Money Management

You can save thousands of dollars on interest each year, thanks to 2024’s lower mortgage rates. Keep reading to learn more about this development. [[{“value”:”

Many would-be home buyers have stayed on the sidelines over the past couple of years, as high home prices and rapidly rising mortgage rates combined to make homeownership far less affordable for the average American.

However, despite persistent high home prices, homeownership has become significantly more affordable over the past year due to the falling interest rate environment. And you might be shocked at how much of a difference a change in mortgage rates can make.

Home prices haven’t cooled off

You might be surprised that I’m calling homes more affordable, especially because home prices went up over the past year. According to Zillow, the average U.S. home value is currently $361,282, which represents a 2.9% gain over the past year.

Doing some math, this means that the average home in the United States was worth $351,100 a year ago. So, why is it more affordable to buy right now?

Mortgage rates make a big difference

The short answer to why homes are more affordable now is that the average mortgage rate has cooled off considerably from the generational highs we saw in 2023. In October 2023, the average 30-year mortgage rate peaked at 7.90%, according to the Mortgage Bankers Association.

As of Oct. 2 of this year, the average 30-year mortgage rate has retreated to 6.14%. This is about double the average mortgage rate at the start of 2022, so home affordability is nowhere near where it was a few years ago. But this change can still make a big difference in your costs.

Consider this example. As mentioned, the average home in the U.S. was worth $351,100 a year ago. At a 7.9% 30-year mortgage rate, and assuming a 20% down payment, the monthly principal and interest payment would be $2,041, according to The Ascent’s mortgage calculator.

Now, even though the average home is worth about $10,000 more, the lower average mortgage rate of 6.14% would generate a monthly principal and interest payment of $1,760 — or $281 less than you’d pay for the same home a year ago.

To be clear, these payments don’t include property taxes or insurance, which are typically paid along with the mortgage. But a monthly payment of nearly $300 less can make a significant difference in home affordability for many people. After all, savings of $281 per month is a savings of $3,372 in interest per year, or more than $101,000 over the life of a 30-year mortgage loan.

To be sure, 6.14% is just the average mortgage rate. Check out our top mortgage lenders to get personalized rate quotes right now.

Will mortgage rates continue to fall in 2025?

To be perfectly clear, nobody can accurately predict what mortgage rates will be at any given point in the future, and I’m certainly not an exception. And although the Federal Reserve recently cut its benchmark interest rate and is expected to do so several more times over the coming months, that doesn’t automatically mean mortgage rates will fall further. In fact, a big reason why rates have already fallen so much is because of the current interest rate expectations.

Having said that, most experts believe that (assuming the Fed’s rate cuts proceed as expected) mortgage rates will continue to gravitate lower. For example, Fannie Mae predicts that the average 30-year mortgage rate will drop to 5.7% by the end of 2025.

While rates could indeed fall further, the point is that it has become much more affordable to buy the average home in the United States compared with a year ago. And if rates continue to drop, it will get even better. But that doesn’t mean you need to wait. If you can afford the monthly payment on a home right now, you can go ahead and pull the trigger and simply refinance your mortgage if rates end up falling further.

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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.Matt Frankel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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Housing is up again, but you don’t have to pay more. Here are some tips for getting your housing costs down and keeping them there. [[{“value”:”

The Bureau of Labor Statistics just released the most recent Consumer Price Index for the cost of pretty much everything from September 2024. It’s no surprise that costs are still rising, but what was a bit eye-opening was that housing was once again up 0.2% from August 2024, pushing the rise in cost of shelter for the year ending September 2024 to 4.9%.

Even as housing prices plateau and mortgage rates start to ease, costs just keep going up, both for homeowners and renters alike. But don’t despair. You can find more affordable housing, even if you live in an expensive city. Here are some tips for fitting it into your budget.

1. If you rent, buy a house

Look, I know this is a tall order, and please don’t stop reading because I led with it. But the fact is that buying a house is the best way to fix your housing costs for the long term.

While rent will continue to climb, when you buy a house with a fixed-rate mortgage, your principal and interest payment stays the same for the life of that loan. Yes, other expenses like insurance and taxes may rise, but those are often very small when compared to yearly rent increases.

