Money Management

Homes are super expensive these days. Will prices drop soon? Read on to find out. 

Given how expensive mortgage loans have gotten, you’d think buyers would be running the other way rather than seeking out listings. But the fact that home prices have risen for four consecutive months, according to the National Association of Realtors, tells us that buyer demand is quite strong.

In October, the median existing home sale price was $391,800. That’s a 3.4% increase from a year prior and the fourth consecutive month of annual home price gains. It’s also a lot of money to be paying at a time when mortgage lenders are charging 7.44% — the average rate as of this writing — to sign a 30-year loan.

In fact, let’s say you’re looking to buy a property worth $391,800 and are putting 20% down at closing. At a mortgage rate of 7.44%, you’re looking at a monthly payment of $2,179 for principal and interest. That doesn’t account for other homeownership costs, like property taxes.

Unfortunately, though, home prices could remain high for many more months. Here’s why.

It’s all about a lack of inventory

When there’s not enough supply of a given commodity that’s desired, its price tends to rise. That’s what’s happening in the housing market today.

The reason home prices are up is that sellers are being forced to compete with one another due to limited inventory. As of late October, there was only a 3.6-month supply of homes available for purchase. It can often take up to a six-month supply of properties to meet buyer demand in full.

Since buyers are being forced to duke it out over the same properties, they’re no doubt still engaging in bidding wars to some degree. Granted, bidding wars may be less prevalent now than in 2020 and 2021, when mortgage rates were at record lows. But all told, there’s still a lot of competition. And that explains why home prices are up.

When will home prices start to cool?

For home prices to start dropping, real estate inventory needs to pick up. But unfortunately, housing inventory is unlikely to increase until borrowing rates drop.

Many people are sitting on mortgages now with much lower interest rates than 7.44%. And why would someone with a 3% mortgage want to sell their home, only to have to finance a new one at more than double that rate?

Now, in the coming year, the Federal Reserve could start to cut interest rates if inflation continues to cool nicely. That could be enough to drive mortgage rates downward.

But even so, it’s unlikely that rates will get anywhere close to 3% anytime soon. And that means housing inventory could remain sluggish for many more months — even years. That’s not great news for buyers, but it’s the reality they may have to accept.

Know how much you can afford to spend

As a buyer, you may not get much relief when it comes to home prices anytime soon. So your best bet is to figure out how much house you can afford to take on and accept that you’ll probably end up spending more than someone who bought a home before the pandemic.

As a general rule, it’s best to keep your total housing costs to 30% of your take-home pay or less. That 30% should include not just your mortgage payment, but also, property taxes, insurance, and other recurring housing expenses that may apply to you.

At some point, mortgage rates are likely to fall to more attractive levels, and you can look to refinance your loan then. But make sure you can afford your home from the start, since an opportunity to refinance may not present itself for several years.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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There are some banking missteps that can cost you money. Find out about the costliest banking mistakes so you can avoid them. 

Bank accounts are the best place to keep your money safe. While investment accounts make sense for long-term financial goals, the value of investments can fluctuate. For money you don’t want to risk, bank accounts are the way to go.

Banking should never cost you any money, but it can if you’re not careful. Here are five of the most common and expensive banking mistakes, so you know what not to do.

1. Settling for a low interest rate

Interest rates on savings accounts are through the roof right now. But you need to know where to look, and it’s not at the big banks with branches everywhere. They offer some of the lowest rates. Bank of America and Chase have savings accounts with APYs that start at 0.01%, and Wells Fargo savings rates start at 0.15% to 0.25%.

High-yield savings accounts are currently offering APYs of 4% or higher, and some even offer more than 5%. If you have $10,000 in savings, choosing the right savings account can be the difference between earning $1 in interest per year and earning $400 or $500.

Savings account rates can fluctuate. If you’d like to lock in a high interest rate, you can do that with a certificate of deposit (CD). CDs are currently offering rates similar to or even a bit higher than high-yield savings accounts.

RELATED: Best CD Rates

2. Paying a monthly fee

Many banks charge a monthly maintenance fee, with fee amounts often ranging from about $5 to $15. That adds up to between $60 and $180 per year. Normally, a bank will waive the fee if you meet certain requirements, such as maintaining a minimum balance or receiving a minimum number of direct deposits.

