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Sometimes finances can seem like magic. Or, at the very least, a mystery. Especially when it comes to figuring out how much rent you can afford.

This is where budgeting comes in. Creating a monthly budget can help you understand how rental rates fit into your financial life.

Use these tips and resources to get a handle on your budget, understand how rental rates are determined, and figure out just how much you can comfortably afford to spend each month on rent.

The budget worksheet

Think of your budget not as a restrictive punishment that forces you to cut back, but as a document that allows you the freedom to spend what you need to spend and still meet your financial goals.

Your budget plan starts with knowing how much you make. Once you know how much income you have coming in each month, you can look at how much you have going out in expenses. Comparing those two basic figures is how you make a budget. Remember to be realistic and calculate not just your salary but your take home pay after all expenses are factored in.

It’s easiest to record your spending behavior and get everything straight when you use a budget worksheet. There are several online resources you might check out. Bankrate offers an online app where you can identify and input your expenses; Freddie Mac suggests tracking your income for two months using this PDF budget worksheet.

The rent figure

Rental rates are set according to what the market can bear. To set rates, property managers will consider what comparable apartment units rent for in the area. The price will go up if their units feature bonuses like convenient amenities, a prime location or recent renovations.

But how much should you spend on rent? While it’s common for financial experts to recommend spending around 25 to 35 percent of your income on rent, that figure may not be feasible. In some of the largest and most competitive rental markets — New York City, for example — you may have to spend more. Renters should be flexible and consider what other costs they may be willing to cut in order to get the right rental in the right place.

Watch for hidden costs

It would be nice if rent prices were the only expenses impacting a renter’s monthly budget. But in the real world, your monthly rent is just the first of several other obligations. Beyond the obvious bills such as utilities, cable and Internet, renting often includes hidden costs that can pop up and bite your finances if you aren’t prepared.

Before you even move in, you’ll want to factor in costs such as application fees, moving costs and security and pet deposits. You’ll also need to account for moving expenses and acquisition costs for new furniture or other household necessities.

But the trickiest expenses are the ones that don’t show up until after you’ve moved in. Did you get a parking ticket because the rental didn’t come with paid parking? What will it cost to use a laundromat if you have no in-unit washer and dryer (plus, how will you lug your dirty laundry back and forth)? Think hard and ask tough questions about what new costs your apartment may bring.

Make it all add up

Here’s the most important part: find a way to afford rent and cost of living, while keeping some spare change for your own happiness. Ideally, you want to allot enough funds for each of your fixed expenses, while also saving a little something for the future. To determine a rental rate you can afford means that rate has to fit within these guidelines. Your budget plan will help you figure out how all these expenses balance the spreadsheet of your financial life.

If you can make the numbers work in your city, allocating the ideal 25 to 35 percent of your budget to rental expenses will help you live within your means. The idea is that you’ll have money left over for other expenses, afterward — even some fun ones like vacations and the occasional adult beverage.

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When it comes to loans, a balance generally refers to the amount you owe — but with credit cards, there can be several types: statement balance, current balance and negative balance, to name a few.

Current balance means the same thing as outstanding balance. Here’s what that means and why it matters when it comes time to pay your credit card bill.

What is an outstanding balance?

The outstanding balance on a credit card is the total amount owed at the time that you check your account. It is the total of purchases, cash advances, balance transfers, issuer fees and interest that have posted to the account.

Also known as the current balance, it is a living number that can change daily. If the outstanding balance is $500 when you log into the credit card’s app in the morning, but a $50 statement credit posts to the account midday, the outstanding balance you owe is $450 (even if the $50 credit is still showing as pending).

For the most up-to-date number of how much you owe the card issuer, check your outstanding balance.

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What’s the difference between outstanding balance and statement balance?

While the outstanding balance is the total amount you owe on the card, the statement balance indicates only how much you owe since the close of your last billing cycle, usually a period of around 30 days.

Your monthly credit card statement will typically list both your outstanding (aka current) balance and your statement balance. It’s possible for these two balances to be the same, but they may not be if you use your card — or make a payment toward it — after your statement closing date.

You can calculate your statement balance yourself:

  1. Add up all purchases, fees, balance transfers and cash advances from the billing period. Let’s say that total is $3,000.

