Money Management

Anyone who owns or wants to own a home needs to know about mortgage rates. Keep reading for some home loan myth busting. 

Since early 2022, the average 30-year mortgage rate in the United States has risen from about 3% to about 7.6%, as of the latest data. While this makes buying a home far more expensive on a monthly payment basis, there are several things about the rising-rate environment and mortgage rates in general that are not well understood by many prospective home buyers.

Let’s set the record straight. Here are four common mortgage rate misconceptions, and the truth behind each of them.

Myth 1: Rising mortgage rates will lead to lower home prices

This is clearly not a universal truth, as we’ve seen over the past few years. Although the average 30-year fixed mortgage rate in the United States has increased from about 3% to nearly 8% since the beginning of 2022, the median home price has increased by 10% since then.

However, you may have heard statements like “real estate is about to crash — these higher rates will make prices fall.” Maybe, but maybe not.

The reality is that there are many different dynamics that influence home prices, but mortgage rates aren’t the biggest factor. Overall inflation is a big one, and housing supply is another. In fact, the main reason why home prices have continued to rise is a historically low supply of existing homes on the market. There are actually fewer existing homes on the market today than at the peak of the COVID-19 lockdowns, when people literally couldn’t leave their homes to go house hunting.

Myth 2: When the Federal Reserve cuts rates, mortgage rates will fall

To be sure, mortgage rates tend to move in the same direction as the federal funds rate, which is the main benchmark interest rate that is being referred to when you hear “the Fed raised interest rates.”

However, they don’t have a perfect correlation, and it’s entirely possible for mortgage rates and the Fed’s rate activities to do the opposite of one another. For example, in 2017, the Federal Reserve hiked rates several times, but mortgage rates actually declined. And there’s no reason the opposite couldn’t happen.

Myth 3: All lenders have the same mortgage rates

According to a report by LendingTree, 56% of mortgage borrowers accepted the first mortgage rate offer they received. And about half of that group said they were confident they got the best rate. To be perfectly clear, this is one of the costliest home-buying mistakes you can make.

Specifically, many people believe that all mortgage lenders have basically the same interest rates. And others think that a small difference — say, one-eighth of a percentage point — doesn’t really matter. Well, they don’t all have the same rates, and you’d be surprised the difference shopping around can make.

Consider this. Let’s say that you want to buy a $500,000 home with 20% down, so you’ll need a $400,000 mortgage loan. You get two loan offers for 30-year fixed-rate mortgages. The first, from a lender you like, has an APR of 7.625%. The second offers you a lower 7.5% APR, a one-eighth percentage point difference. You might be surprised to learn that the latter will save you more than $12,000 in interest over the 30-year term of the loan. You can plug numbers into a mortgage calculator to see how much you’ll pay based on the interest rate you get.

Myth 4: When rates are high, it’s a bad time to buy a home

Finally, it’s a very common myth that when rates are high compared with recent history, it’s a bad time to buy a home. Logically, this makes sense.

However, there are some factors to consider. For one thing, buyer competition is significantly lower in a high-rate environment. And second, while it’s true that your monthly cost will be significantly higher than if you bought a year or two ago, remember that you aren’t necessarily locked in to the same monthly payment for three decades. If rates drop, it’s easy enough to refinance your mortgage and take advantage.

Plus, there’s a solid argument to be made that buyers have become used to higher rates, and if rates start to fall sharply, it could actually push home prices higher. Real estate expert and Shark Tank star Barbara Corcoran has recently predicted this exact scenario.

The bottom line

By knowing how mortgage rates work and how lenders use them, you’ll be in a better position to make financially sound decisions when shopping for a mortgage and deciding when to start your own home search. One final point is that nobody knows exactly what mortgage rates are going to do in the future — anyone who says otherwise is lying. So, it’s wise to approach the market as if mortgage rates could drop to 5% next year or could rise to 10% just as easily.

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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.
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SNAP benefits have risen, but they’re not keeping pace with rising food costs. Find out how much the maximum benefit is now. 

The Supplemental Nutrition Assistance Program (SNAP) is a federal initiative to help families cover their monthly food costs. SNAP has some specific income and work eligibility requirements, but in general, the program can significantly help lower-income families who need extra help buying food.

