Source: Bloomberg

Anyone who thinks they can’t beat the latest spike in mortgage rates needs to read this helpful story.

It shows how lenders are offering hopeful buyers incentives to ease the sting of borrowing costs that rose Thursday for a fourth straight week, hitting the highest since November. New offers include free refinancing and buydowns, which temporarily reduce the rate of a home loan. Even sellers are getting in on the game, with some offering to pay for temporary interest-rate discounts.
It all demonstrates the fast-changing nature of the housing market right now, and how important it is for both buyers and sellers not to get their heads stuck in the sand.

For the hopeful buyers out there: Prices have been moving in your favor, with a key index down 2.7% from its peak in June. Competition has also been easing, which means you likely have some leverage with sellers if you’re determined to buy. More buyers are simply plopping down cash to avoid mortgages altogether.

However, it’s still incredibly tough out there for first-time buyers, who made up the smallest share of sales on record last year. Check out this story on what it takes to secure your first home these days. The short answer? Privilege.

But even first-time buyers with no outside help have some new resources, with the Biden administration rolling out changes to make getting a mortgage cheaper for new entrants.

For sellers: The pandemic-era heyday is over. Sorry. But getting lost in the latest data might discourage an otherwise savvy financial decision. For instance, recent statistics show the total value of the US housing market shrank by $2.3 trillion in the second half of last year, the biggest drop since 2008. Declines like this are encouraging many sellers to sit on the sidelines until prices rebound. But zoom out, and you get a very different picture.

“The housing market has shed some of its value, but most homeowners will still reap big rewards from the pandemic housing boom,” said Redfin economics research lead Chen Zhao, adding that the total value of homes remains roughly $13 trillion higher than it was in February 2020.

I asked real estate company Zillow for the best tips for people who are either trying to buy or sell this season. Here’s what Amanda Pendleton, Zillow’s home trends expert, told me:

Hopeful buyers should focus on getting their finances in order, particularly for that mortgage. “Get pre-approved, not just pre-qualified, for a mortgage before entering a competitive market,” she said. “A pre-approval is a more extensive financial check, but it will give you — and the seller — more confidence in your ability to secure financing.”

Aspiring sellers in this market should think strategically about the return on investment of renovations and repairs. “Landscaping, interior painting and carpet cleaning are the most commonly completed seller projects for good reason,” Pendleton noted. “They boost online curb appeal and send a powerful signal to a buyer that a home is well-maintained.”

Whether you’re buying, selling, or staying put: Good luck out there. — Charlie Wells

Send us questions about your own financial dilemmas to or fill out this form.

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In Bloomberg Opinion this week, Alexis Leondis says bank CDs are an insult to America’s savers:

Savers who can afford to park their cash for up to a year would be better off just buying Treasury bills outright. Even money market funds, which are paying pretty generous yields, can’t compete with most T-bills right now, especially after accounting for fees.

Across the board, the rates for T-bills are higher than those for CDs of comparable maturities. Despite a handful of outliers, the current average rate for a one-year CD is a paltry 1.44%, according to Bankrate, vs. 5% for a one-year T-bill. Big banks are still flush with deposits, so don’t feel the need to turbocharge their CD rates.

Read her full article here.

Financial FAQ

What advice would you give someone feeling very behind on their taxes right now?

According to the American Psychological Association’s 2022 Stress in America survey, approximately two thirds of all Americans stress about money, so it comes as no surprise that taxes with their myriad of forms and rules can leave people feeling behind.

Here are some ideas as tax day gets closer:

  1. Get Organized: Block off time to focus on gathering all tax documents such as W-2s and 1099s. Gathering tax documents is the first step to a successful tax season.
  2. Consider a Tax Professional: They can help by identifying necessary documents and alleviate confusion. Additionally, they can identify opportunities for tax savings that a “DIY” service may miss.
  3. File an Extension: The IRS allows you an additional six months to finalize your tax return as long as you file a valid extension by April 15 (April 18 this year). You can extend filing your return, but not the deadline to pay. Consider paying a bit more than you expect to owe by April 15, and when you do file, any overpayment will come back to you as a refund and you won’t have to worry about penalties.

— Elliot Pepper, financial planner and director of tax, Northbrook Financial