  2. Add up all payments and statement credits from the billing period. Say that total is $1,000.

  3. Subtract the second amount from the first. The statement balance would be $2,000.

If no other transactions are made, then both your statement balance for that billing cycle and your outstanding balance are the same: $2,000.

However, if you make additional transactions after the closing date of that billing cycle, your statement balance remains $2,000, while your outstanding balance will include those additional transactions.

Should you pay the outstanding balance?

Paying the outstanding balance is an excellent option if you can afford to do so. By submitting a payment in the amount of your current balance, you’ll have completely paid off your credit card bill, thus avoiding interest charges.

Paying the outstanding balance also guarantees that your credit card’s balance resets to zero, which isn’t always the case when you pay the statement balance. Credit bureaus prefer accounts with a low utilization ratio, or the percentage of total available credit in use at one time. Experts advise keeping your utilization ratio below 30%. After paying the outstanding balance, your utilization ratio for that particular credit account will be exactly 0%.

However, you won’t owe any interest if you pay the full statement balance either. When you do that, a grace period goes into effect, allowing you to “float” any new charges you make until the due date for your next billing cycle.

Note, though, that some issuers don’t give grace periods, and they may temporarily revoke that perk for cardholders who don’t pay off their balances by the due date.

Source: nerdwallet.com

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Considering moving to Omaha? Before you make your decision, it’s essential to weigh the pros and cons of living in this vibrant Midwestern city. Omaha, NE, offers a unique blend of opportunities and challenges that can greatly impact your day-to-day life. In this Redfin article, we will explore 10 key pros and cons of living in Omaha, covering aspects such as the job market, cost of living, cultural scene, and more. Whether you’re already eyeing homes for sale in Omaha or you’re still considering the move – we’ll help you make an informed choice about whether Omaha is the right place for you. Let’s get started!

Welcome to the bustling heartland city of Omaha, where vibrant community spirit, affordable living, and a range of housing options await.

Pros of living in Omaha

1. Affordable cost of living

One of the most appealing aspects of Omaha is its lower cost of living. Housing, groceries, and overall expenses are 7% lower than the national average. This means your hard-earned money can stretch further, providing you with a comfortable and financially stable lifestyle. 

Omaha boasts notably affordable housing prices, offering a wide range of options to suit different preferences and budgets. In fact, housing in Omaha is approximately 16% lower than the national average, with a median sales price of $270,500. For those looking to rent, the average rent for an apartment in Omaha, ranges between $970 and $1,547 in 2023.

2.  Strong job market

Another top reason for moving to Omaha is the robust job market.. With a diverse economy and the presence of major corporations, the city offers a wide range of job options across various industries. Whether you’re in finance, technology, healthcare, or other sectors, Omaha provides a fertile ground for professional growth and advancement. As of 2020, companies such as Offutt Air Force Base, Nebraska Medicine, First National Bank, and PayPal ranked within the 50 Biggest Employers in Omaha.

3. Natural beauty

Nature lovers and outdoor enthusiasts will find solace in Omaha’s natural beauty. The city has picturesque parks, scenic trails, and the nearby Missouri River. Immerse yourself in the tranquility of places like Lauritzen Gardens or embark on hiking adventures in Fontenelle Forest. Omaha’s green spaces provide a refreshing escape and opportunities for recreational activities all year round.

4. Delicious cuisine

Prepare your taste buds for a culinary journey as you step through the “Gateway to the West.” From world-class steakhouses to cozy family-owned restaurants, Omaha’s dining scene is a paradise for food lovers. But the flavors don’t stop at steaks–diverse culinary offerings, including farm-to-table establishments, international cuisines, and creative fusion dishes, ensure that there’s something to satisfy every palate.

5. Events and festivals

Omaha knows how to celebrate life! The city hosts many events and festivals annually, creating a vibrant atmosphere and fostering a strong sense of community. Experience the excitement of the College World Series, immerse yourself in art and culture during the Omaha Summer Arts Festival, or celebrate the city’s diverse heritage at the Native Omaha Days. 

Cons of living in Omaha

1. Limited entertainment options

While Omaha offers a vibrant events and festival scene, it may not boast the same entertainment options as larger cities. Nightlife and live performances may be more limited compared to bustling metropolises. However, Omaha’s charm lies in its ability to provide a more intimate and accessible entertainment experience, with theaters, live music venues, and local events offering unique and memorable experiences.