Even if you don’t think you can qualify, it doesn’t hurt to find out. Click here for our list of the best mortgage lenders and see what rates they offer. They also have lots of low down payment programs for first-time home buyers, so be sure to ask about that, as well.

2. Look for a house a little further out of the hot spots

Housing is hard to price because none of it is identical. This also means that properties with higher demand, such as those near city centers or near really great schools, are often the most expensive. I’m not saying you need to sacrifice your child’s education or your fun time, but I am saying that the further away you are, the better housing deals you might find.

So what if you have to drive 30 minutes to get to the downtown of your city? How often do you go there anyway? Is it really worth the premium you’ll pay to live nearby for a few hours every weekend?

Consider the distance a fair exchange for your housing costs, and look for a place that’s further away from the action, but still close enough that it’s not hard to pop in when you do want to be there.

3. Choose a place that’s less than perfect

There’s less than perfect and then there are total dumps, and there’s a huge difference here. What I’m talking about is choosing a place that maybe hasn’t just been repainted in Millennial Gray and might instead still have linoleum in the kitchen. As long as it’s in good shape, you still have a nice place to live, even if it’s not caught up to the most recent design trends.

Those trends will come and go, but your housing costs will eat you alive if you are always chasing perfection and aren’t willing to take a place and make it your own. This goes doubly for buyers, who are likely to want to repaint or change the fixtures to suit their own taste, even if the house was just redone.

Ask any refinance lender about it, people want what they want. You might as well pay less every month and make the place your home — you’re gonna do it eventually anyway.

4. Consider renting out part of your home

Roommates can be a pain, but there are other ways to rent out part of your home that give you more control. For example, if you have a bedroom with a bathroom attached to it (bonus if there’s an exterior door), you can set it up as a short-term rental. You may never even see your guests, and they’re going to pay a lot more than a roommate would for being there less.

There are other options, too, depending on what your property has to offer. People with big fenced backyards may want to look into renting their lawn to dog owners through private dog park rental services, or if you have a pool, these are often able to be rented by the hour. If you have extra garage space, folks will often pay to store their boats, motorcycles, or other large items somewhere out of the elements.

You can take some control back over your housing costs

I was a Realtor for a long time, and it always surprises me that many people simply don’t know that they have options to take control of their housing costs. You can buy a house, which fixes a lot of your housing expenses over the long term, or at least choose a home further from the action, where you aren’t paying a premium to be close to noise, lights, and way too many people.

You have the ability to lower your costs. You just may have to get a little creative right now while prices continue to climb beyond the rate of inflation.

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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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When I visited my local Costco recently, I wasn’t sure what to expect. Read on to learn about this new member’s first impressions. [[{“value”:”

After much hemming and hawing, I finally joined Costco via its website a few weeks ago. I bought a house earlier this year, and I’ve got more storage space now, plus I was eager to maximize a Costco membership by taking advantage of deals on appliances, furniture, electronics, and more.

I recently visited the store location closest to me (which is an hour away), and it was an eye-opening experience. Here are five impressions from my first Costco visit.

1. Gas was noticeably cheaper than other stations in the area

We got gas after exploring the store, but we did notice the Costco gas station (and its prices) on our way to the parking lot. My shopping companion has one of the best cards for gas, but since it’s an Amex, we couldn’t use it to buy Costco gas — Costco only accepts Visa.

Click here for a round-up of the best cards for Costco shopping to help you earn at least 1.5% back on your Costco buys, including gas.

In addition to earning cash back with the right credit card, Costco gas was a deal in another way — the cost was just $2.55 per gallon, which was tied for the lowest price in the area. Plus, Costco gas is TOP TIER™ certified, meaning it’s formulated to clean a car’s engine and help it run better.

2. I was able to get inside before the official opening time

This shopping trip was more like a triage mission — I needed to visit in-person to get my membership card, and while I had already placed an order on Costco.com, I wanted to actually lay eyes on what Costco sells in the warehouse closest to my home. (Plus, I wanted some of those bakery muffins my colleague Maurie Backman raves about.)

But I was a bit concerned about the famous Costco crowds, so I visited on a weekday morning at opening time. My shopping companion and I pulled into the parking lot about 10 minutes before Costco’s official opening time, but we saw lots of shoppers getting carts and heading for the entrance, so we followed suit.

