar. “Our long-term interest-rate projections are driven by secular trends. Factors such as aging demographics, slowing productivity growth, and increasing inequality have acted to push down real interest rates for decades, and these forces haven’t gone away.”

Economists over at Morningstar also expect the other two levers to help out: rising incomes and falling home prices.

“Our revised home price forecast now projects new- and existing-home prices to decline 6% and 4% over 2022 to 2024, respectively,” wrote economists at Morningstar. They call their prediction a “mild correction,” adding that a steeper decline in home prices would be prevented by the fact that “inventory of existing homes for sale remains below pre-pandemic levels.”

Among forecasters, Morningstar is on the low side when it comes to mortgage rates. Heading forward, the Mortgage Bankers Association and Fannie Mae expect the average 30-year fixed mortgage rate to end 2023 at 4.9% and 5.6%, respectively. Moody’s Analytics expects mortgage rates to drift down to 6% by late 2024, and to 5.5% by the end of 2025.

On the price front, Morningstar is on the bearish side. Firms like Zillow and CoreLogic think national house prices will rise 5.0% and 4.6%, respectively, over the coming 12 months. Moody’s Analytics doesn’t think the bottom is in, and expects a peak-to-trough decline of around 8% for national house prices.

When it comes to mortgage rate and home price forecasts, it might be best to take them with a grain of salt. Uncertainty in the economy makes it hard to predict both mortgage rates and house prices.

Want to stay updated on the housing market? Follow me on Twitter at @NewsLambert, or on Threads at newslambert.

Source: fortune.com

Apache is functioning normally

I don’t want to dump on your boss. She/he/it gives you a job (assuming you still have one). Besides a paycheck, you also get some benefits. One perk might be a retirement plan such as a 401(k). Your boss doesn’t have to do that; in fact, it would be easier on her/him/it if there were no plan, since such things cost money, take up time, and expose the company to lawsuits.

So I want to start by commending your company for sponsoring a plan.

That said, there’s been a disturbing trend over the past several years: Companies are shifting more of the cost of the plan onto their employees, and not necessarily being up front about it. One of the brave souls exposing this practice is David Loeper, a certified investment management analyst and the author of Stop the 401(k) Rip-Off.

How did Loeper come to take up the rallying cry for 401(k) reform? Here’s what he told me in an interview:

It was time to put our 401(k) plan up for bid and look for competing vendors, and I got the typical sales proposals. They would say things like, “Hey, we can save you all of your administration costs if you use our expensive funds. And you don’t have to pay that, your employees do. We are going to hide the expenses from the employees so they don’t see them, save the company a bunch of money, and people won’t know they are getting ripped off. Isn’t that a nice deal?”

Well, I got ticked off when I got those presentations because we don’t want to rip off our employees. We are honest with them.

So I went through my last five years’ worth of statements from our prior 401(k) vendor. There is a column that says “Expenses,” and for five years it has shown zero in that column. Four times a year I get a statement that says I am not paying any expenses. [But then I looked through] some stuff like the summary annual report, and I figured out that I was paying $1,500 a year. I thought, “This is nuts!” I was paying 130 basis points [1.3% a year] to be in index funds.

Loeper’s experience isn’t unique. A study by the Government Accounting Office [PDF] found that an increasing number of employers are making employees pay more. These additional fees can take a huge bite out of your retirement savings. According to the GAO, paying an additional 1% a year can reduce your nest egg by 17% after two decades.

How can you determine if your employer-sponsored plan is beleaguered by hidden fees and kickbacks? Take these four steps.

1. Look at the Expense Ratios of Your Mutual Funds.

The expense ratio is the percentage of your assets that are withdrawn by the mutual fund company to pay for management and administrative costs. It should be found on your plan’s website or other information made available by your employer. Ideally, you shouldn’t be paying more than 1.0%, unless it is an exceptional fund.

