While our stock markets turned in a positive performance during the first quarter of the year, inflation remained stickier than was hoped, with numbers waning but still above the target set by the Federal Reserve. This kept mortgage interest rates higher, which resulted in declining home sales in some areas. However, the forecast for the second half of 2024 is largely optimistic. The labor market has begun cooling, which should help slow inflation, especially when consumer spending is reined in.
If you're one of the millions of American homeowners with a 30-year mortgage, you can look forward to an interest rate that won't change for the life of the loan. What you may not realize is that homeowners in other countries may be jealous, as the budgeting power of a 30-year, fixed-rate loan isn't available in other countries.
Generally speaking, homeowners in Europe, the UK and Canada must refinance every few years, even with a longer mortgage term.
One of the main reasons why 30-year, fixed-rate mortgages are rarely seen outside the U.S. is because of how our financial markets are structured. In particular, the secondary market for mortgage-backed securities is what makes these loans possible.
Mortgage-backed securities are attractive to investors both here and overseas, as their government sponsorship makes them a safer long-term investment. Investors can also rely on a fixed payout.
Another big plus: the insurance provided by Fannie Mae and Freddie Mac is why America's mortgage lenders are willing to take on the risk associated with fluctuating interest rates over a mortgage's term. Without government-sponsored enterprises like Fannie and Freddie in place, buyers in other countries take on the added risk posed by a shorter or adjustable-rate mortgage.
Source: cnbc.com
If you live in a coastal state that's seen its share of hurricanes, the forecast for 2024 isn't good. According to the tropical meteorology team at Colorado State University, we can expect around 23 storms, 11 which will turn into full-blown hurricanes. Some are expected to reach Category 3 or stronger. This means it's essential to review your insurance coverage for your home.
As there's no single insurance policy for hurricanes, you'll need to make sure you have coverage that protects you from the two main types of hurricane damage: water and wind. Depending on where you live, you may need to add one or more of these to your current coverage.
Flood insurance. Most homeowners insurance policies don't cover floods, including water from a storm surge. You can buy this through the National Flood Insurance Program (NFIP), or from a private agency. Many insurers provide flood coverage through an arrangement from the NFIP.
Windstorm insurance. Depending on your location, your homeowners policy may cover wind damage caused by hurricanes. However, if you're in a hurricane-prone area, check to see if you need separate windstorm insurance. This may be available through your current provider, or a state-run insurance pool.
When you're shopping for added insurance, you'll want to ensure that your deductibles—the amount that you have to pay after an insurer's payout—are a good fit with your overall finances. These can be potentially confusing, especially if your policy has a named storm deductible in addition to wind and flood deductibles. This may go into effect if your home is damaged in a storm that's been named by the National Weather Service or the National Hurricane Center.
Source: nerdwallet.com
Considering how working conditions have changed dramatically over the past three years, you may be puzzled to hear that more people plan to retire at a younger age. What about the acceptance of remote work and the improvements in work-life balance? What about unemployment falling to near-historic lows as recently as January 2023?
Recent results from an ongoing triannual Labor Market Survey looked at the changing retirement plans of a rotating panel of participants. This survey began in 2014, with around 54.6% expecting to continue working past 62 from 2014 to 2020. However, retirement age expectations began to fall in March 2020. Most recently, the March 2024 statistic for the likelihood of working full time after age 62 hit a new low at 45.8%.
Workers under age 45 and with annual household incomes below $60,000 were slightly ahead of other respondents. Women are planning an earlier retirement, too.
While the survey didn't quiz respondents regarding their recent change in retirement plans, there are several possible contributing factors, including:
Another possibility: an increased uncertainty about life expectancy post-pandemic, even though recent statistics suggest otherwise.
Source: libertystreeteconomics.newyorkfed.org
Today's credit cards offer a variety of special offers to new users, including reward programs. Credit cards issued by airlines often reward users with free flights in exchange for points earned when charges are made to the card.
Travel loyalty programs have been popular for decades, with the largest—American Airlines AAdvantage—launched in 1981. Currently, over 40% of the population hold one or more credit cards associated with travel rewards.
While it may appear that a rewards-based credit card is a smart choice, it's important to compare different cards' fees and interest rates. A recent review by federal regulators discovered that one airline credit card was charging a $650 annual fee.
Another challenge for some airline credit card holders: redemption guidelines. Most loyalty programs' small print states that point values can change, which means that a flight that requires 40,000 points for free travel this month may require 60,000 points next month. Sign-up bonuses are also under scrutiny, with one major card paying out $100 million to cardholders in exchange for denying them bonus points.
In addition, some airline schedules have blackout dates that only allow paying passengers. These are often frustrating to airline loyalty program members, as these dates are often popular days for travel. However, several airlines' programs offer blackout-free rewards.
To get what you really want at a fair price, take the time to review several airline credit cards before you apply.
Source: nbc.news.com
A recent decision by the Federal Trade Commission (FTC) has banned noncompete agreements. These prohibit people from working for an employer's competitors, or starting a competing business, after they leave their job.
Noncompete agreements began in 1711, with the earliest known cases prohibiting apprentices from competing against the master craftsmen who trained them. Currently, employees with noncompete agreements are most commonly found working in sales, technology, finance, healthcare and creative services.
The FTC estimated that roughly around 20% of the nation's working population are currently bound by noncompete agreements. When the new rule was proposed earlier this year, more than 26,000 public comments were received, with over 25,000 in favor.
The noncompete ban is simple: companies will be banned from requiring new noncompete agreements with current or former employees. Positions that are not included in the noncompete ban include executives who are paid over $151,640 and create policy for their employer.
While the FTC estimates that the new rule will result in thousands of new businesses, not all business organizations agree, including the U.S. Chamber of Commerce. The Chamber's president and CEO described the FTC's rule as "a blatant power grab that will undermine American businesses' ability to remain competitive."
Source: nerdwallet.com