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Money Management

Aug 14
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Home Sales Are Down Almost 19% Annually. Should You Sell Yours ASAP?

By Money Management No Comments

Home sales have been on a decline. Read on to see what that means for your plans to sell. 

Image source: Getty Images

In 2020 and 2021, homeowners were in a prime position to sell. Not only were property values sky-high, but mortgage rates were super low. That made it so sellers could walk away with large profits and use their equity to upsize without taking on horrendously high mortgage payments in the process.

But today’s borrowing environment is very different. Mortgage lenders are charging a lot more interest these days than they were a couple of years ago. As such, buyers have been retreating from the market due to issues with affordability.

In June, existing-home sales fell 3.3% from May, according to the National Association of Realtors (NAR). On a year-over-year basis, they were down 18.9%.

Given this drop in buyer demand, you may be inclined to sell your home ASAP, before its value plunges. But selling your home right now is a move that might backfire on you financially.

The problem with selling a home today

If you’re able to sell your home today and walk away with enough of a profit to buy a new place mortgage-free, then doing so makes sense. That’s because home prices are still elevated. And so if you’ve been looking to downsize, then a near-term sale could make sense. While you might pay up a bit for a replacement home, the profit you score on your current home might more than make up for it.

More: Check out our picks for the best mortgage lenders

But if you expect to need a new mortgage following the sale of your home, then selling right now is a move that could hurt you. Chances are, the interest rate you’re paying on your mortgage at present is considerably less than what you’d be looking at with a new loan. You might struggle to find a replacement home that’s affordable, even if you’re able to command a nice price for the home you’re selling.

Will waiting put you in a bad spot?

Given that home sales are on the decline, you may be eager to sell your home before its market value drops. But home values are likely to hold steady and remain high for the foreseeable future for one big reason: a glaring lack of inventory.

As of June, there was only a 3.1-month supply of available homes on the real estate market, says the NAR. For context, it typically takes a good 4- to 6-month supply of homes to meet buyer demand in full.

We’re also unlikely to see a notable uptick in housing inventory in the coming months due to mortgage rates being as high as they are. Sellers aren’t particularly motivated to list their homes now because they know that doing so might mean giving up a 3% mortgage rate and getting stuck with close to 7% instead.

As such, despite dropping home sales, there’s really no need to rush to sell your home. And waiting could be a better choice financially.

Remember, if you’re able to get more for your home by selling today, then so will another seller. So once again, unless you’re looking to downsize, selling your home and buying another with a mortgage might prove to be far more expensive than you bargained for.

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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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Aug 14
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Declining Sales Aren’t Pushing Home Prices Downward, but You Can Use These 3 Tactics to Negotiate

By Money Management No Comments

Don’t expect a discount on a home purchase just because sales are down. Read on to see how you might be able to negotiate a lower purchase price. 

Image source: Getty Images

Mortgage lenders are no longer offering the attractive borrowing rates home buyers had access to in 2020 and 2021. Quite the opposite — as of early August, the average 30-year mortgage rate was 6.96%, according to Freddie Mac.

It’s largely because of higher mortgage rates that buyers have been retreating from the housing market. And in June, existing-home sales were down almost 19% on an annual basis, according to the National Association of Realtors.

But frustratingly enough, a decline in home sales hasn’t done much to bring property values down. The median sale price for existing homes in June was $410,200. And that’s the second-highest price recorded since January 1999, when this data first started getting tracked.

If you’re looking to buy a home, you may not get much of a discount despite cooling demand. But you can use these tactics to try to negotiate a lower purchase price with your seller.

1. Highlight the flaws

No home is perfect. But expressing concern about the home you’re looking to buy might result in your seller coming down on price.

More: Check out our picks for the best mortgage lenders

Let’s say the appliances are outdated, and the backyard deck looks like it’s seen better days. Highlighting those flaws and explaining how they add to your financial risk might get your seller to lower their asking price. And if not, they might at least agree to make some changes as part of your purchase agreement so that you are less likely to have to sink money into the home once you take ownership.

2. Offer to pay cash

Buying a home in cash may not be possible financially for you. But if you have the money to purchase a home without a mortgage, then doing so might benefit you in a couple of ways.

First, today’s mortgage rates are quite high, so if you don’t need a loan, you may want to avoid one altogether. Secondly, sellers take on less risk when they work with cash buyers compared to those who need financing.

If someone sells to a buyer who needs a mortgage and their home loan falls through, that seller has to start over again. And so if you’re able to pay cash, thereby lowering your seller’s risk, you may be rewarded in the form of a lower purchase price.

3. Be flexible with your closing date

Many people who buy homes want to close as quickly as possible so they can get settled. But your seller may need some flexibility.