Keep in mind that the expense ratio listed on a fund-information website, such as Morningstar.com, may not necessarily be the expense ratio you’re paying. Extra administrative costs may be added to the funds in your plan (which we’ll discuss in the next step).

Finally, we should note that the expense ratio for any mutual fund — whether in your 401(k) or elsewhere — doesn’t capture all the costs you’re paying. The biggest missing expense is commissions the fund pays to buy and sell investments, which are disclosed in the “statement of additional information.”

As un-thrilling as it might be to read such a document, you can get a rough idea of how much your fund is paying in commissions by looking at its “turnover,” which tells how much of a fund is bought and sold over the course of a year. For example, a turnover of 80% means that 80% of the fund’s investments have been sold (or “turned over”) in the past year. The higher the turnover, the more the fund pays in commissions. Ideally, look for funds with turnovers less than 50%. Not only will this reduce commissions, but many studies have found that low-turnover funds, as a group, outperform high-turnover funds.

2. Ask Your Human Resources Department

Next, you’ll want to know how the administrative expenses of your plan are paid. Your employer might be picking up the total tab — or it might be withdrawn from each employee’s account. This could be a fixed amount (e.g., $300 for each participant) or a percentage of assets.

If you trust that the folks in your HR department will give you reliable information, ask them how much the plan costs and who pays the bill. They should be able to find out that information, and provide some documented proof.

3. Look at Your Summary Annual Report

If you want to investigate the plan expenses yourself, request a copy of your plan’s Summary Annual Report, Summary Plan Description, and/or Fee Arrangement — essentially, any plan documents your employer will give you. As you scan the documents, you’ll learn all kinds of good stuff about your plan, and it might spell out explicitly whether you or your boss covers administrative costs.

If not, then you might have to do a little math. Let’s look at the example Loeper provides in Stop the 401(k) Rip-Off, based on his own (former) 401(k) plan.

In his Summary Annual Report, under the “Basic Financial Statement” section, Loeper learned that there were $11,304 in additional expenses. By dividing that amount by the total value of plan assets ($1,341,870), he calculated that his plan has an additional 0.84% in fees. After adding that to the expense ratios of his funds, he discovered that he was paying 1.3% a year to be mostly in index-based investments. That’s way too high.

4. Evaluate Your Investment Choices

Retirement plan providers don’t just get money from you. They also receive money from mutual fund companies to include their funds in your 401(k). These so-called “revenue-sharing agreements” (a.k.a. bribes) might entice a plan provider to stock your 401(k) with funds that will make the most for them, not for you. The solution is to match your investment choices up against a relevant index. If your funds consistently underperform, then you know you have sub-par choices.

What You Can Do

If your employer-sponsored retirement plan is the pits, you have several options:

    • If you no longer work at the company, transfer the money to a low-cost IRA.
    • Many retirement plans offer a brokerage window, which allows employees to buy individual stocks, exchange-traded funds, and other mutual funds.
    • Some plans allow for in-service distributions, which allow employees to transfer money to an IRA while still working for the company.
  • Your company may have a benefits committee, or at least a group of folks who occasionally think about the retirement plan (typically, the human resources folks and perhaps the CFO). You can agitate for better investment options, a brokerage option, or even a completely different plan.

Stop the 401(k) Rip-Off has some great advice for how to rally your colleagues around the cause of a better plan. Over at The Motley Fool, we’ve created a sample letter to send your benefits director. After all, their retirement is on the line, too. They may need just a small nudge to improve the plan.

J.D.’s note: In 1995, we set up our employee retirement plan at the family box factory. For the first few years we used SmithBarney to manage our investments. Then we noticed they were killing us with fees, both obvious and hidden. We said good-bye to them and now managed the retirement accounts in-house using Vanguard funds. This isn’t practical for every business, but we only have about ten employees, so it works. I guess what I’m saying is: Brokamp has some great points in this article.

Source: getrichslowly.org