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Representatives Donald Norcross (D-NJ) and Tim Walberg (R-MI) have introduced a bill in Congress to allow the default inclusion of annuities in 401(k) plans. If signed into law, it would functionally raise the profile of annuities, allowing individuals to hold large investments in this asset class based on the overall contributions to their 401(k) plans. Here’s what you should know about the bill and whether it’s an option to consider.

Consider working with a financial advisor as you plan out your retirement.

What the Bill Would Do

Currently entitled a bill “[t]o amend the Employee Retirement Income Security Act of 1974 to permit default investment arrangements in annuities, and for other purposes,” it is an updated version of a substantially similar bill from 2022 known as the Lifetime Income For Employees (LIFE) Act. If passed, it would allow employers to include annuities as a default investment option in employer-sponsored retirement plans such as 401(k)s.

Specifically, the bill would classify a certain type of annuity contract as a QDIA, or “qualified defined investment alternative.” In practical terms, this means that employer-sponsored retirement plans could automatically invest a participant’s money in a qualified annuity contract as well as more well-known assets like a stock portfolio. This would expand on steps already taken in last year’s SECURE 2.0 Act, which increased the overall footprint that annuities can have in a retirement portfolio by raising the cap on how much individuals can contribute to annuities with their tax-advantaged retirement accounts.

How This Bill Would Work

This bill limits plan contributions to 50%. This means that, if an employer does choose an annuity contract as their 401(k) plan’s default option, the plan can only invest up to half of a participant’s contributions in that contract. The rest must be invested in other assets such as stocks, bonds and funds. This is meant to ensure diversification in a participant’s portfolio.

Plan participants also must be allowed to opt out of the annuity contract within six months of being opted in, and the plan must explain their investment alternatives. This would apply both to new enrollees, such as a new hire, and to plan changes, such as if the employer restructures the company’s retirement plan in favor of annuities. In either case, each employee will have 180 days in which they can withdraw from the annuity without fees, penalties or any other charges. After that window, the plan can include delays and even surrender penalties if an employee chooses to withdraw from annuity investments.

This opt-out provision is where the updated LIFE Act particularly mirrors SECURE 2.0. That law allows employers to make retirement plan participation the default, giving employees the option to opt out of making contributions if they choose. That changed the current system, in which employees are left out of workplace retirement plans by default and must opt-in. Finance experts have found that opt-out systems increase participation substantially, as employees are much more likely to stay in a plan than they are to seek out participation.

The newly introduced bill would expand on that, allowing employers to automatically enroll their workers in a retirement plan that uses annuities as a default investment, with those participants then given the option to select another investment or stop contributing to the plan as a whole.

Pros and Cons The Bill

If this bill passes, individuals should make sure to carefully consider the potential benefits and drawbacks of annuity investments. The main benefit to annuity investments is its certainty. A standard lifetime annuity is an insurance policy that guarantees fixed payments, typically issued every month, starting in retirement and lasting for the rest of the participant’s life. As a result, it is not subject to the vagaries of market volatility, and it allows for confident financial planning. Participants know what they will receive, when they will receive it and for how long.

Annuities have their risks, though. In particular, they tend to post lower returns than the market at large, meaning that investors usually get a lower return on investment off an annuity contract than an S&P 500 index fund. They can also be fairly expensive, often charging high administrative fees. And, of course, there is always the edge-case risk that the company issuing the annuity contract might go out of business, forcing a risky question of who will hold up their end of the bargain in your retirement.

What’s more, despite its name, the updated LIFE Act does not require employers to select a lifetime annuity. Per the legislative text of the 2023 bill, the selected contract must make payments “for a fixed term or for the remainder of the life of the participant [and spouses or beneficiaries].” Retirement savers should review any plan carefully to make sure that the annuity their employer selects is a lifetime asset, or at least one with appropriate duration.

Annuities can be an excellent retirement vehicle, but make sure they meet your long term goals and needs.

Bottom Line

Recently proposed legislation would allow employers to use annuity plans as a default investment in 401(k) and other employer-sponsored retirement accounts. The goal is to create a functional system of private pension accounts for workers. Whether it makes sense for you depends on the specific terms of your 401(k) and what your particular retirement needs are.