Maybe they’re moving for a job that won’t start until October, so they don’t want to close just yet. The more flexible you’re willing to be with your closing date, the more willing a seller might be to lower their price.

You’d think that declining home sales would be leading to lower prices. But alas, it seems that buyers can’t catch a break no matter what. These moves, however, could help shave some money off the cost of your home, making it more affordable at a time when residential real estate is anything but.

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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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Aug 14
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Here’s How Much You Need to Make to Be in the Top 1% in Every State

By Money Management No Comments

Curious about what salary you’d need to be one of the highest earners in your state? Read on to find out! 

Image source: Getty Images

There’s no denying that the American dream includes financial security and prosperity. It’s safe to say that everyone wants to be successful and achieve a certain level of wealth. However, the value of achieving the “top 1%” in each state can vary significantly. In the United States, households with an income of $652,657 or higher are considered part of the top 1%. These households earn over eight times the amount of the median household income, which is around $75,000.

However, what might be considered wealthy in one state may not be the same in another. Have you ever wondered how much you need to make to be in the top 1% of households in your state? According to a recent study by SmartAsset, the number varies widely from nearly $370,000 to just over $950,000. Here is the breakdown of each state.

Coastal states have the highest income floor

Connecticut has the highest floor for the top 1%. You need to earn a staggering $952,902 to be in the top 1% of households in Connecticut — more than any other state in 2023. Massachusetts ($903,401) and California ($844,266) have the second and third-highest thresholds for entering the top 1%, respectively.

With New Jersey, Washington, and New York next on the list, the data shows that the states on the East and West Coasts have a higher cost of living than the rest of the country. If Washington D.C. were a state, it would claim the overall number one spot. To be considered part of the top 1%, households there must have an income of at least $1,013,698.

Based on the analysis by the Congressional Budget Office, the wealthiest 1% of families in the United States possess more than one-third of the country’s wealth, while the bottom 50% of households only own a mere 2%. The wealthy get a larger share of their income from investments than lower earners do. In fact, the top 5% of earners get over two-thirds of their income from investments. The rich also have more sources of income.

Southern states have the lowest income floor

On the other hand, some Southern states have lower income thresholds, which mean it takes less income to be considered in the top 1%. For example, residents in West Virginia only need to earn $367,582 to reach the top 1%, which is the lowest amount of income in the study.

Six of the 10 states with the lowest income thresholds are located in the Southeast. These numbers suggest that, generally speaking, the cost of living may be lower in these states.

Tax rates are higher in higher threshold states

While discussing the income thresholds, it is also essential to consider the effective tax rates for top earners in different states. Connecticut is home to the highest effective tax rate for top earners (28.4%). States in the top five rankings also have tax rates averaging in the high 20s.

In contrast, Arkansas taxes the top 1% at an average rate of just 21.11% — less than any other state. The tax rates in the bottom states average in the low 20s, percentage-wise. This data suggests that there are significant differences in the income distribution and taxation across states.

Rank State Top 1% threshold 1% tax rate 1 Connecticut $952,902 28.40% 2 Massachusetts $903,401 27.15% 3 California $844,266 26.95% 4 New Jersey $817,346 28.01% 5 Washington $804,853 25.99% 6 New York $776,662 28.29% 7 Colorado $709,092 25.86% 8 Florida $694,987 25.82% 9 Illinois $660,810 26.35% 10 New Hampshire $659,037 26.25% 11 Wyoming $656,118 24.79% 12 Virginia $643,848 26.11% 13 Maryland $633,333 25.94% 14 Texas $631,849 25.83% 15 Utah $630,544 23.77% 16 Minnesota $626,451 25.53% 17 Nevada $603,751 25.19% 18 South Dakota $590,373 22.99% 19 Pennsylvania $588,702 24.95% 20 North Dakota $585,556 24.76% 21 Georgia $585,397 25.06% 22 Oregon $571,813 24.66% 23 Arizona $564,031 25.22% 24 Idaho $560,040 23.17% 25 North Carolina $559,762 25.31% 26 Montana $559,656 24.46% 27 Kansas $554,912 25.03% 28 Rhode Island $548,531 25.26% 29 Tennessee $548,329 25.12% 30 Alaska $542,824 25.38% 31 Nebraska $535,651 24.10% 32 Delaware $529,928 25.37% 33 Vermont $518,039 23.63% 34 Wisconsin $517,321 24.90% 35 South Carolina $508,427 24.40% 36 Michigan $504,671 25.01% 37 Maine $502,605 24.04% 38 Missouri $500,626 24.93% 39 Ohio $500,253 25.09% 40 Hawaii $495,263 24.12% 41 Iowa $483,985 24.09% 42 Indiana $473,685 24.55% 43 Alabama $470,341 23.82% 44 Oklahoma $460,172 23.68% 45 Louisiana $458,269 24.80% 46 Arkansas $450,700 21.11% 47 Kentucky $445,294 24.14% 48 New Mexico $411,395 23.35% 49 Mississippi $381,919 23.04% 50 West Virginia $367,582 23.26%
Data source: SmartAsset

How to increase your income

Increasing your income can seem like a daunting task, but with the right mindset and strategy, it’s entirely achievable. First and foremost, assess your current earning potential and identify any skills or training you need to acquire to advance in your career.