I figured we’d have to wait outside for some beleaguered employee to unlock the doors — but we were able to head right inside.

3. Employees are friendly and helpful

After we got inside, I showed my membership confirmation email to the card checker at the front door, and she directed us around to the customer service desk for assistance. It was super fast and easy to become an official member — a customer service rep took my photo and created the card basically instantaneously. And I was told “Welcome to Costco!” by three different friendly employees during my visit.

It’s perhaps not so surprising that the Costco staff is dedicated to the job — Costco gets pretty high ratings from employees (4.0 and 3.9 out of 5 on Indeed and Glassdoor, respectively). Reddit posts and comments from employees suggest the job itself is pretty good, and the pay and benefits are decent. But like in other retail gigs, the customers can be rude and entitled, and dealing with them is the worst part of the job.

4. The store was well-stocked and easy to navigate

I was also incredibly impressed with the layout of the store I visited. Part of my reasoning in arriving early was to enjoy less-crowded aisles and a shorter wait to check out. I was also assuming that the store would be difficult to navigate, but I didn’t find this to be the case at all. Perishables like meat, bakery items, and produce were in a central location, and all other items were organized around them.

Displays were fully stocked, aisles were wide and accommodating of multiple shopping carts, and at no point did I get stuck behind a fellow shopper oblivious to others around them. (Despite the stocked aisles, I suspect the shopping experience would have been less pleasant if I’d opted to visit on a Saturday or Sunday.)

5. I wasn’t asked to upgrade my membership

Based on the numbers for the Costco Executive membership (as of Q4 2024, 35.4 million Costco memberships are of the higher tier) and also Reddit posts, I was expecting to be harangued about upgrading from Gold Star to Executive. The primary difference, besides the price ($65 yearly vs. $130 yearly), is that Executive members earn a 2% rewards certificate back on their purchases once per year.

When I joined several weeks ago, I opted for the Gold Star membership because of how far I live from the store, and the fact that I don’t expect to come anywhere close to the level of spending ($3,250) that would justify the higher tier in rewards alone.

But to my mild surprise, no one asked me about upgrading my membership. I’m left wondering if the staff (or perhaps the management) at some warehouse locations are just more zealous than others. Or maybe it was just that I was a brand-new member.

All in all, I was impressed with Costco, and I had a great time on my first visit. I even got some intel from the cashier I checked out with — Costco might be building a new warehouse closer to my city in the near future. So fingers crossed!

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

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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.American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Costco Wholesale and Visa. The Motley Fool has a disclosure policy.

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It’s not too late to get a good deal when booking holiday flights. Here’s when to book flights to land the lowest airfare prices for Christmas 2024 travel. [[{“value”:”

If you haven’t started to think about your holiday travel plans, now is the ideal time to get planning. You can keep more money in your checking account by booking your holiday travel arrangements sooner rather than later.

Otherwise, you may spend much more than you have budgeted for, which could cause added financial stress. Let’s discuss the best time to book for the cheapest Christmas flight prices.

Late October is the best time to book cheap holiday flights

Google Flights is a free airfare price comparison tool that makes it easier to find cheap flights. The Google Flights 2024 Travel Trends report includes valuable flight pricing information to help you save money when buying flights for the upcoming holidays.

When compiling this report, Google examined historical flight pricing data to determine when travelers should book airfare to score cheaper tickets for Christmas 2024.

According to Google’s research, domestic flight prices for Christmas have historically been at their lowest 58 days before departure. Low airfare prices tend to be available 36 to 72 days out for Christmas travel.

So, if you want to depart for your destination on Tuesday, Dec. 24 — booking domestic airfare around Oct. 27 is a good strategy to book the cheapest tickets. But you will likely still find domestic airfare prices to be low from Oct. 13 through Nov. 18.

Want to avoid spending more than necessary on holiday flights? Based on the findings discussed above, Google suggests buying plane tickets in the second half of October.

Google Flights includes useful search filters to help you compare airfare across multiple carriers. Features like the date grid and price graph allow you to find the cheapest dates to fly. If your travel dates are somewhat flexible, you can save even more on holiday airfare costs.

