We saw mortgage rates rise for the third consecutive week landing at 6.5%. The Fed has continuously raised interest rates for months to curb record-high inflation. As interest rates rise, it becomes more expensive for individuals to borrow money resulting in higher monthly payments. This adds to a layer of complexity as the housing market has been a roller coaster for the past two years. We are finally seeing the crazy high home prices come down, but it is still expensive in many areas, especially for first-time home buyers. As individuals look to enter the housing market this spring, multiple variables will come into play. Buyers need to assess the amount of their down payment as interest rates remain high. The typical goal is to put down at least 20% whenever possible. If possible, I would look to put more down to compensate for the higher interest rate, which can help lower your monthly payment. Use mortgage calculators online to understand what you can expect to pay so there are no surprises.
The Federal Reserve met again this week to discuss what actions are needed to stabilize the economy. It appears that the use of rising interest rates is going to be the primary tool going forward. As economic data fluctuates on curbing inflation, we can very likely expect an additional hike this spring. Based on the Fed’s minutes this week, I would anticipate a 0.25%-0.50% hike, again increasing the cost of borrowing money.
In the past few months, we’ve seen an uptick in cyber-attacks and data breaches targeting various companies. T-Mobile suffered a massive breach affecting over 30 million in January,
Video game maker Activision in December, and most recently, the produce giant Dole. While these attacks are not new, they should remind you to be ever-vigilant. Remember to update your passwords and login information continuously. The digital age is here, and as we move to move many services online, the risk of identity theft and fraud has increased exponentially. Never give out your password or social security number to anyone you’re unsure of it. Be cautious of scammers attempting to get your information through email or phone. You can limit your risk by taking protective measures such as using secure passwords and two-factor authentication methods.
Over the past year, there’s been significant news surrounding cryptocurrencies and their role within our economy. A lot of recent negative attention has resulted from the collapse of FTX led by Sam Bankman-Fried. While Bitcoin has been a dominant figure in cryptocurrencies, there have been increased discussions on crypto’s role in our daily lives. This week the International Monetary Fund (IMF) recommended that countries not recognize cryptocurrencies as legal tender. The IMF is an international organization that promotes global financial stability, facilitates international trade, and reduces poverty by providing loans, policy advice, and technical assistance to its member countries. While crypto is still in its infancy, it’s clear that some regulations will need to be in place going forward. The specific role crypto will have in our daily lives is still to be determined, but I would argue it’s here to stay.