More than 22 million U.S. households — 12.5% of the population — receive SNAP benefits, according to Pew Research Center. The program is especially important right now as elevated inflation, rising interest rates, and the generally high cost of nearly everything have strained many Americans’ personal finances.

Each year, the government decides how much SNAP benefits should increase for the next fiscal year, which begins on Oct. 1, and in 2024, the amount has gone up slightly, but not by much.

SNAP benefits have increased for 2024

The U.S. The Department of Agriculture (USDA) recently announced that it will increase the SNAP maximum benefits for a family of four in 2024 to $973. And while the increase is likely welcomed by those using the program, it’s also a relatively modest increase of 3.6% from the previous year’s maximum benefits of $939.

The USDA makes an annual cost-of-living adjustment for SNAP benefits, but the problem with this year’s increase is that it’s not keeping up with the rapid rise in food prices. The USDA cites on its own website that food prices are up by 5.8% on average this year, above the historical average. For example, in 2020, food costs increased by about 3.4%.

The USDA may have made the SNAP benefits adjustment based on food cost predictions for 2024 — which are estimated to rise by 2.1%, instead of looking back on food prices from the previous year. The agency says the average monthly cost for a family of four, using the USDA’s strictest food budget, is $974.

Still, the increase to $973 per month may not go far enough to help some families, especially given the fact that inflation has soared over the past couple of years. If you want to sign up for SNAP benefits, you can do so through your state. You can find local SNAP offices, contact information, eligibility requirements, and online applications on the USDA website.

Food is just one part of a monthly budget

While receiving any type of food assistance is likely welcomed by some families, there’s no getting around the fact that most Americans’ monthly budgets are strained right now. The latest Consumer Price Index figures show how much prices have risen in the following categories over the past year:

Shelter costs are up 7%Gas prices are up 3%Electricity prices have risen 2.6%Transportation services are up 9.1%

With all those expenses rising, it’s unsurprising that Americans aren’t feeling optimistic about their finances right now. Nearly 70% of Americans say the economy is getting worse and not better, according to a recent Suffolk University and USA Today poll. And 49% say rising food prices are one of their biggest concerns.

Keeping track of a month’s worth of expenses is complicated enough on its own, and it’s even harder when prices rise. A budgeting app can be a helpful tool to track where your money is going and even to track how much your spending in specific categories has changed.

There’s no telling what will happen with the economy in 2024. Right now, the job market remains strong, and thankfully, inflation is slowing. But many Americans’ budgets will likely remain strained as their savings rate has fallen and credit card debt has topped $1 trillion.

That may keep demand for SNAP benefits elevated, and it remains to be seen whether the latest increase in benefits for 2024 will be enough.

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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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Have a Trader Joe’s close by? You may want to stop in to check out these great finds. 

Some people love shopping at Trader Joe’s for the savings involved. Thanks to the store’s everyday low prices, you generally don’t have to worry about racking up an unreasonably large credit card tab as long as you exercise self-control when roaming the aisles.

Another great thing about Trader Joe’s is that the store is constantly rotating its grocery product lineup. Here are a few of the fabulous items you might find on the shelves this month.

1. Thanksgiving Stuffing Seasoned Popcorn

Some people don’t love serving appetizers before Thanksgiving dinner because they don’t want their guests’ appetites ruined. If you’re looking for some light snacky items to put out before the main meal, this Trader Joe’s popcorn fits the bill. It’s seasoned with spices that include thyme, parsley, and sage to mimic the taste of stuffing. A five-ounce bag will cost you just $2.99, so grab a few to keep your guests happy until you’re ready to officially declare that dinner is served.

2. A Turkey Walks Into a Pumpkin Patch Cookie Kit

Some people are naturally crafty and able to create turkey-shaped desserts with minimal effort. If you’re not one of those people, you can fake it with help from Trader Joe’s. This kit comes with eight pre-baked sugar cookies shaped like turkeys, along with icing, sprinkles, and other items you and your kids can use to decorate. And it only costs $7.99.