Retirement Planning Tips

  • A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.­­
  • Are annuities the right investment for you? If your employer is going to start making this hybrid pension product the default choice in your 401(k), it might be time to learn all about how this investment class works and whether it’s a good fit for your plans.

Photo credit: ©iStock.com/shapecharge, ©iStock.com/tadamichi, ©iStock.com/FG Trade

Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.

Source: smartasset.com

Apache is functioning normally

This hugely popular interior design style has taken over homes and apartments in recent years.

If you’ve watched HGTV at any point in the last decade, you’ve likely noticed one interior design style climbing the charts in popularity. Thanks to influential home designers like Chip and Joanna Gaines and their show “Fixer Upper,” the modern farmhouse style has become one of the biggest design trends of the 2010s. Since 2015, its popularity has especially skyrocketed, taking over home design shows and social media.

But what is modern farmhouse style, exactly? We break this chic, trendy interior design style down for you and also show you how you can incorporate it into your own apartment.

What is modern farmhouse decor?

As the name suggests, modern farmhouse is essentially a contemporary spin on the rustic farmhouse look. It blends country style with more modern design trends like minimalism, creating a space that feels both cozy and warm yet sophisticated and chic at the same time.

Classic farmhouse design features like wood accents, natural materials and gabled roofs are reexamined through a modern lens, utilizing smooth lines, neutral colors and minimalist decor. Decorations and furnishings are typically more vintage and antique, in keeping with the traditional, country-style aesthetic.

A big part of modern farmhouse design is also the use of salvaged materials like reclaimed wood or metals. You’ll notice some design similarities between other cozy, country-style interior design trends like shabby chic or coastal grandmother. But with modern farmhouse, the emphasis is more on sleek, contemporary cuteness rather than classic glamour.

Even if you don’t have an entire house to redo in the modern farmhouse style, its interior design is easy to replicate in any space, especially apartments. If you have a high-ceilinged, contemporary apartment with white walls and plenty of light, you can easily redecorate it as a modern farmhouse by utilizing common design features like those below.

Common design features of modern farmhouse

Curious about what design characteristics define the modern farmhouse look? Here are some style and decor elements that show up often in modern farmhouse interior design:

  • White walls
  • Neutral or warm color palette (gray, beige, cream, silver, sage)
  • Natural wood accents
  • Reclaimed wood
  • Industrial light fixtures, furniture accents, decor (black metal, wrought iron)
  • Vintage and antique accessories
  • Wide-plank wooden floors
  • Cursive print on artwork, pillows and other decor items
  • Country/barn style (sliding doors, high ceilings)
  • Minimalist spaces (not a ton of clutter)
  • Big, comfortable contemporary furniture
  • Organic, natural materials and tones
  • Sleek, smooth lines

Where to find examples of modern farmhouse decor

If you want to see more examples of modern farmhouse decor, check out the following TV shows and social media accounts to learn more:

5 items to have in your apartment for the modern farmhouse look

Thanks to its massive popularity, it’s easy to find modern farmhouse decor online at sites like Amazon. If you’re looking for how to start outfitting your apartment in the modern farmhouse aesthetic, these five items will set you on the right path.

Black metal candle lanterns

Image Source: Amazon.com

Use these chic black metal candle lanterns either inside or outside, with the black metal contrasting nicely against your white walls.

Jug vase set

Image Source: Amazon.com

Jugs and vases show up often in the modern farmhouse school of design, blending rustic farmhouse style with sleek, contemporary shapes. With its glossy sheen and tan, neutral colors, this jug set will look right at home in any modern farmhouse apartment. Fill them with eucalyptus bunches or pampas grass to complete the look.

Rectangular black metal chandelier light fixture

Image Source: Amazon.com

Contemporary chandeliers and statement light fixtures in non-traditional shapes like circles or rectangles show up often in modern farmhouse homes. With its penchant for high, vaulted ceilings, these types of light fixtures both fill the space and add design elements for the higher reaches of your home.

