Money Management

You may be able to get an even better price when flying with Southwest. 

Southwest Airlines does things differently than many other airlines. There are no change fees or cancellation fees as long as you cancel your flight within 10 minutes of departure, and every customer can check two bags for free. With its flexible policies and friendly customer service, it’s no wonder why so many travelers like flying with this airline. But some fliers may not realize that they can rebook a previously reserved Southwest ticket for a lower price when prices drop. Find out how to get the best airfare deal when flying Southwest.

Changing your flight could offer significant savings

Southwest doesn’t charge change fees. After booking a flight, you should keep an eye on airfare prices for your route to see if the price drops before your departure date. If the airfare has decreased since your initial booking, you can change your flight to secure the new, lower price. Southwest will refund you the price difference. You can change flights easily online.

It’s important to know that while all Southwest fares are refundable as long as you cancel at least 10 minutes before departure, the type of fare you book determines how your refund is issued. Here’s a breakdown of what kind of refund you can expect by fare type:

Wanna Get Away: Flight creditWanna Get Away Plus: Transferable flight credit for Rapid Rewards membersAnytime: Refunded to your original form of paymentBusiness Select: Refunded to your original form of payment

Southwest flight credits used to have an expiration date. However, that’s no longer the case. You can hold on to your flight credit without worrying about it expiring before you can use it.

This is the best way to monitor Southwest ticket prices

You may notice that Southwest fares won’t appear when you use airline price comparison tools. That’s because the airline prohibits others from accessing its pricing data. You’ll need to use the Southwest website or mobile app to monitor prices. It’s not a bad idea to check prices every so often after you book a flight to make sure the fare hasn’t gotten cheaper. If you don’t, you may pay more than necessary for your flight.

Other ways to save money on Southwest flights

Changing your flight to secure a lower price is a great way to save money on travel costs. For many travelers, the savings may be significant. Here are a few additional ways to save money when traveling with Southwest:

Book Wanna Get Away fares: If you’re on a budget, you can save money by booking Wanna Get Away fares. This is the most affordable fare that Southwest offers.Look for airfare sales: Southwest promotes flight sales several times a year. You can get a great deal if you buy during a sale.Get a Southwest credit card: You can earn Rapid Rewards points by using a Southwest credit card and can redeem your points for free Southwest flights in the future. When you travel for free with credit card points, it’s easier to stretch your vacation budget further.

If you’re a Southwest loyalist, don’t miss out on the chance to score a better deal. Monitoring airfare prices and changing your flight when prices drop could help you save on travel costs. Review our list of the best Southwest credit cards to learn more about how to earn rewards.

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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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Rent is still unaffordable in some areas, but the worst may be behind us. 

The days of skyrocketing rents may be behind us, at least for now. According to Redfin, rent prices rose 2% in January, representing the smallest increase in 20 months. In addition, the median rent price in the U.S. fell to $1,942, the lowest it’s been in nearly a year.

Why rents are falling

There are two primary reasons rental prices are taking a tumble.

1. Demand has cooled

The reality is that rents are still too high. In fact, they remain 22.5% higher than in January 2020, before COVID-19 became a household phrase. That 22.5% increase has priced many households out of the market, and people who might have made a move this year are waiting until prices become more reasonable and they don’t have to drain their bank accounts to keep a roof over their heads.

And for renters, it’s not just sky-high rent prices. They’re also dealing with inflation and economic uncertainty. Despite an excellent job market, U.S. workers don’t trust that their employers will keep them on the job the next time there’s a financial bump in the road.

There is little motivation on the part of renters to “move up” into an even more expensive rental.

2. Optimism on the building front

Business is returning to a semblance of normal for builders across the country, and those builders are feeling good about the future. According to the National Association of Home Builders/Wells Fargo Housing Market Index, homebuilder confidence in the market rose seven points to 42 in February. While 42 may not be a great number, it’s still the most significant monthly jump in confidence since June 2013.

As the Federal Reserve becomes confident that interest rate hikes have helped cool inflation, it is likely to begin lowering those rates. While that’s good news for anyone looking for a mortgage, it’s also good news for builders.

As a bonus, dropping interest rates mean investors are in a better position to build the apartment complexes and rental homes that have been on the back burner. And the further we move from the initial stages of the pandemic, the more the supply chain opens up, bringing builders the supplies they need to build new communities.

In addition, according to Redfin, an increasing number of people are now opting to rent out their homes instead of selling, which further increases inventory.

Renters know that it’s just a matter of time before prices fall and they have no interest in overpaying. The lack of market demand has helped put a lid on out-of-control pricing.

Not everyone is feeling it yet

If you live in Raleigh, North Carolina, Cleveland, Ohio, or Charlotte, North Carolina, you’re keenly aware that rents remain unreasonably high. The factors at play in other parts of the country have not reached you yet. In fact, Raleigh experienced the most significant year-over-year rent increase, at 22.5%.

It’s renters in cities like Phoenix, Arizona, Oklahoma City, Oklahoma, New Orleans, Louisiana, and Minneapolis, Minnesota who are currently benefiting from price drops. The hope is that it will make its way to other cities sooner rather than later.

In the meantime, it’s good to know that brighter days may be ahead for millions of American renters — and those days can’t come soon 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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It’s a nice thing to consider. 

In June 2022, the Consumer Price Index (CPI), which measures changes in the cost of consumer goods, rose 9.1% on an annual basis. And that summer, a lot of people had to go to the extreme of raiding their savings accounts and racking up debt on their credit cards just to stay afloat.

Since then, annual CPI readings have been considerably lower. And most recently, in January, the CPI only rose 6.4% on an annual basis (“only” being a relative term).

Because CPI readings have been dropping consistently since June, many economists feel that we’re past the peak of inflation, and that things should get better from here on out. But can the same be said for mortgage rates?

Rates are down, but will they stay down?

In October and November of 2022, the average rate on a 30-year mortgage was over 7%. As of early February, it was just over 6%.

Clearly, that’s a nice improvement. But it may be premature to say with certainty that mortgage rates have already peaked and won’t rise again.

The tricky thing about mortgage rates is that they can rise and fall independently, without regard to other economic factors. In 2022, for example, mortgage rates started rising before the Federal Reserve got aggressive with its interest rate hikes. So while those hikes drove up the cost of other types of borrowing, mortgages were already more expensive to sign by the time consumers were impacted in other areas.

Because mortgage rates can be unpredictable, it’s hard to say for sure whether they’ve peaked. But it’s likely that they have, because they’ve dipped considerably since the fall of 2022.

Also, mortgage lenders are aware that home price gains are slowing down, and that buyer demand is starting to wane in light of affordability issues. So if those lenders want to stay in business, they’re going to need to stay competitive. And that means offering up lower interest rates than what they were giving out in the fall of 2022.

How low could mortgage rates go in 2023?

That, too, is hard to say. While there’s a very good chance mortgage rates will fall to the 5% range this year — and possibly even during the first quarter of the year — it’s difficult to predict whether we’ll be seeing sub-5% mortgage rates in the course of 2023.

But those looking to buy a home may want to fixate less so on rates and more so on home prices. Someone who buys a home for $500,000 will never be able to change the sum of money they plunked down on a home purchase. But someone who locks in a mortgage at 6.15% can always refinance that loan to 5.15% if rates fall.

And mortgage rates are bound to fall from where they are today. It could take a while to get back to sub-5% mortgages, but it’s apt to happen eventually. And when it does, those with higher mortgage rates will have a prime opportunity to start reaping some savings.

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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.

 Read More