3. Iced Gingerbread Squares

When you think of gingerbread, you think cozy nights by the fireplace and holiday warmth. Trader Joe’s is selling a seven-ounce box of gingerbread squares for $4.99. These bars are soft, chewy, and topped with a deliciously sweet icing. Store them in your freezer until you’re ready to serve them, and then thaw them at room temperature for about an hour before cramming them into your mouth with reckless abandon.

4. Chicken Sausage & Cheddar Cheese Breakfast Bake

Need a great breakfast for the morning after Thanksgiving? If the idea of a turkey and stuffing omelet doesn’t appeal to you, but you don’t see yourself wanting to cook after preparing a massive Thanksgiving feast, then let Trader Joe’s help you take a load off. For $8.99, you can buy a 17.6-ounce box of this savory bread pudding featuring chicken sausage and copious amounts of cheddar cheese. All you need to do is pop it in the oven and serve.

5. Baked Pizza Flavored Pillow Crisps

Trader Joe’s has long been a great source for interesting snacks. And this concoction fits the bill. Imagine a crispy snack shaped like ziti pasta that tastes like pizza. It’s a light, airy, and crunchy creation you might enjoy having on hand for that long stretch between lunch and dinner. A 3.5-ounce bag will cost you just $1.99.

It pays to pop into Trader Joe’s this month to check out these and other awesome products, since they may only be available for a limited time. But do note that all Trader Joe’s Stores will be closed on Thursday, Nov. 23 for Thanksgiving. So if you were hoping to do a last-minute run before your big meal, you may need to rethink that particular plan.

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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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Amazon has lots of great deals happening now. Read on to see how you can save on items for your home and holiday gifts. 

At this point, many people are deep in the throes of holding shopping. You might have a long list of gifts you’ve yet to tackle. And there may be some items you’re hoping to snag for yourself during the holiday shopping season because that’s when discounts tend to be most robust.

Amazon is certain to have several great sales during events like Black Friday and Cyber Monday. But you don’t have to wait until those events to save big. Here are some deals available right now that you may want to look at.

1. National Geographic’s Mega Slime Kit & Putty Lab

For some reason, kids tend to love slime. Parents, of course, tend to hate it. But if you’re a parent who loves your kids, you just might manage to get over your hatred of slime and the sticky, messy residue it leaves behind so you can make your children happy during the holidays. And if you’re going to buy them a slime kit, you might as well do so at a time when you can save money.

This slime kit is normally priced at $29.99, but right now, Amazon is offering it for 18% off, bringing your price down to $24.59. It features eight varieties of slime and putty plus storage tins and accessories so your kids can keep that goop nice and contained.

2. MEROKEETY Women’s Long Sleeve Cable Knit Long Cardigan

With winter being right around the corner, now’s the time to start stocking up on warm, chunky sweaters. This cardigan fits the bill and makes a great gift for someone in your life. Or, buy it for yourself to stay cozy as the weather cools.

Right now, you can save 10% on the normal price of $42.99, bringing your total to $38.69. Best of all, you can choose from a variety of colors, from dark green to light blue to neutral tones if that’s more your jam.

3. Squishmallows 10″ Malcolm The Mushroom

Last year, Squishmallows were all the rage during the holiday season. But a lot of kids are still really eager to get their hands on these cute, soft, squishy creations.

Amazon is discounting this Malcolm the Mushroom Squishmallow by 33%, so instead of paying $29.99, your cost will be just $19.99. At 10 inches in size, it could make a great addition to your child’s nighttime collection. And the more toys your child keeps in their bed, the less likely they may be to ask you to sleep in that bed with them. The result? More shut-eye for you!

4. Ring Video Doorbell

Installing a Ring doorbell may not just make your life more convenient. It’s also a great way to make your home more secure. If you have kids who are old enough to stay by themselves for a bit of time but you like the idea of being able to monitor things at home from afar, then this could be a great investment.

Right now, Amazon is selling this Ring Video Doorbell for $54.99, which is 45% off of its usual price of $99.99. It comes with enhanced features that let you see and speak to visitors from your tablet or phone. Buying this product could give you peace of mind. And it may even result in some savings on your homeowners insurance, so it’s worth reaching out to inquire.

5. iRobot Roomba j6+ Self-Emptying Robot Vacuum

If you have kids or pets, then a robot vacuum is practically a must. Otherwise, you might spend half your day sweeping and still find yourself left with a mess.