The use of black metal and geometric shapes are usually the go-to, drawing the eye and creating a more interesting visual in what would otherwise be dead space. This rectangular black metal fixture will look great over a kitchen island or long table.

Textured throw

Image Source: Amazon.com

Complement your couch or chairs with this cozy, rustic beige throw. The simple pattern and texture scream farmhouse, while the soft beige color matches modern farmhouse’s trademark color palette of white, black and tan.

Ceramic utensil holder

Image Source: Amazon.com

Looking like an old-fashioned tin can, this ceramic utensil holder brings a rustic, country-style element to your kitchen space. You can also use it as a decorative vase instead.

Turn your apartment into a modern farmhouse haven

Now that you know all about modern farmhouse style, you have all the tools to transform your apartment into a chic, trendy space. Still looking for a place to recreate your own farmhouse? Start here.

When you buy through links in this article, we may earn an affiliate commission.

Source: rent.com

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For some of us, stepping outside of our interior decor comfort zones can be as nerve-wracking as chopping off your hair. So different! So defining! So permanent! Eeeek cue cold feet setting in! There’s no doubt that selecting furniture is a draining task as it is, so when it comes to trying something a little more adventurous, it’s often easy to chicken out and stick with what you know. If you are a furniture commitment-phobe like us, here’s a way to incorporate some boldness into your decor without going over the top: accent chairs!

Chairs are like the jewelry for your room. They allow you to play with trends, color, texture or avantgarde styling without going all in. Going bold with your chair selection will give an otherwise classic space the interest and originality you’re craving without being overpowering!  We love the funky, lip-like look of a Bertoia Diamond chair nestled in a bright corner HALLO!. Or the clean lines of a Scandinavian inspired design – beautiful enough to make a statement yet calm enough to sit in a room full of neutrals. And since every room deserves a sweet-looking seat, here are some statement chairs that we’re dying to sit our booties in!!

Get Your Shop On:

> 1 Black Tufted Leather ‘Major’ Chair
> 2 Rod + Weave Copper and Leather Chair
> 3 Brass + Fur Ansel Chair 
> 4 Pollock Arm Chair
> 5 Light Grey Velvet Accent Chair
> 6 Saxe Oak + Leather Chair
> 7 Hans Leather Chair
> 8 The Circle Chair

They’re all so good, we couldn’t possibly choose a favorite. Which one would you love to put in your home? And if you’re looking for even more side chair inspo, click HERE.

image 1 via Apartment 34 // 2 via Nordic Design // 3 via Blueberry Modern // 4 via J. Ingerstedt // 5 via Vogue Paris // 6 via Joseph Dirand  // 7 via Lonny // 8 via Muuto //  9 via Design Files

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Source: apartment34.com

Apache is functioning normally

I am constantly changing. While many people are much the same today as they were yesterday (or last week or twenty years ago), I’m always evolving. This isn’t necessarily good or bad — it’s just who I am. Some of my friends think I’m fickle. I get that. (Kris tells me that I go through “phases”.) I prefer to view this constant change as growth. I don’t want to be the same person tomorrow as I am today. I enjoy the evolution.

But this continued growth creates complications. For one thing, it’s difficult for the Present Me to predict what the Future Me will like. Sometimes I’m right — but sometimes I’m wrong. (It’s not just me. Happiness expert Daniel Gilbert says that people are surprisingly bad at guessing what will bring them joy.)

Over the past couple of years, a variety of forces have been acting on my mind, subtly forcing me in new directions. (Mental glaciation!) I’ve been traveling. I’ve been reading. I’ve been talking to folks with unconventional lives. Pressure has been building. Then, earlier this month, the World Domination Summit burst things open. Now I find that I’m eager to shake up my current life and try something new.

I want to meet new people and see how they live. I want to see natural wonders — and man-made wonders, too. I want to try new food. I want jump out of airplanes and swim with the sharks, trek over mountains and get lost in the jungle. (But not too lost.) I want to taste the world.

And so, I came home one night last week and announced, “I don’t want to live here anymore.”