2. Harsh winters

Winter in Omaha can be challenging for those unaccustomed to cold and snowy conditions. The temperature drops, and snow blankets the city, creating a winter wonderland that can present some difficulties. The frigid temperatures require extra layers of clothing, and navigating icy roads and sidewalks can be more demanding.

3. Limited public transportation

Omaha’s public transportation system may not be as extensive as in larger cities. With a 24 Transit Score, reliance on private vehicles is more common, and commuters may face challenges if they prefer public transit. 

4. Urban sprawl

Like many growing cities, Omaha has experienced urban sprawl, resulting in longer commutes and potential disconnection between neighborhoods. However, this expansion has also led to the development of new communities and suburban areas with distinct charms.

5. Slow pace of change

Omaha is often characterized by a more deliberate and measured approach to change compared to some larger, more progressive cities. While this can be seen as a disadvantage for those seeking rapid advancements and cutting-edge developments, it also fosters a sense of stability and preservation of tradition.

Is Omaha a good place to live? The bottom line:

With its affordable cost of living and a strong job market boasting opportunities across diverse industries, Omaha offers the potential for a comfortable and fulfilling lifestyle. It’s also important to consider the city’s limitations, such as the relatively limited entertainment options, the challenge of harsh winters, and the less extensive public transportation system.

Ultimately, the decision of whether to live in Omaha depends on individual preferences and priorities. By weighing the discussed pros and cons, you can make an informed choice that aligns with your preferences, needs, and aspirations.

Source: redfin.com

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Whether you’re a current resident seeking information about your beloved city, or you’re scouring the market for apartments for rent or homes for sale in Malibu, understanding the dynamics of this coastal city is crucial. Malibu is a fusion of luxury and nature, where stunning beaches meet upscale living, and an active lifestyle is a norm. However, like any city, it has its drawbacks.

In this Redfin article, we’ll shed light on the various pros and cons of living in Malibu to help you decide if moving to or staying in Malibu aligns with your life’s vision.

Pros of living in Malibu

1. Stunning beaches

Malibu is renowned for its stunning coastline featuring over 20 beaches, including the famous Zuma Beach and Surfrider Beach. The crystal-clear waters, the broad sandy beaches, and the dramatic ocean views make these spots an earthly paradise. The beaches are a hub of activity and relaxation, from surfers tackling the waves to families enjoying picnics.

2. Outdoor activities

The landscape surrounding Malibu is incredibly diverse, offering many outdoor activities. You can easily access the Santa Monica Mountains for hiking, with trails offering panoramic ocean and hills views. Also, kayaking, paddleboarding, and surfing are popular water activities due to the city’s extended coastline. Birdwatchers and wildlife enthusiasts will also appreciate the rich biodiversity within the area’s nature reserves.

3. Luxury living

Malibu offers an exclusive, luxurious lifestyle. The city is known for its multimillion-dollar beachfront homes, many with breathtaking views of the Pacific Ocean. Considering its prestigious title, Malibu is complemented by a host of high-end eateries, such as Nobu Malibu, a hotspot for celebrities, offering exquisite Japanese cuisine with an impressive ocean view.

4. Active lifestyle

The city encourages a physically active lifestyle and hosts several events, such as the Malibu Half Marathon & 5K and the Nautica Malibu Triathlon, which attract participants worldwide. The extensive coastline, parks, and hiking trails provide ample opportunities for jogging, cycling, and outdoor workouts.

5. Favorable climate

Malibu enjoys a Mediterranean climate with warm, dry summers and mild, wet winters. The area rarely sees a temperature exceeding 90°F (32°C) in the summer or dropping below 40°F (4°C) in the winter. This pleasant, sunny weather allows for year-round outdoor activities and is one of the reasons why people are drawn to live in Malibu.

Cons of living in Malibu

1. High housing costs

The cost of living in Malibu is significantly higher than the national average, driven primarily by housing costs. Malibu has a median sales price of $3,695,000, making other major luxury markets in Los Angeles more attractive such as Beverly Hills ($1.9M) and Hollywood Hills ($1.74M). Aside from housing, everything from groceries to health care tends to be more expensive here.

