Welcome back to another installment of FitBUX's Weekly Financial Update โ your personalized bulletin for all things finance.
Our mission? To empower our community of young professionals, aged between 20 and 40, with the most compelling financial news and insights.
From the latest on student loans, real estate trends, to stock market movements, and financial planning, we have you covered.
Our expertise? Guiding our community to navigate over $2.6 billion in assets and debts.
As your authoritative finance partner, we are committed to offering clarity, instilling confidence, and reducing financial stress.
So, let's jump into this week's noteworthy updates and help you optimize your financial health.
Housing Market
Let's chat about what's shaking in the housing market, shall we? When it comes to your mortgage rates, it's all about keeping tabs on inflation and the moves of the Federal Reserve.
So, fun fact: the Fed uses the PCE price index to track inflation, and this week, we got hit with both the monthly and quarterly updates. And guess what? Inflation decided to put on a show, spiking up like it's nobody's business.
Here's the kicker: when inflation gets rowdy, bonds and rates tend to get jittery, especially if it throws the Fed's plans out of whack.
So, those waiting for rate cuts? It may be on hold for now. As a result, mortgage rates jumped this week, with the average lender bumping up by about an eighth of a point.
That puts the top-tier conventional 30-year rate over 7.5%, the first time since November. As for tomorrow? Well, who knows, but fingers crossed, it's better than we expect. Keep calm and carry on, folks!
Financial Planning
Behavioral finance within the decision-making process is one of the most important factors in a successful financial plan.
Often, we follow learned money habits throughout life that stem from generational habits established before we are born.
Joseph Reinke, CFA, explored this idea further in our latest video. In it, he discusses how two FitBUX members use psychology to rethink debt and reduce their financial-related stress.
In one instance, the FitBUX member has a low-interest-rate mortgage debt. Although his savings account earns more interest, he stresses about having a 300k balance on a mortgage.
In the other instance, the FitBUX member needs to save for the IDR tax bomb but stresses that their student loan balance stays unchanged.
See how these FitBUX members used Joe's guidance to reduce stress and create new postive generational habits!
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How long do you think it will take for real estate to drop by 30-50%?
It depends on how long mortgage rates stay up/increase. The home affordability isn’t going to get better unless wages go up, house prices go down, or mortgage rates decrease again. Wages aren’t going to go up fast so what is more likely to happen first: rates going down or prices going down?
Also, it really depends on the location as well….
They’ve stayed resilient nationwide the last year on average. However, in my area they are down 25% from the high…
Next week we’ll be doing a massive one hour update on housing.