Dream House

Kris and I own an 1800-square-foot farmhouse set on two-thirds of an acre. Our land is park-like: We’re surrounded by trees and shrubs, and we’ve spent the past eight years building a food-producing garden filled with herbs, vegetables, berry canes, and fruit trees. Despite the rural feel, our home is located in a typical suburban neighborhood about fifteen minutes from downtown Portland, which makes the place unique. (“I’ve never seen a property like this,” our real-estate agent told us when we first toured the house.)

When we bought this house in 2004, it was my dream home. I fell in love with it instantly. I’d always wanted to live in an old farmhouse, a place with charm and character. I was so emotionally invested in the house that I was willing to make a poor financial decision to buy it. (Thus setting into motion the course of events that would lead to my financial nadir and, eventually, the creation of Get Rich Slowly.)

Over the years, though, the house has become less of an oasis and more of a chore. Today, it seems like a burden. Yes, the yard is beautiful, but it requires constant maintenance. I’d rather be writing than pruning shrubs. And ninety minutes to mow the lawn? Ugh. Plus, the house itself seems too big for two people — even with all of our Stuff. We have whole rooms we rarely use. In short, this is no longer my dream house.

I’ve made oblique references to this problem for years now. (And sometimes, in the comments, the references have been decidedly non-oblique.) But until recently, my discontent has never taken any form other than mumbling. Now, though, I feel moved to action.

No Quick Fix

Unfortunately, it’s not easy to simply say “I don’t want to live here anymore” and move on to someplace new. Selling (or buying) a home is a huge undertaking. There are many things to consider.

For one, I’m not sure what I really want. I know what I don’t want — which is this house — but I’m not sure where I’d rather live. An apartment? A smaller house? In the country? In the city? It’s tough to choose something different when you don’t actually know what you want.

Also, the Stuff is still an issue. Yes, I’ve been slowly purging things for the past four years, but I still have way too much. I still feel overwhelmed. (This is primarily because my definition of “needs” keeps shrinking. I mean, I can live out of a single carry-on suitcase for a month when I travel. Why do I need rooms filled with Stuff when I’m home?) If we’re going to move, I don’t want to take all of this with me.

Note: One idea that appeals to me: Move to a smaller place, but only take the bare essentials. Then, for six months (or a year or whatever), whenever we need something from the old house, move it over. At the end of six months, sell whatever hasn’t been moved and sell the old house.

And, of course, there are financial ramifications. Does it really make sense to sell in this market? I’m fortunate to be in a position that allows me to work from anywhere. Kris has a job that she loves, though, and it’s tied to a specific location. How do we account for this? (Also, what about the costs of my proposed travel?)

But the biggest reason Kris and I don’t just pick up and move to someplace smaller is that she still loves our home. This is her dream house. I’ve changed; she hasn’t. I may be unhappy here, but she’d be unhappy moving elsewhere — especially when I don’t even know what it is I want.

Thus, there’s no quick fix to this situation. I remain discontented.

Stumbling Toward Happiness

I’m not sure what we’ll do in the long-term. This isn’t one of those posts where I describe a problem and then share a solution. We haven’t found a solution. Instead, after a couple of talks, Kris and I have decided on some stop-gap measures:

    • I will explore solo travel. It may be that I won’t even like extended travel alone. It appeals to me right now, but what if I hate it? There’s no way to know unless I try. So, for the rest of the year, I’m going to head out on a series of personal adventures. (Thanks to the many GRS readers who have written with advice and offers to host me, by the way. You’re very kind.)
    • I’ll hire somebody to do the yardwork I’m neglecting. It pains me to pay for this, but I have to face reality: I hate doing yardwork. I’d rather be writing and/or traveling. (And besides, the writing makes me money.) I’ll do what I can around the house, but hire somebody to do the rest. This will require giving up my comic-book habit, but I’m okay with that. I’d rather travel.
    • I’ll be more diligent about purging my Stuff. As Adam Baker can attest, my workshop is filled with books and magazines and games and outdated electronics. There’s no need for me to keep all of this. Instead of just thinking about it, I need to actively shed this physical (and mental) baggage.

These are first steps. They’ll buy us time while I’m trying to discover who I am and what I want to do. If I’m still feeling oppressed in the winter or the spring, Kris and I will explore other options. Though, to be honest, I have no idea what those options might be.