2. Traffic congestion

Traffic congestion can be a significant issue, particularly along the Pacific Coast Highway (PCH), the main thoroughfare. Morning and evening rush hours can be hectic, and traffic can back up considerably on weekends and holidays when tourists flock to the beaches.

3. Risk of natural disasters

Malibu is prone to certain natural disasters, most notably wildfires and mudslides. The area’s lush vegetation can be highly flammable in the hot, dry summers and falls, leading to destructive wildfires. Additionally, heavy winter rains following these fires can result in severe mudslides.

4. Limited public transportation

With no underground or overground mode of transportation, Malibu’s residents are faced with the reality of being a car-driven city. The primary mode of public transit is the bus service, but it’s routes are limited, and frequencies are often lower than in more urban areas. Its sprawling nature makes it difficult for the public transit network to cover all areas effectively.

5. Feeling of isolation

Malibu’s breathtaking geography, while appealing, can sometimes impart a sense of isolation and can make it difficult to form tight-knit communities. The city’s commitment to preserving natural beauty limits the presence of businesses and amenities, while traffic congestion on the Pacific Coast Highway hampers connectivity to surrounding areas, including the heart of Los Angeles.

Is Malibu a good place to live? The bottom line:

Malibu offers an unparalleled blend of natural beauty, luxurious living, and active lifestyle opportunities that are hard to find elsewhere. Yet, it comes with challenges, including high living costs, the risk of natural disasters, and potential feelings of isolation. Whether Malibu is an excellent place to live is highly subjective and depends on one’s preferences, financial capabilities, and lifestyle choices. Ultimately, the decision to call Malibu home should be based on a thorough understanding of what life in this unique city entails

Source: redfin.com

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Remote work is making people less productive than before, according to a recent survey of business leaders.

The survey, published last week by architect and design firm Vocon, found that almost 40% of business leaders nationwide said they’ve seen a decrease in productivity from their remote workforces. At the start of the COVID-19 pandemic, 56% of employers rated their remote workers’ productivity as “excellent” in an earlier Vocon survey.

Some reasons for the lowered productivity could be that workers are starting to feel as if they’re missing out by not being able to connect with their colleagues face to face. They’re also find it difficult to set boundaries at home with work. Employees who lack a home office space within their abode generally find remote work to be more challenging, the survey found.

Vocon’s survey came as a second study by research firm Engagious found that 53% of consumers “very much want to return” to the office. In that study, 40% of workers said they’d look for another job should their employer decide to go entirely virtual.

“Companies were having a really hard time keeping their culture together and a really, really difficult time onboarding employees,” Megan Spinos, director of strategy for Vocon, told the Commercial Observer. “The workplace was really a critical place for them.”

A majority of the business leaders surveyed by Vocon said they still intend for their employees to return to the office, with most aiming for that to happen in the first quarter of next year. Vocon’s survey reflects the heads of firms that oversee 443,895 workers nationwide in industries such as real estate, technology, advertising, finance, and more.

The news is positive for the commercial real estate sector, of course. And the industry has benefited from other firms that are looking to expand their physical office footprint. The most conspicuous of these is Amazon.com, which recently purchased a 630,000 square foot building in Manhattan and leased two million square feet in two developments in Bellevue, Washington.

“Tech companies still believe in physical spaces,” Tom Vecchione, a principal at Vocon, told the Commercial Observer. “There’s a new awareness about wanting to be in a building working together.”

Surprisingly, it’s the younger workforce that seems most eager to return to the office. A recent analysis by Cushman & Wakefield found that around 70% of Generation Z and 69% of Millennials faced challenges in working from home. Some of the reported problems include struggling to find a space to do their work, and missing out on advancement opportunities due to a lack of face to face contact.

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

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According to a recent U.S. News & World Report collaboration with HomeLight to list Memphis, Tennessee’s top real estate agents, Crye-Leike’s Danny Freeman eclipsed all other agents in the region. 

Memphis from the river By <a href=httpswwwflickrcomphotosseandavis>Sean Davis<a>

The listing, an unbiased recommendation created using in-depth key performance indicators, ultimately helps home buyers and sellers with the best-qualified professionals in Memphis. The following is a rundown on each of the top 5 agents listed alongside their recent transaction information. I’ve also included a spot check on each agent’s digital presence on Facebook, which readers may find interesting. 

