SoFi Blog

The Costs

There are a wide variety of factors when it comes to the cost of solar panels. Both the equipment itself and the installation are things to consider. On average, solar panels will cost a homeowner around $16,000. They can run as high as $35,000 and as low as $3,500.

Your state may have incentive programs, especially in areas with more sunny days per year. It’s also important to do your research regarding the solar company you plan to use, as their prices vary. Of course, the size and shape of your home also determines the size and weight of the panels you can choose, as well as how many you will need. All of this helps determine the cost.

Location and Timing

There are different types of panels available to consumers. The most efficient are monocrystalline solar panels, but they’re also the most expensive. Other options include polycrystalline panels and thin-film PV cells, which are less efficient and cheaper by comparison.

Given the need to effectively reflect sunlight and capture electrical or thermal energy, your roof’s pitch is a factor in the cost. Solar companies will charge higher prices for installation when a roof is complex or especially steep and difficult to work with.

In terms of the calendar, the coming winter months may offer some upside. Contrary to what most people think, the winter is a great time to install. Because solar companies are typically less busy during colder weather, their installation price could be lower than during the summer.

Potential Savings

The key to evaluating whether or not solar panels make sense is in the potential for long term savings. After looking into the upfront costs regarding equipment and installation, determine if there are any recurring fees with your solar company or power provider.

From there, the most vital piece of information is your local electricity rates. The most savings will be achieved in areas where utility costs are on the higher end or middle-of-the-pack. That’s because solar panels don’t always eliminate your electricity bill entirely — they often just reduce the total amount owed by cutting down on consumption. If the installation process is properly managed, solar panels can translate to significant savings over time.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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How Would You Like that Cooked?

The Fed’s move to increase the Fed Funds Rate (FFR) by another 75 basis points to an upper bound of 3.25% was widely anticipated and what the chef (or market) suggested. Their quarterly summary of economic projections is what moved markets, due to the sharp increase in what the FOMC expects its policy rate to be at the end of this year and next year.

Their estimate of the FFR went from 3.4% to 4.4% for the end of 2022, and from 3.9% to 4.6% for the end of 2023. The last time it was above 4% was December 2007. Below is a summary of how the other projections changed.

Given that markets had only priced in a rate of roughly 4.2% by year-end, the immediate movement in equities and bonds after this decision was negative in response to a more hawkish stance. The inversion between 2-Yr and 10-Yr Treasurys deepened by 10 basis points to 52bps. As Chairman Powell spoke, markets flattened out upon hearing his continued commitment to containing inflation and creating an environment that allows for a sustainably healthy labor market, only to whipsaw back down by the end of the trading day and finish notably in the red.

If the Fed had previously ordered their economy cooked “medium,” this meeting’s projections moved their order to “medium well.” The primary fear of many investors remains that monetary policy will overshoot and push us into a painful recession at some point in the next 12 months.

No Knife on the Table

The statements that continued to be reiterated by Chairman Powell were, “strongly committed to bringing inflation back to our 2% goal” and “we think we’ll need to bring our funds rate to a restrictive level, and to keep it there for some time.” With headline CPI still sitting at 8.3% and headline PCE at 6.3%, it’s clear that the 2% target is quite a ways in the distance. As such, at this point, rate cuts seem to me a fantastical idea that is just as far off.

Until inflation falls notably, equity markets could continue to suffer from volatile moves on each macro data point as investors attempt to discern the likelihood — and possible severity of — a looming recession.

Chew Slowly

I’ve taken some flack lately for my commentary being too risk averse. But in an environment where further hikes are on the menu, inflation is still the centerpiece, and no one knows if the labor market will make it through dinner, a lower-than-usual risk tolerance in the short-term is an important consideration.

But that does not mean keep it all in cash. It means choose carefully and keep in mind the hiking cycle isn’t over yet. Until we have a clearer idea of where the FFR will top out, I still view the classic growth sectors of Tech and Consumer Discretionary as too expensive at 20.0x and 24.5x forward P/E, respectively. The growth that can be found in Communication Services (14.3x) and Health Care (15.5x) is more attractive at this juncture, in my opinion.

I also continue to find the Treasury market attractive at these levels, particularly shorter-term Treasurys with the 2-Yr yield hovering around 4% and roughly 50bps above the 10-Yr yield. If this Fed meeting didn’t cause a sustained rise in either yield (thus a sustained fall in prices), I have a hard time envisioning something that will, unless we lose control of inflation expectations.

The fight against inflation is still on, and the outlook on the economy is still muddy. I don’t believe equities will find a smoother path upward until inflation comes down, whether because of tighter policy or because of a recession that restarts the business cycle. In either event, the road for markets remains an obstacle course.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Her ADV 2B is available at www.sofi.com/legal/adv.
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The news that U.S. inflation has hit 7% not only makes people recoil at the sticker shock at the gas pump and in the grocery-store aisles but also leads to some questions about what’s the best housing option right now, buying or renting.