It only makes sense to have an account like this if you can always meet the requirements to get the fee waived. If not, choose a bank account that doesn’t charge any monthly fees. There are plenty of banks offering excellent checking accounts and savings accounts with no fees.

3. Overdrafting your account

Overdraft fees have been declining, and many banks have gotten rid of them. But they’re not completely gone, and the average overdraft fee amounts to $26.61, according to Statista.

If you’ve been charged overdraft fees before, you may want to pick a bank that doesn’t charge them. It’s also smart to take steps to avoid overdrafting your account. Leave a buffer in your account so it has more than enough to pay your bills, and keep an eye on the balance. Budgeting apps are an easy way to manage all your accounts in one place.

4. Not reviewing your statement

While it may not be the most exciting thing in the world, reviewing your banking transactions is a must. You can do this monthly when you receive your statement or review transactions regularly in your online banking account.

By doing this, you can catch any errors or fraud quickly. Hopefully, you don’t run into these too often, if at all. But if it happens to you, time is of the essence.

For example, with fraudulent debit card transactions, your liability depends on how soon you report it. If you report the fraud within two business days, then by law, you’re liable for a maximum of $50. If you report it within 60 calendar days of receiving your statement, you’re legally liable for up to $500. Wait any longer than that, and you could be liable for the full amount of the fraudulent transaction.

5. Paying for purchases with your debit card

A debit card usually isn’t the best way to pay for purchases. You’re much better off paying by credit card, for a couple of reasons:

You can use rewards credit cards to earn cash back or points on your purchases. It’s possible to earn 1% to 6% or more back with credit cards. Most debit cards don’t earn rewards. And the ones that do typically earn far less than what credit cards offer.You’re less likely to be a victim of debit card fraud. Card data can get stolen online by hackers and in person with skimming devices. If someone gets your debit card info, they could potentially steal money from your bank account, and you’ll need to file a fraud report. It’s not as problematic if your credit card number gets stolen, because it’s not connected to your bank account.Many top credit cards offer complimentary protections. You can get benefits including purchase protection that covers new purchases against damage or theft, extended warranty protection, and much more.

The good news is that all these banking mistakes are easy to avoid. Now that you know about them, you can make sure they don’t cost you any money.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and JPMorgan Chase. The Motley Fool has a disclosure policy.

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If you have a Sam’s Club membership, don’t miss this year’s Black Friday savings opportunities. Find out which Sam’s Club deals are worth your money. 

Most retailers are running sales for Black Friday, including warehouse clubs like Sam’s Club. If you’re a Sam’s Club member, you may want to consider shopping for these discounted items. Whether you’re still looking for gifts for your loved ones or have some items you’ve been meaning to buy for your home, the deals are plentiful. Sam’s Club will have Black Friday discounts available from Nov. 23 through Nov. 26. Here are six deals that are worth it.

1. De’Longhi Magnifica XS Fully Automatic Espresso and Cappuccino Machine: $449.98

For caffeine lovers looking to upgrade their morning routine, a fancy new coffee machine could help. Sam’s Club has the De’Longhi Magnifica XS Fully Automatic Espresso and Cappuccino Machine discounted by $350 during this year’s Black Friday sale. You can make espresso drinks, including cappuccinos and lattes for $449.98 instead of $799.98. With its smaller size, you won’t have to worry about it taking up too much counter space.

2. JBL Flip Essential Wireless Bluetooth Speaker: $49.88

Whether you’re shopping for a teen or an adult, a wireless Bluetooth speaker makes a great holiday gift. The JBL Flip Essential Wireless Bluetooth Speaker is on sale for $30 off. You’ll pay a discounted price of $49.88. This waterproof speaker offers 10 hours of playtime. It’s an ideal stocking stuffer that will impress your favorite person without leaving you feeling broke.

3. $500 Southwest Airlines eGift card: $399

Calling all travelers! Sam’s Club is known for selling discounted gift cards. But during sale events like this, the gift card savings can be even more substantial. While supplies last, you can scoop up a Southwest Airlines eGift card with a value of $500 for only $399.