Consider exploring job opportunities with higher earning potential or negotiating a raise with your current employer. Another option is to start a side hustle or freelance gig in a field that you are passionate about and have expertise in.

Additionally, take advantage of investment opportunities such as the stock market or real estate. These can generate passive income over time. Remember, increasing your income requires diligence and effort, but the rewards can be well worth it.

Being in the top 1% of households varies across different states. While some states have high income thresholds, others require significantly less income to be considered wealthy. Income thresholds also vary greatly depending on the state’s location, population, and size. It is essential to remember that being in the top 1% is a relative measure, and what may be considered wealthy in one state may not be the same in another. Knowing where your state stands can help you understand its economic and financial status compared to others.

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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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Aug 14
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6 Things You Should Know Before Buying a Home in Retirement

By Money Management No Comments

 A little knowledge helps you overcome key obstacles when buying new digs during your golden years. NassornSnitwong / Shutterstock.com

Retirees, even those who’ve owned a home for decades, can face unaccustomed challenges when buying a home. As you approach or enter retirement, you are likely to be thinking less about good schools and more about good hospitals and public transportation. Older home shoppers may favor smaller, single-story homes. Many seek out features to help them age in place — like wide halls and doorways…

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Aug 14
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Uber Eats vs. DoorDash: Who Pays More?

By Money Management No Comments

Which of the two popular food delivery platforms is the better employer for you? Here’s what you need to know. 

Image source: Getty Images

Uber Eats and DoorDash are the two largest food delivery platforms in the United States by a wide margin. But if you have extra time and need a side hustle or a flexible full-time job, which is the better choice for you?

To be clear, the income that drivers make with either Uber Eats or DoorDash can vary considerably based on location, the hours the driver chooses to work, and several other factors. With that in mind, here are some statistics from reliable sources.

How much do Uber Eats drivers make?

Uber Eats Drivers earn a base fare that ranges from $2 to $4 per delivery, as well as pick-up and drop-off fees for the time and effort involved with driving to the restaurant and traveling to the customer. They also get a trip supplement designed to compensate for longer trips, and there may be surge pricing at certain times or other incentives designed to encourage drivers to work during busy times. Finally, Uber Eats drivers receive tips from customers, and this averages $2 to $5 per delivery, according to Entrepreneur magazine.

All together, drivers average $19 per hour, which translates to a $39,448 annual income based on a standard 40-hour work week, according to ZipRecruiter. The platform finds that a driver in the 25th percentile makes $15.87 per hour and the 75th percentile is $20.43.

According to Indeed, the average Uber Eats income is a bit lower, at $17.31 per hour. And it’s important to note that these figures are before expenses like gas and vehicle maintenance.

How much do DoorDash drivers make?

DoorDash has a similar pay structure to Uber Eats. It offers base pay that generally runs from $2 to $10 per ride, and this includes any distance- or time-related additions. There can be surge pricing (which DoorDash calls Peak Pay) as well as other promotions and incentives, and DoorDash drivers receive tips.

According to SmallBizTrends, most DoorDash drivers earn between $15 and $25 per hour. ZipRecruiter found that the average earnings on DoorDash is $19 per hour, the same as it found for Uber Eats.

Differences to know

Beyond any pay differences (which don’t appear to be much), there are a few other things to keep in mind.

For one thing, DoorDash is the larger of the two platforms, with roughly 65% of the U.S. food delivery market. And DoorDash makes it easier to schedule working hours up to a week in advance or at the last minute if you have extra time, whereas Uber Eats doesn’t offer the ability to schedule in advance. Plus, DoorDash continually adds opportunities beyond food — it started Package Pickup in early 2023, where its drivers pick up pre-paid packages from customers to drop off at FedEx, UPS, or USPS, and the company also partners with Tractor Supply to deliver products to customers’ homes.

Uber Eats is more exclusively focused on restaurant delivery and has about one-fourth of the U.S. food delivery market. (Note: If you do the math, you can see how these two companies combine for a dominant market share.)

Both platforms have similar driver requirements and allow their drivers to keep 100% of the tips they receive. One major difference is that DoorDash has a minimum age of 18 to deliver, while Uber Eats requires those who deliver by car or scooter to be at least 19. And both platforms pay their drivers via direct deposit to their checking account once a week, and also offer instant-pay features (for a fee).