Although to some, it’s more what is the least painful option than what is “best.”

Buying a house has deterred some budget-minded people since the pandemic sent real estate into a frenzy. While the market isn’t as red-hot as it was a year ago, it still seems like a seller’s market. However, taking a wait-and-see approach on buying may no longer be the safer choice, with worrying inflation-fueled increases in rent.

How Does Inflation Affect Rent?

Inflation itself is not considered a bad thing by analysts. The Federal Reserve believes that its 2% target inflation rate encourages price stability and maximum employment. However, 2% is not where the U.S. is at.

Regarding the rise in “shelter” costs shown in the latest Consumer Price Index, it may be bad news but it’s not surprising news. Anyone who has a landlord is aware of the trend. A study showed rents for a one-bedroom jumping an average of 11.6% in 2021 and the average two-bedroom going up by 13.6% over the same period, according to Fortune.

The rent increase is … complicated. Increases are believed to be driven in part by a scarcity of supply. During the pandemic, when houses were being snapped up, properties for rent were converted into properties that could be sold (or turned into Airbnbs), particularly outside cities and in places attractive to the “laptop class.”

Another factor: Landlords who held back from increasing the rent through 2020 and much of 2021 are now trying to recover their losses. That could be why new leases are showing such sharp increases.

Of course, some people are more than satisfied with renting regardless. To make the best of things, they’re launching rental-friendly updates or renovations, many of them budget-friendly too. While rising food and fuel costs definitely put the pressure on, these folks are working to keep their rent expense at the desirable percentage, which is no more than one-third of take-home pay.

The Advantages to Buying a House

In 2020, stories circulated of frenzied bidding wars for houses. Hours after a property went on the market, buyers were offering figures way over the asking price. To some degree, these days are over. For one, a great deal of desirable stock is gobbled up. Supply-chain issues and labor shortages have slowed down new construction.

Where does this leave first-time home buyers? Danielle Hale, Realtor.com’s chief economist, told The New York Times last August that there are more entry-level homes for sale. “I still wouldn’t say those homes are plentiful, but there’s more of them for sale now than there was a year ago,” said Hale.

The inflation spike – one that’s seeing prices rising at their fastest pace in 40 years – is leading some people to say buying real estate is the smart move. A flurry of headlines over the last few months remind us of the adage “real estate is a hedge against inflation.” This means for someone considering selling their house, the temperature could be warmer than ever.

As for buyers, interest rates have stayed near zero throughout the pandemic. This definitely encourages more applications for mortgages and refinancing.

The question is, what will happen if the Fed raises interest rates? Fed Chairman Jerome Powell recently indicated the central bank could raise interest rates this year as the U.S. economy didn’t need emergency support any longer.

If that happens, it’s possible that mortgages could have more issues, say some observers. But others say higher interest rates could lead to demand for new housing, and a very welcome boom would begin.

The Takeaway

A 40-year high in inflation spells bad news for renters, since a rise in “shelter” costs is prominently mentioned in the new Consumer Price Index. The time may be right for buying a house, with interest rates remaining low and the red-hot real estate market cooling a bit.

Explore competitive mortgage rates and learn about the new flexible terms and down payments as low as 3% for first-time homebuyers.

Photo credit: iStock/Shutter2U

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Sharpest Decline in Nine Years

PC manufacturers are experiencing a drop-off in demand for their products. Research firm Gartner (IT) reported Q2 shipments were down nearly 13% compared to the previous year — the sharpest decline in nine years.

Some market observers contend the market is cooling due to geopolitical uncertainty caused by the Russia-Ukraine war as well as inflationary pressures, leaving consumers more purchase-hesitant. The pattern represents a reversal from buying trends of the last few years.

Reversal of Pandemic Buying Spree

Spending on PCs and other devices surged during the pandemic as more people worked from home and classrooms went virtual. Purchases for at-home electronics declined as pandemic restrictions lifted and people returned to work and school. The drop off in demand was particularly steep in the market for lower-cost computers, such as Chromebooks.

Business spending has continued amid office reopenings, which is helping to offset the waning interest from consumers. Some companies, such as HP (HPQ), expect bottom lines to benefit from improving supply-chain dynamics.

Company Cutbacks

Amid the uncertainty, companies such as Intel (INTC) are taking precautionary measures to support financial resilience. This includes a temporary hiring freeze in its PC-chip division. Likewise, Micron Technology (MU) announced plans to slash spending amid soft demand for its memory chips.

Even as these companies adjust to the new market dynamics, executives and investors alike may find solace in the fact that demand for computers is still above pre-pandemic levels.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
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