Recently, Tammy Strobel from Rowdy Kittens offered an hilarious solution. Tammy and her husband are building a tiny house. She suggested that I could build a tiny house and put it in the middle of our huge lawn. “Then you could have what you want and Kris could have what she wants,” Tammy said. Clever. We’re not to that point yet, but who knows? Maybe next year at this time, I’ll be living like a gypsy in the middle of our yard.

Source: getrichslowly.org

Apache is functioning normally

California newspaper The Daily Breeze recently published an article about a man who was issued a $35 ticket for failing to come to a complete stop, which became a $234 ticket after added penalties. (State legislators have been adding new penalties, such as a “state conviction fee,” since 2009, thanks to a $10 billion budget deficit. The base fine for running a red light is $100 in Los Angeles County, for example, but after added penalties the ticket will cost a grand total of $480.)

Even if you live in a state without these hefty additional penalties, the cost of a traffic violation doesn’t end with the cost of the ticket. If you want to keep the infraction off your driving record, there’s the added cost of a traffic school fee and the cost of the traffic school course. If you choose to pay the ticket and not attend driver’s ed, your ticket might get even more expensive — you’ll incur the long-term costs of higher auto insurance.

Violations can Raise Premiums by 50 Percent

According to an Insurance.com analysis of more than 32,000 insurance policies, drivers who purchased a one-car, single-driver policy in 2010 and had one violation on their record paid about 18% more on average than drivers without any violation. Drivers with two paid 34% more for their policy, while drivers with three violations paid a staggering 53% more for auto insurance than those with zero violations.

The following are the average annual premiums paid, according to the analysis:

  • No violations: $1,119
  • One violation: $1,318
  • Two violations: $1,497
  • Three violations: $1,713

Violations aren’t equal in the eyes of the insurance company, of course. A speeding ticket might not bump up your premium much, but two in quick succession could and might even get you dropped by some insurers. More serious offenses, such as driving while intoxicated, will send your rates up even more. The Insurance.com analysis lists the following as violations that can raise your insurance rates:

  • Speeding
  • Driving under the influence
  • Reckless driving
  • Running red lights
  • Failure to yield or stop
  • Fleeing from police
  • Driving the wrong way
  • Improper passing
  • Illegal u-turn
  • Failure to use proper child restraint

The cost of each type of violation will vary by state, insurance company, and driving record. Also, not all traffic violations will affect your insurance rate. More than likely, tickets for offenses like talking on your cell phone while driving (a violation in some states) and parking citations won’t raise your premium.

What to Do if Your Insurer Raises Your Rates

If your rates go up after a traffic violation, take steps to see if you can lower your premium, such as the following:

  • Shop around to compare several car insurance quotes. It’s easy enough to compare quotes from different companies to find the lowest rate. First, figure out how much auto insurance you need. Compare it to your current coverage and rate, then start making calls for quotes.
  • Don’t discount your current insurer too quickly. Shopping around is always a good idea, but if the savings turns out to be negligible, there are good reasons to stay put. First, some violations will affect you more if you’re shopping for a new insurance policy than if you stay with your insurer. Why? A prospective insurer will pull your driving record, but your current company won’t necessarily check to see if you’ve had recent violations because it’s simply too costly to check up on every customer every year. Second, some insurance companies offer accident forgiveness policies and will waive accident surcharges for their long-time customers. If you find much lower rates with another company, however, you’re probably better off switching.
  • Complete a defensive driving class. In some states you can expunge marks on your record, called ticket masking, if you take a driver’s safety course. If you live in one of these states, your insurance company might be required to lower your rate after you’ve successfully completed the course. Note that you can only take defensive driving to expunge points once in a set time period (usually 18 months). If you get another ticket within that time period, your rates will probably increase.
  • Increase your deductible. If you’re willing to take on more risk, you can lower your annual premium by raising your deductible. This means you’ll need enough money in savings to pay the deductible, so consider your financial situation carefully before deciding if it’s the right move.
  • Maintain (or improve) your credit rating. The majority of auto insurers consider a low or bad credit rating a sign of greater risk when it comes to auto insurance, and hike rates accordingly. While there doesn’t seem to be solid evidence of the link between the two, the bottom line is that bad credit likely means a more expensive car insurance premium. Maintaining or improving your credit score can save you money on auto insurance.