Meanwhile, now’s a great time to scoop up this Roomba model for 50% off of its usual price. Since it normally sells for $799.99, you’re still going to end up with a pretty hefty $399.99 credit card charge. But the time savings alone might be worth it if you can afford to make this purchase. Plus, this model empties on its own and is designed to identify obstacles like cords and charging cables to avoid tangles.

These Amazon buys could result in a lot of savings if they’re items you could use. But act quickly. Prices on Amazon can change in a flash, and you don’t want to lose out on the chance to scoop up these items for less.

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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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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Getting a mortgage loan in 2024 will come with challenges. Keep reading to learn why one writer is still cautiously optimistic. 

I’ve been watching the housing market since early 2022, when I decided that homeownership was something I wanted to do again. Originally, it was my intention to attempt it this year, but after I got a better handle on my finances and started watching mortgage rates climb, I decided that I’d hold off until 2024.

I’m not regretting that decision — buying and owning a home is expensive, and since my first attempt at homeownership ended poorly, I have a lot to prove to myself this time. But all of this raises the question: If I’m buying a home in 2024, am I doomed? No — and here’s why.

I’ll pay more for a mortgage…

Buying a home in 2024 is going to mean paying more money for a mortgage loan. Back at the beginning of 2022, the average rate for a 30-year fixed loan was 3.22%, according to data from Freddie Mac. As of this writing, that figure sits at 7.5%. This is a big difference, and it will serve to make my eventual mortgage payments significantly more expensive.

I ran some realistic numbers for home prices, homeowners insurance, and property taxes for my home search through The Ascent’s mortgage calculator, changing only the mortgage rate. (Note that this is based on buying a $225,000 home with a 10% down payment, so private mortgage insurance (PMI) is also included.) Here’s the difference between what I could have paid monthly in early 2022 and what I would likely pay now.

This table doesn’t tell the whole story, though. I have no way of predicting what mortgage rate I’ll be facing next year. Some of the biggest names in the mortgage market have ideas, though. For example, Fannie Mae’s October Housing Forecast predicts mortgage rates above 7% until the third quarter of 2024, and then a drop to 6.9%. Since I intend to buy in the first half of 2024, I’m likely still looking at a rate of at least 7%. I’m still not doomed, though.

…but my finances are in good shape

I’m definitely not thrilled at the prospect of a 7% (or higher) mortgage rate in 2024. But as you saw above, I’ve crunched the numbers for myself. I know how much I’m comfortable paying per month, and even though a higher rate will make my monthly mortgage payment more expensive, I can still handle it.

Having a firm dollar figure in mind, and being unwilling to commit to a larger payment, means I am less likely to end up house poor. House poor is when all your money is going to your home, leaving you nothing left for leisure spending or achieving other financial goals, like investing for retirement — you don’t want this.

Plus, when I do buy, I intend to leave a solid chunk of money in my savings account to serve as my emergency fund. This means that if something breaks, I can pay for it without resorting to debt.

Should you buy a home in 2024?

If you’ve been flirting with the idea of buying a home next year, you might be reluctant to commit based on the current state of the market — and an uncertain future. I absolutely get it. But the prospect of buying a home of your very own is a pretty great one. So here’s what to consider if you’re in the same boat as me.

Get a handle on your finances: This is the most important part of the puzzle. Look at your credit and income and decide how much you can spend per month — and how much you want to spend (as those are likely two different numbers).Shop around for a mortgage: Yes, rates stink. But you have a better shot at getting the best one possible if you talk to a range of mortgage lenders.Save money: If you’re seriously pondering buying in 2024, you might already have money for a down payment and closing costs — I do, and I’m still saving. But given the state of the market, the more you have, the better. Keep saving with me.Connect with your local market: Now is the time to drive around to scout neighborhoods and check prices on Zillow or other home listing sites. Also, start putting out feelers for a good real estate agent, as they will be your biggest ally in this process.

I might not be doomed because I want to buy a house next year, but that doesn’t mean I’m guaranteed smooth sailing in the process. Thankfully, taking the time to think through every angle now means I’ll go into 2024 in the best possible position. If you’re going on this journey with me, make sure you do the same.

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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.Ally is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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