Danny Freeman has been in the real estate business for over 35 years. A top rates agent perenially, Freeman has had 208 recent transactions and is Move Safe™ Certified by HomeLight on account of his COVID-19 strategies for keeping his clients safe. Overall, he’s listed as having created over 600 transactions with an average sale price above 175k. The Freeman Home Team on Facebook shows mediocre engagement, but Freeman’s ratings at Realtor dot com are rock solid. 

Second on the U.S. News list is Keeler William’s Chuck House, who is also a Zillow Premier Agent. House, who has been in the business for almost 20 years. He is also Move Safe™ Certified and has had over 160 recent sales. Overall, House has 412 sales with an average selling price in excess of 260k. A Memphis area resident for over 40 years, House is not the supreme ruler of digital real estate, but I did find his personal Facebook page interesting. Web-wide, the Keeler Williams broker has stellar reviews on every major real estate platform. 

Next on the list Mark Saller of Premier Realty Group. This longtime Memphis agent has superhuman sales numbers with over 2,300 sales (HomeLight shows 68 recently) over the last 10 years, averaging 230 sales per year. He specializes in wholesaling, so his transactions are listed at lower sales prices (69k). A public speaker, Saller’s Reedy & Company Facebook profile is a train wreck which reminds me that almost all of Memphis’ property professionals just don’t get it online.

Melinda Crosslin of Crye-Leike is fourth on the list with 134 recent transitions of between $123,000 and $324,400. With over 20 years of experience, Crosslin has sold over 650 properties, most of which were single-family homes. Eddie and Melinda Crosslin Crye-Leike Realtors Facebook presence is not quite as pitiful as most of the others, but its all but useless for sure. Crosslin’s overall digital footprint seems demonstrative of agents stuck in the age of brick and mortar business, but her record on Zillow is fairly impressive. 

Rounding out the list is Tyler Tapley, another Zillow Premier Agent affiliated with Crye-Leike Memphis. A buyer’s agent primarily, Tapley has more than a decade of experience in the industry. His accolades include Multi-Million Dollar Club Active Member, PINNACLE PRODUCER AWARD WINNER, and Certified Relocation Specialist. He and his wife Meatha’s Facebook presence is, like all the others, simply a placeholder, but one made a lot more interesting because of Mrs. Tapley’s superstar videos showing the couple are indeed real people. 

Interestingly, I ran across a few other top Memphis agents via Top Agents Ranked. The funny thing being, not one of the HomeLight agents was on the email list sent me when I engaged the service that is supposed to connect the best agents with clients. Tops on the list sent me was Michele Johnston – Dream Maker Realty, followed by Verna Littleton of KAIZEN Realty. 

I’m sure the rating criteria is to blame for the discrepancy here, but in fairness, I thought mentioning these other Memphis professionals appropriate here. Also, none of the agents in either list seem to put much stock in social media, or even their websites. The lone exception being Kaizen Realty. More on this in another report. And as a parting note, it seems like a lot has not changed in Memphis, except that previously profiled area agents don’t seem to have made either one of the lists mentioned in the current story. This seems like another prompt for a follow-up, don’t you think? 

To be continued…

Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.

Latest posts by Phil Butler (see all)

Source: realtybiznews.com

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A duo of bipartisan U.S. House of Representatives lawmakers introduced a bill earlier this year that is designed to increase the supply of available homes on the market. And in order to bring more attention to the issue, the lawmakers recently made a public push about what the bill would do if passed.

The “More Homes on the Market Act,” unveiled in March by Reps. Jimmy Panetta (D-Calif.) and Mike Kelly (R-Penn.), would amend the tax code to incentivize more homeowners to sell their houses, increasing the supply of homes available on the market.

The bill would increase the sales gain tax exclusion to $500,000 for single filers and $1 million for joint filers, according to its current language. Currently, single homeowners who sell their home can only exclude $250,000 in gains from capital gains taxes while joint filers can exclude $500,000.

These were amounts “set in 1997 and not indexed for inflation,” Rep. Panetta’s March announcement stated. “This has had an outsized impact on California homeowners who face some of the highest housing costs in the nation.”

The pair introduced the same legislation in September 2022 under the prior Congress, but the bill did not survive beyond referral to the House Ways and Means Committee. The new version of the bill, House Resolution (H.R.) 1321, has picked up five additional cosponsors as it prepares to go to the same committee.