Even if you have a few points on your record, you should be able to find a policy, though it’ll be a more expensive policy than if you had a clean driving record. There also are additional tips in this past GRS article on lowering car insurance rates, such as removing extras like towing and car rental from your policy.

I think a combination of luck and being a decently cautious driver have spared me from many a ticket. To date, I’ve had one speeding ticket, and I took an online defensive driving course to keep my driving record clean. (Despite being online, it was still a time-consuming experience that I don’t want to repeat!)

Do any of you have experience with lowering your premium after a traffic violation? Leave your tips in the comments!

Source: getrichslowly.org

Apache is functioning normally

Here we go with another week. After some positive economic data mortgage rates have moved slightly higher. We have several notable economic reports out over the next few days as well as the ongoing trade talk concerns, so rates could move around a little. Read on for more details.

Where are mortgage rates going?                                      

Mortgage move higher after retail sales report

The retail sales report for June got released today, and it showed a healthy uptick of 0.5% from the previous month. Not only that, but the May reading got revised from a month over month rise of 0.8% to 1.3%.

All of the news outlets are reporting on this story and citing how it demonstrates that the U.S. economy finished out the second-quarter on a high note.

Given the perceived strength of the economy, financial market participants are taking on more risk today, moving money out of the safe haven of long-term government bonds and into stocks.

This is pushing the yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, up almost five basis points on the day.

Mortgage rates typically move in the same direction as the 10-year yield, so we’re seeing a little upward pressure to start the week.

Rate/Float Recommendation                                

Lock now before move even higher    

Mortgage rates are on track to increase over the coming months as the Federal Reserve gets ready to, and follows through with more increases to the nation’s benchmark interest rate.

To avoid locking in a higher interest rate, we recommend that borrowers take action on a purchase or refinance, sooner rather than later.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:          

Retail Sales 

Retail sales for June increased by 0.5% month over month. Retail sales less autos rose 0.4%. Retail sales less autos and gas ticked up 0.3%. The control group was unchanged.

Overall, it’s a solid report that points toward a strong finish for consumer spending in the second-quarter.

Empire State Mfg Survey

The General Business Conditions Index for July hit 22.6. That’s just a hair above the 22.0 that analysts had predicted.

Business Inventories

Business inventories increased by 0.4% in May.

Notable events this week:     

Monday:   

  • Retail Sales
  • Empire State Mfg Survey
  • Business Inventories

Tuesday:   

  • Industrial Production
  • Housing Market Index
  • Fedspeak

Wednesday:         

  • Housing Starts
  • EIA Petroleum Status Report
  • Beige Book
  • Fedspeak

Thursday:     

  • Jobless Claims
  • Philadelphia Fed Business Outlook Survey

Friday:          

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

Apache is functioning normally

Mortgage rates have been floating around a tight window for the past few months now, but we are likely going to see them rise as the end of the year draws nearer. If you’re looking to buy a home or refinance your current mortgage, taking action soon is probably the best bet. Read on for more details.

Where are mortgage rates going?                                       

Rates take one step backwards

It seems like it’s been one step forward and one step backwards for mortgage rates over the past few months. This has kept rates in a very narrow range.

According to the Freddie Mac Primary Mortgage Market Survey (PMMS) the average rate on a 30-year fixed rate mortgage has bounced around between 4.47% and 4.66% between late April and now.

Compared to the steep run-up we saw in the beginning of the year, the current mortgage rates environment has been very stable. Here are the latest numbers from today’s PMMS:

  • The average rate on a 30-year fixed rate mortgage moved down one basis point to 4.52% (0.4 points)
  • The average rate on a 15-year fixed rate mortgage dropped two basis points to 4.00% (0.4 points)
  • The average rate on a 5-year adjustable rate mortgage ticked up one basis point to 3.87% (0.3 points)

Here is what the Economic and Housing Research Group at Freddie Mac had to say about mortgage rates this week:

“Mortgage rates were once again mostly flat over the past week, inching backward slightly.