Don’t miss out on travel rewards

Tools like Google Flights can help you keep your travel spending in check. Another way to save on travel is by earning rewards. One easy way to do this is by using rewards credit cards. You can earn rewards (like points or airline miles) when you swipe your credit card for travel expenses like hotels, flights, and rental cars.

Ready to find out how easy it is to earn credit card rewards when you travel? Explore our curated list of the top travel credit cards with big rewards.

Another way to earn rewards when you travel is by joining loyalty programs. Most airlines and hotel brands offer these programs for free. You can earn points or miles when you make travel bookings and redeem your rewards for free travel.

These loyalty programs also offer valuable benefits that can help make travel more enjoyable. Some examples include early boarding perks, free checked bags, members-only pricing for hotel rooms, and complimentary hotel amenities for those who qualify.

Earning travel rewards can save you money on your next vacation. Do you prefer to earn cash back rewards? Check out our list of the top cash back credit cards to find the best rewards card for you.

Timing is everything

Don’t wait until the last minute to make your Christmas travel arrangements. By being strategic with timing when you buy your tickets, you can keep more money in your pocket.

Now is a good time to start researching airfare prices with Google Flights. After performing a search, you can enable the track prices feature. Once you do this, Google will send you email alerts when ticket prices drop so you can score the cheapest tickets in the coming weeks.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

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The Fed’s rate drop impacts HYSA interest APYs. Here’s how to know if it’s time to switch accounts or stay put, as well as alternatives for higher returns. [[{“value”:”

Earlier this month, the Federal Reserve dropped its benchmark interest rate by half a percentage point. Since the interest rates offered by high-yield savings accounts (HYSAs) are impacted by the Fed’s benchmark rate, there’s a good chance that your HYSA’s interest rate will drop as well.

In fact, you may have already noticed a lower APY on your account. But does that mean it is time to move your savings out of your HYSA and into a more lucrative account? Before you start moving money around, here are a few things to consider.

Does your HYSA offer a competitive rate?

Not all HYSAs offer the same interest rate. Compare your current interest rates to rates offered by other banks. You may be able to earn slightly more by switching to another bank or credit union. Some banks offer sign-up bonuses, which can help pad your savings even more.

Looking for a new HYSA to maximize your savings and earn a top APY? Click here to see our curated list of high-yield savings accounts, chosen by our experts.

What is your HYSA fund for?

HYSAs earn more interest than traditional savings accounts, but it’s still relatively low compared to other investment opportunities, like stocks. If the money in your HYSA is your emergency fund or for a purchase you plan to make in the near future (one to three years), then keep it in the HYSA.

High-yield savings accounts held at FDIC-insured banks are not impacted by stock market fluctuations. FDIC insurance will also reimburse depositors for up to $250,000 per bank, per account ownership category, even if the bank fails. Basically, as long as you have $250,000 or less in your HYSA, it’s perfectly safe.

If the cash in your high-yield savings account is for far in the future, like retirement or sending the kids to a good college, then consider moving it to a brokerage account where you can invest in funds that track the S&P 500, which has seen average historical returns of about 10% annually.

Calculate how much less you’ll earn

The Fed’s decision to drop the federal funds rate by half a percentage point is a huge shift. The Fed tends to move the benchmark in smaller increments so it can judge how it impacts the economy before making larger moves.

But half a percentage point isn’t really that much in the context of your savings account’s APY. Say you keep your $20,000 emergency fund in a HYSA and you earned 4.50% APY last month, which is $73.50 per month. If your bank drops your interest rate in line with the Fed (half a percent), you’ll now earn 4.00% APY. That means you’ll only make $65.47 this month, a decrease of $8.03 per month — which is not that huge of a change.

A lower interest rate will reduce your earnings over time, but it’s worth considering how big of an impact this change will really have on your savings.

Remember, slow and steady wins the race

The drop in HYSA interest rates is a bit of a bummer. The reality is, we weren’t going to earn those sweet rates forever. As interest rates drop, it may be time to consider other options for your money, like stocks or mutual funds that earn a higher interest rate.

But if the money in your HYSA is an emergency fund or for a purchase in the next few years, leave it where it is. Yes, you’re earning a bit less, but your money is secure and you’re not risking loss to market fluctuations — the peace of mind alone is worth it.