After purchasing, your virtual gift card will be delivered to your email inbox within 48 hours. This gift card can be used to make purchases on the Southwest website, by phone, or at the airport. This deal could make your next vacation more affordable if you’re a frequent traveler.

4. Xbox Series X: $449

If you have a gamer in your life who has been wanting the Xbox Series X, now is the time to buy if you love a good deal. Sam’s Club has the Xbox Series X at a $50 discount. You’ll pay $449 instead of $499, if you shop this deal through Nov. 26. That’s a great price to pay.

5. Dylan Stain-Resistant 6-Seater Sectional: $1,499

Now is a perfect time to update your living room furniture. Sam’s Club members can save $1,000 when buying the Dylan Stain-Resistant 6-Seater Sectional. This sectional sofa includes storage and features a pullout bed. With multi-functionality, you can improve your living room seating and have a place for guests to stay when they visit — all at a reasonable price.

6. $250 Instacart eGift card: $199.98

Here’s another discounted virtual gift card that is worth mentioning. During its Black Friday sale, Sam’s Club has $250 Instacart eGift cards available for $199.98. After purchasing your virtual card, it’ll be delivered by email. If you’re already a regular Instacart user or want to try grocery delivery, this offer could help you keep more money in your bank account.

Holiday sales can help you stretch your dollars

As you shop throughout the holiday season, don’t ignore sales like this one. You can get what you need and stretch your money further with a discount. Don’t forget to use a rewards credit card to pay for your purchases. With one of the best cash back credit cards, you can earn cash back when you shop. Check out our personal finance resources for additional ways to save.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

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It’s stressful when you lose your debit card. See what to expect and what you need to do in this situation. 

Since your debit card is connected to your bank account, not being able to find it is stressful. The immediate concern is that a thief has it and will drain your bank account.

There are legal protections in place for lost and stolen debit cards. Banks are also good at resolving this situation quickly, once they know about it. But this is all dependent on how quickly you take action. Here’s how to handle losing your debit card and what you can expect.

You need to report it ASAP to limit your liability for fraud

As soon as you know your debit card is lost, report it to your bank. You can do this in your online account, through your mobile banking app, or by calling the bank. If you don’t have your bank’s number, go to its website and look for a “Contact Us” section.

The reason this is so crucial is because your fraud liability is based on how soon you report your lost debit card. The table below breaks down the maximum amount of fraud you could be required to pay, based on when you report the loss.

As you can see, acting fast is important. The longer you wait, the more you’re liable for. Fortunately, many banks go above and beyond the legal requirements by offering a $0 liability guarantee. They still normally state in their terms that fraudulent transactions must be reported promptly.

Your bank will cancel your debit card and send you a new one

When you report your debit card lost or stolen, your bank will immediately cancel it. It may also ask you to confirm if recent transactions are valid or unauthorized.

Once your old card is canceled, it can’t be used anymore. Even if you find it later, your bank won’t be able to reactivate it. If you think you might have misplaced your card, you may want to see if you can lock it. If you find it, you can then just unlock it instead of waiting for a new card to arrive.

You’ll receive a replacement debit card to the mailing address you have on file with your bank. Shipping times vary, but with most banks, replacement cards arrive within about five to 10 days. You may be able to request expedited shipping if you need your new debit card right away. Don’t forget to activate your new card when it arrives, if your bank requires that.

You’ll need to update automatic payments set up with your debit card

If you have any bills set to auto pay using your debit card, check when the next payment is due. Since your debit card is canceled once you report it lost, any attempted payments will be declined. Your replacement debit card will have a new card number.

For any bills that are due soon, switch them to a different payment method. Or, if you don’t have one, contact that company and ask if it can postpone your next payment until you have your new debit card. Once you get your replacement debit card, enter the new card information for your automatic bill payments.

By the way, if you have any credit cards, these are typically a better way to pay for bills and everyday expenses. It builds your credit score when you use your credit cards and pay them off on time. Also, you can earn cash back or travel points on those bills if you pay with rewards credit cards.

Losing your debit card isn’t fun, but there’s no reason to panic. If you report it promptly, you won’t be liable for many, if any unauthorized charges. After you get your new card in the mail, you’ll be good to go.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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