Rep. Panetta told MarketWatch in an interview last week that Congress can address housing supply constraints with the proposed legislation.

“It’s a pretty simple fix and a pretty straightforward bill,” Panetta said. “A lot of people who have owned homes for a long time are in that position of deciding, do I sell my home that has gained a tremendous amount of capital and then take a huge tax hit? Or do I just sit on it, and give it away?”

Housing affordability and supply is becoming an increasingly common focus for federal and state lawmakers and offers a source of bipartisan work at a time of intense political polarization.

Earlier this month, a bipartisan duo in the U.S. Senate introduced a bill that would address a shortage of affordable housing in rural communities by easing the process for non-profits to acquire properties with USDA rural housing loans. It would also decouple the related rental assistance so that the assistance doesn’t end when the mortgages mature.

Absent action at the federal level, states have been aiming to address housing supply issues in their own ways.

In Washington state, Gov. Jay Inslee (D) recently signed 10 different bills taking aim at supply and affordability issues, including a bill that lifts single-family zoning restrictions to allow for more affordable housing units, as well as easier accessory dwelling unit (ADU) permitting and construction within the state.

In Minnesota, the legislature recently approved bills that would preserve affordable housing projects and provide down payment assistance for first-time homebuyers.

Source: housingwire.com

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This week, we interviewed Nik Shah from Home LLC.

Let’s get to it!

Who are you and what do you do?

I’m Nik Shah, the Founder & CEO of Home.LLC.

We provide down payment assistance so people can buy their home. In exchange, we share a part of the gain (or loss) on those homes.

What problem does your product/service solve?

Millions of people already earn enough income to pay a mortgage but don’t have savings to reach 20% down. Instead of throwing away money towards rent, we provide down payment assistance up to $500,000 so they can buy a home & start building wealth.

By getting our debt-free investment, people save thousands of dollars by borrowing only 80% from the bank (down from 90%-98%), avoiding mortgage insurance, and potentially getting a better interest rate as well. Plus, they get a partner to share their losses if their market crashes!

For more info, I encourage you to check out our website!

What are you most excited about right now?

Overall, I’m excited for our Goldilocks economy as we enter the roaring 20s

While it was heart wrenching to see the stock market crash in 2020, it was also a relief to see how home prices were insulated as they have been in the last 100’s of years (except 2008).

In 2021 and beyond, I am excited for people that use programs like ours to start building wealth. I’m also beyond excited for institutional investors that use us to park long-term capital in real estate.

What’s next for you?

By 2050, we will help 1 million American families buy their home and start building wealth.

Specifically, we want to focus on hard-working minorities, single parents, and immigrants as they deserve an equal shot at the American dream.

What’s a cause you’re passionate about and why?

My wife and I are planning to go to at 62 US National Parks. We’ve been to 40% of them so far and absolutely love them.

Also, during the lockdown, I rediscovered my love for Chess. I’ve been playing a lot of online chess recently and keep learning it with the hope of being decent at it someday…

Thanks to Nik for sharing his story. If you’d like to connect, find him on LinkedIn here.

We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop us a line (Community @ geekestate dot com).

Source: geekestateblog.com

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Other indexes also show rates trading on the sidelines. The 30-year fixed rate for conventional loans was 6.97% at Mortgage News Daily on Thursday morning, down one basis point from the previous day. HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 6.71% on Wednesday, compared to 6.70% the previous day.

“Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve,” Sam Khater, Freddie Mac’s chief economist, said in a statement.  

Officials at the Fed decided in their June’s meeting to maintain rates in the 5% to 5.25% range, following 10 consecutive hikes. Policymakers want to assess how much banks reduced lending levels due to the recent tumult in the sector and evaluate the impact of their rate hikes so far – including in the housing sector. 

Fed Chairman Jerome Powell told journalists that housing, a very interest-sensitive sector, it’s the first place that’s “either held by low rates or is held back by higher rates.”

“We now see housing putting in a bottom and maybe even moving up a little bit. You know, we are watching that situation carefully. I do think we will see rents and house prices filtering into housing services inflation. And I don’t see them coming up quickly. I do see them coming kind of wandering around at a relatively low level now.” 