Manufacturing output and consumer spending showed improvements, but construction activity was a disappointment. This meant there was no driving force to move mortgage rates in any meaningful way, which has been the theme in the last two months. That’s good news for price sensitive home shoppers, given that this stability in borrowing costs allows them a little extra time to find the right home.

Unfortunately, don’t expect much relief from the tight inventory conditions plaguing many markets. As seen again last month, new home construction is not picking up to meet demand, and as a result, home prices are still rising at double the pace of income growth.”

Rate/Float Recommendation                                 

Lock now before move even higher    

Current mortgage rates are staying in a tight range right now but Fed Chair Jerome Powell reaffirmed that the Federal Reserve is on track to gradually increase the nation’s benchmark interest rate. Right now the general consensus is that that will happen at least one, possibly two, more times this year.

When it becomes apparent that the Fed is about to hike, mortgage rates will move higher. Given this expectation, we believe that the smart decision for most borrowers is to lock in on a purchase or refinance sooner rather than later. The longer you wait the more likely it is that you’ll wind up locking in a higher rate.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:          

Jobless Claims 

Applications filed for U.S. unemployment benefits for the week of 7/14/18 came in at 207,000. That’s down 8,000 from the previous week, putting the four-week moving average at 220,500.

Philadelphia Fed Business Outlook Survey 

The Philly Fed Business Outlook Survey rose sharply in July, coming in at  25.7. That’s four points higher than the 22.0 that analysts had expected.

Notable events this week:     

Monday:   

  • Retail Sales
  • Empire State Mfg Survey
  • Business Inventories

Tuesday:   

  • Industrial Production
  • Housing Market Index
  • Fedspeak

Wednesday:         

  • Housing Starts
  • EIA Petroleum Status Report
  • Beige Book
  • Fedspeak

Thursday:     

  • Jobless Claims
  • Philadelphia Fed Business Outlook Survey

Friday:          

*Terms and conditions apply.

Carter Wessman

Carter Wessman is originally from the charming town of Norfolk, Massachusetts. When he isn’t busy writing about mortgage related topics, you can find him playing table tennis, or jamming on his bass guitar.

Source: totalmortgage.com

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North Carolina-based Truist Financial Corporation announced on Tuesday that seasoned mortgage executive David Smith will be the head of Truist Mortgage effective July 31. Smith will replace the soon-to-be-retired Todd Chamberlain, who will assist with the transition. 

Smith, whose experience includes leadership roles at companies such as Keller Williams and CitiMortgage, will oversee the strategy and execution of originations, fulfillment, servicing and warehouse lending.

In addition, Smith will lead the nationwide direct channels and correspondent business, reporting to chief retail and small business banking officer Dontá Wilson.

Wilson said that Smith positions Truist to “reimagine the future,” according to a news release. 

Truist, a top U.S. mortgage lender and servicer, has shrunk amid a challenging mortgage market. 

In the first quarter of 2023, the company originated $4 billion in mortgages, according to the Inside Mortgage Finance (IMF) estimates. The volume was 64% lower than in the same period of last year but was enough to rank the company the 15th largest residential mortgage lender in the country. 

The company’s volume comes mainly from third-party originators. It originated $2.7 billion through TPO in Q1 2023, down 67.2% year over year. Meanwhile, the retail channel was responsible for $1.3 billion, a 58.3% decline in the same period. 

The firm’s owned servicing portfolio, now under Smith’s leadership, reached $272 billion from January to March, 10.4% higher than in the same period of 2022. Truist is the 12th largest servicer by owned portfolio in the U.S, according to the IMF data.  

Prior to joining Truist, Smith led the mortgage lending, insurance and title businesses affiliated with Keller Williams. Before that, Smith was the president and chief executive officer of CitiMortgage, a subsidiary of Citibank, where he navigated the financial downturn of 2008. His expertise is in building product breadth and pricing strategies for clients. 

Smith said that he targets with his new position at Truist to deliver an “innovative, digital-first client experience to help even more clients bring their dreams into reality and achieve financial happiness,” according to a news release. 

Source: housingwire.com