As we step into the month of love, let's show some affection to our finances! It's a good time to take a look at where your money is and whether it's working for you.
One of the biggest news items this month has been the sudden activity within the residential property market. After months of climbing interest rates, made worse by the shortage of move-in ready homes for sale, buyers are actually encountering bidding wars for desirable, move-in ready homes. Rates have been declining, so it's definitely time to arm yourself with the best possible tools to get your offer accepted, including a solid pre-approval.
For readers already making vacation plans, the US dollar has retained its strength, making travel to Europe and Scandinavia affordable options for more Americans.
Cold Weather Can't Stop a Warming Market
Would-be homebuyers are coming out of hibernation as the real estate market heats up, and some are facing competition. Bidding wars are already erupting in some areas of the US, which could drive up prices among the more attractive listings.
According to the Mortgage Bankers Association (MBA), mortgage application volume increased by almost 10% in a single week, as buyers are encouraged by the year-end interest rate decline. This doesn't mean the real estate market hasn't decided to become predictable. One real estate agent described the St Louis market: "Prices here are all over the board. If your house is updated with the most recent home trends, you're going to get offers."
Warmer locations enjoyed even more activity, including the Phoenix real estate market. Agents are encouraging buyers to act sooner than later, as they're expecting springtime to be especially competitive, with an increase in bidding wars. Other cities where buyers are competing for attractive properties include Charleston, South Carolina; Atlanta, Georgia; and Huntsville, Alabama.
Thinking about diving into the house-hunting adventure? Your path to the perfect home starts with a conversation – connect with an APM Loan Advisor today.
It's Time for a Hurricane Coverage Checkup
Last year, we saw more hurricanes than usual as ocean temperatures broke heat records. As these storms can be devasting, both financially and emotionally, advance preparation can help you and your family recover. For real peace of mind, you'll want to make sure you have adequate coverage before a storm hits, so it's well worth reviewing before the season begins. Here are some of the most important coverage details.
Your hurricane-related deductible may be higher than you realize.
While damages from wind and wind-driven rain are covered by standard homeowners policies, you may have a separate wind deductible which is usually based on a percentage of your coverage. Depending on your home's insured value, this can mean you could be facing a bigger repair bill than expected if a storm hits.
Your coverage may include temporary housing.
Most homeowners policies pay for rent, food and other costs for up to a year if a hurricane makes your home uninhabitable. Find out how much coverage you'll receive, and how your insurer will finance your temporary housing while your home is repaired or rebuilt.
Flooding isn't covered by homeowners insurance.
Damage caused by wind, wind-driven rain and water that comes into your home through the roof, windows or holes in the walls is usually covered by homeowners insurance. But damage from flooding and water that rises during a storm surge is not covered and requires separate flood insurance.
Flooding is covered by auto insurance.
If your auto insurance includes comprehensive coverage, which insures against the type of physical damage not caused by an accident, then flooding would be covered. Water damage can result in your vehicle being declared a total loss.
In the News
The Connection Between Financial and Mental Health
We all know that taking care of our mental health has a positive effect at home and at work. However, today's fast-paced, goal-oriented career lifestyles can contribute to insomnia and fatigue, which can affect how we manage our finances. For example, stress can cloud our judgment and lead to impulse purchases, or neglecting our bank and credit accounts.
Here are some simple tips for reducing the financial stress in your life:
A budget tracker and planning app can help you monitor your spending habits. You'll see exactly where your money is going and make adjustments to ensure you avoid overspending.
Set up automatic payments and transfers for bills and savings if you haven't already done this. You won't have to worry about late fees and possible damage to your credit score.
Check investment accounts weekly, not daily. It's tempting to want to check your investment and/or retirement accounts daily, especially if stocks are having a wild day. But obsessing over fluctuations can be stressful.
Whether you're coping with financial stress or simply looking to improve your overall health this year, take the time to invest in both. It's a win-win for your career and financial outlook.
Credit and Consumer Finance
Inflated Overdraft Fees Challenged
Earlier this week, changes to bigger banks' overdraft protection plans were announced by the Consumer Financial Protection Bureau (CFPB). These include lowering penalty fees and is part of the Biden Administration's campaign against exorbitant consumer fee structures. Since 2020, overdraft fees for American consumers have added up to around $280 billion.
The proposed CFPB rule would offer big banks two options for managing overdraft coverage:
1. Banks could offer overdraft loans, managing the funds they advance as credit line loans. Consumers would apply for credit and institutions would determine their ability to repay. In addition, consumers would be able to repay the credit manually. These protections could result in fewer consumers being surprised by overdrafts and the resulting fees.
2. Large banks could continue offering overdraft coverage as a courtesy, rather than a revenue-generating line of credit. These funds would continue to be exempt from Truth in Lending (TILA) regulations. However, banks would be limited to charging fees in line with their actual costs.The CFPB proposed benchmark rates for overdrafts to be reduced to $3 to $14 per transaction. It's a big reduction to overdraft fees that currently run as high as $37.
"For too long, some banks have charged exorbitant overdraft fees—sometimes $30 or more—that often hit the most vulnerable Americans the hardest," President Joe Biden said in a statement Wednesday on the new rules. "Banks call it a service—I call it exploitation."
Did You Know?
From Staycation to Stargazing: Vacation Trends Go Off the Grid
Encouraged by a strong US dollar and memories of COVID quarantines, our vacation plans keep taking us further. Last year, we booked overseas locations, luxury cruises and Arctic adventures. If you've already decided on your next destination, remember that you may be able to save big by advance booking. If you're still looking for a new or original holiday venue, here are some to consider.
1. Astro tourism. Mankind first began to study the stars and planets around 1000 B.C. Today, astro tourists head to remote places where they can view astronomical phenomena without pollution or crowds. Some favorite destinations include the African countries Botswana and Namibia, where visitors can spend hours gazing at the planets and constellations overhead. In addition, this year's displays of the Northern Lights are encouraging advance bookings to Northern countries.
2. Coolcationing. While the typical holiday is often spent at the beach, not everyone enjoys higher temperatures, especially after a record-breaking 2023. Travel agents specializing in luxury trips recently reported that over 80% of clients are considering destinations like Iceland, Finland, and Scotland. Going north can be fun for families, as kayaking and cycling are often available without the risk of sunburn.
3. Gig tripping. While 70s-era music lovers followed the Grateful Dead cross-country, current generations are booking destination concert travel, or gig-tripping. These may take them overseas, as more music fans realize they can pay less and have a better adventure seeing their pop favorites perform in Scandinavian or European countries. Summer festivals like Romania's Untold provide gig-trippers with opportunities to enjoy music while sharing quality time.
4. Silent travel. While silent walking is a current TikTok trend, silent travel provides an equally relaxing experience with better scenery. Meditation retreats are popular, as are secluded nature resorts, sleep retreats, quiet hotels and even silent concert experiences. Nonprofit Quiet Parks International provides a list of destinations, while travelers to Finland can book a Silence and Nature Tour.