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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 feels as if the cost of everything is now higher and will never cool off. Read on for a rundown of grocery costs — plus tips to spend less for food. [[{“value”:”

The September Consumer Price Index is out, and although there’s some good news for some categories, groceries isn’t one of them. In fact, the cost of groceries rose another 0.4% in September from the month prior, making it even harder for many Americans to stick to a monthly budget.

Prices for groceries are also up 1.3% for the year, short of the inflation rate, but still plenty after all the post-pandemic years of rising grocery prices. One of the biggest contributors was eggs, but the whole category (which includes meat, poultry, fish, and eggs) was up 0.8%, and fruits and vegetables were up 0.9% for the month.

Year over year, the meat, poultry, fish, and eggs category was up 3.9%, far eclipsing the next closest line item, alcoholic beverages, which was up 1.3%.

How much are people spending on groceries?

It’s interesting to see that grocery prices are up, but what exactly does that mean? According to the Consumer Expenditure Survey, an average household containing 2.5 people, 0.6 of which are children and 1.3 of which are earners (on average), spent nearly $10,000 on groceries in 2023.

That’s $4,000 per person, per year, or $833 per household, per month, on average. But that’s the average. If your household has special dietary needs, like food allergies, this price can be considerably higher, even with tight care and control.

You can earn money back on this spending with a rewards credit card. Click here to check out some of our favorite picks that earn higher rates on groceries and gas.

Other ways to save on your grocery bill

Buying groceries is an ever-present frustration for American households. Here are my favorite tricks to take some of the sting out of your grocery bill.

1. Buy food in bulk

Sure, maybe buying carrots in bulk is nobody’s idea of a good time, but there are plenty of foods you can buy in bulk that will last a while in storage. For example, I often buy large bags of brown rice and relatively long-lasting products like tofu when I go to my neighborhood Costco.

Costco is well-known for its quantity approach to groceries, but this can lead to massive savings if you plan your trip well. You might also consider investing in long-term food storage options like airtight containers for dry goods, or vacuum sealers so you can break up bulk packages into smaller portions.

2. Take advantage of cash back programs

Cash back apps like Ibotta can help make your grocery tab cheaper. Ibotta isn’t a coupon system, but it instead pays out money based on its internal incentives program for each item you buy that’s included in the program.

So, for example, if your cereal is listed on Ibotta, you can get a dime or a quarter back for something you were going to buy anyway. You can then cash out the money you collected into your checking account or turn it into gift cards.

3. Watch for gift card deals

Gaming the system is always a fun way to save money. Keep your eyes peeled for discount gift cards for your favorite market, at places like Costco and Sam’s (or even that same market). You can save a bundle by buying gift cards in amounts that will cover your weekly shopping, and then using them religiously. Often, you’ll realize discounts of 10% or more, depending on the players involved and the offers that are available.

4. Monitor local sales fliers

Even if sales fliers don’t always come in the newspaper anymore, you can still often get them online, which is actually great because it makes comparison shopping a lot easier. If you look through the sales to see where the best deals are on items you’d buy anyway, you can organize your shopping trip to be as cash-efficient as possible.

Let’s say you generally shop at two different stores each week, and you see one is having a sale on your favorite ice cream. Just by choosing that market to buy the ice cream that’s already on your list, you’re saving money in a fairly easy way.

5. Use digital coupons

Digital coupons can save you even more on items you were already going to buy. They can also be used with cash back apps like Ibotta for a solid two-fer effect when the stars align properly.

It’s easy, just download the app for your grocery store to your phone and sign up for its coupon program. Then you can select the coupons you’ll use at checkout and tie them to your account. Generally, when you check out, the coupons are automatically applied, but you’ll want to be sure you know how the program works before you assume.

Inflation in the post-COVID era is real, but you can still save

That $833 per month can be a significant chunk of change, especially when your rent is $1,500 and your car payment is another $500 or so a month.

Although inflation is cooling significantly, we have several years of very high grocery inflation left to overcome. This means we all have to be smarter about how we buy our groceries so our grocery bills don’t eat us alive.

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Click here to read our full review for free and apply in just 2 minutes.

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.Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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