The bottom line

The question of who pays more between Uber Eats and DoorDash is a more difficult one to answer than you might think, simply because there are so many variables that go into the earnings potential from either platform. There’s no definitive evidence that drivers on one platform make significantly more than drivers on the other, so you may need to look beyond pay, or try both platforms before deciding which is the best fit for you.

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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.Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash and Uber Technologies. The Motley Fool has a disclosure policy.

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Aug 14
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Should You Go to Mexico for a Medical Procedure?

By Money Management No Comments

More than 1 million Americans head to Mexico for medical care each year. Find out what you should know if you’re hoping to do the same. 

Image source: Getty Images

As an expatriate, my husband and I once made our home in Central Mexico. One of the first things we did after moving was find new medical providers. While living in Mexico, we had medical exams, minor surgery, and regular dental checkups. In each case, we were pleased with the care and results.

That said, there is a lot to consider before jumping on a plane to travel to Mexico for a medical procedure. Here’s what to know.

Popularity of Mexican medical care

In the years leading up to the pandemic, approximately 1.2 million people living in the U.S. traveled to Mexico for healthcare, and it’s easy to identify why. According to Josef Woodman, CEO of Patients Beyond Borders, U.S. residents can save 40% to 60% off the cost of similar treatments and procedures at U.S. hospitals or clinics. That can be a big difference in your personal finances.

Simply put, some people go to Mexico because the cost of U.S. healthcare is beyond reach for them. Others travel to Mexico to combine a medical procedure with a mini-vacation. And some folks just don’t want anyone in their town knowing their medical business.

Questions to ask yourself

Whatever the reason for traveling to Mexico for medical treatment, there are questions you’ll want to answer before booking an appointment.

Will you be safe?

No matter where a medical procedure is performed, there are risks involved. However, running into a problem in a foreign country comes with its own set of questions. For example:

Where will you stay? Are you familiar with the area? Are there any State Department advisories?How long will you need to stay? If you’re flying, some procedures require you to wait before flying in a pressurized plane cabin.Will you have someone with you to help you after your procedure?Will you need follow-up care in Mexico? If so, do you have enough cash in your checking account to cover the cost of another trip?What happens if you run into a problem once you get home? It’s important to note that some doctors will not provide follow-up care to patients who experience complications after returning home.

Will there be a language barrier?

If you don’t speak Spanish, you’ll need people who can interpret for you. Medical procedures can be stressful, and you’ll want someone who can calmly walk you through what you can expect.

Have I spoken with previous patients?

In an ideal world, you would travel with someone who knows the area well and has experienced medical care in the same hospital, clinic, or medical office. However, that’s not always possible. Before planning a trip, ask the medical provider’s office to share the contact information of past patients (preferably, other Americans who have undergone the same procedure).

When a medical office provides you with contact information for past patients, they only put you in touch with people who were happy with the outcome. Make it a point to check online for reviews, including anything you can find on public forums like Reddit.

What happens if things go wrong?

Ask which hospital(s) the doctor is affiliated with and how far the hospital is from their office. If you’ll be staying in Mexico to recover, find out how far the hospital is from your hotel.

If the procedure you’re undergoing in Mexico is not covered by insurance in the U.S. (like cosmetic surgery), any U.S. insurance you carry will probably not cover the cost of complications.

A 2017 study published in Plastic Recontructive Surgery followed 42 patients for 36 months. Patients ranged in age from 20 to 60. Among those who needed to treat complications that arose after returning home, the average cost was $18,211. Unless you have an emergency savings account to cover a medical emergency, you may consider waiting.

Finally, it’s not always possible to hold a foreign doctor responsible if things go wrong. Medical malpractice laws vary by country, and when you receive medical care outside the U.S., you run the risk that the other country’s laws are more restrictive and do not allow injury victims to receive full compensation.

How can I know if my doctor is board certified?

One of the reasons my husband and I were so happy with the medical care we received while living in Mexico may be due to the homework we did before booking an appointment. The first step was to ensure the doctor was licensed. The easiest way to do that is to ask your doctor to provide their medical license number (called “cédula profesional” in Spanish). Next, we asked about where they attended medical school (several of ours trained in the U.S.).

If you’re planning plastic surgery, you’ll also need to ask for their Mexican Association of Plastic, Aesthetic, and Reconstructive Surgery (AMCPER) certification. Check out the information provided on the AMCPER website. Check again on the Consejo Mexicano de Cirugía Plástica, Estética y Reconstructiva website. If you click on “Especialistas Certificados” you should find the information you need.

Bottom line

Like the United States, some parts of Mexico are safer than others, and some doctors are better than their counterparts. If you’re confident you want to travel to Mexico for medical care, ask so many questions that people begin to wonder if you’re investigating their operations. Reputable medical practices will appreciate your efforts.

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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.Dana George has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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