The Fed indicated the federal funds rate will end the year at the 5.6% level, which opens the door for two rate hikes in 2023. The reason for more rate increases is the disappointingly slow decline in core inflation so far this year. 

According to Powell, “Not a single person on the Committee wrote down a rate cut this year, nor do I think it’s at all likely to be appropriate.” 

Analysts at Goldman Sachs said they had not changed their forecast of one additional hike in July to a peak rate of 5.25-5.5%. 

“The combination of the hawkish surprise in the dots and the hint at an every-other-meeting pace strengthens our confidence that the FOMC will hike in July and makes a possible second hike more likely in November than September, though neither is in our baseline forecast,” the analysts wrote. 

Higher borrowing costs – for a while 

In the housing market, the Fed’s actions mean borrowing is likely to remain expensive for the remainder of the year, according to the Realtor.com economic data analyst Hannah Jones. 

“Both housing supply and demand remain stifled by affordability constraints. Mortgage rates have been on the high end of the 6-7% range since the beginning of June and home prices have made their typical seasonal ascent, though less aggressively than in summers past,” Jones said in a statement. 

According to Jones, the national median listing price fell year-over-year for the first time in the data’s history last week as sellers adjusted their asking prices to attract buyer demand. 

“Despite this annual price decline, homes in many areas are out of the feasible price range for many buyers and still-high interest rates are discouraging homeowners from giving up their current mortgage rate and listing their homes for sale.” 

Industry economists believe mortgage rates will trend down only at the end of the year. 

“As inflation continues to decelerate, economic growth is slowing and the tightening cycle of monetary policy is reaching its apex, which means mortgage rates are expected to decrease later this year and into next,” Khater said. 

Higher rates are impacting mortgage lenders’ production. Analysts at Keefe, Bruyette & Woods wrote in a report, “Mortgage volumes are likely to remain under pressure throughout the rest of 2023, given rates remain in the neighborhood of 7%.” 

“Additionally, it is unclear how much more capacity needs to be removed from the system, although the exit of Wells Fargo from the correspondent channel has been a meaningful positive,” the analyst wrote. “So, while we remain somewhat cautious on the originators, we would acknowledge that the backdrop has improved.”

Source: housingwire.com

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This week, we interviewed Hetal Parekh from EnerYields.

Let’s get to it!

Who are you and what do you do?

My name is Hetal Parekh. I am the founder of EnerYields, which makes it easy for building owners to save time and money on green construction and retrofits. The platform is powered by the most comprehensive database of its kind, complete with hard-to-find information about all green incentives and financing across both private and public sectors.

What problem does your product/service solve?

I discovered the need for EnerYields during my PhD at Carnegie Mellon, which was focused on identifying policy to catalyze green investments in commercial properties. Through interactions with numerous stakeholders, I found that access to financing was one of the biggest hurdles. Green incentives weren’t getting used because they were hard to find, and even harder to understand. Following validation from the industry for my research, I began building what is EnerYields today- to democratize ‘going green’ by improving access to information. EnerYields simplifies and standardizes green incentives and financing data and makes it available to all buildings. We help owners find the money that’s available to them, and then help them get the money they’ve found. All this is powered by our unique, comprehensive database housing green incentives and financing worth hundreds of millions, across both private, as well as the public sector.

What are you most excited about right now?

Being an energy efficiency enthusiast myself, I’m excited about the climate consciousness that has come about recently. Many leaders and thinkers like Bill Gates & President Biden are advocating for all industries to shift towards sustainable practices and operations to reduce their climate impact. Biden Administration’s $ 2T plan to promote clean energy and green retrofits for commercial buildings will significantly help reduce the ‘green premium’ in the building industry.

What’s next for you?

I’m excited that EnerYields has been selected for the 2021 Cohort of VentureBridge program, which is an initiative of the Swartz Center for Entrepreneurship exclusively focused on helping Carnegie Mellon alumni founders succeed in their entrepreneurial ventures.

What’s a cause you’re passionate about and why?

I believe the work that Oswal Mitra Mandal is doing in India is quite noble. Even the pandemic, they have provided free healthcare to a lot of distressed families, which has brought relief to those families.

Thanks to Hetal for sharing her story. If you’d like to connect, find her on LinkedIn here.

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Source: geekestateblog.com