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It’s an historically bad time to build wealth, because it’s an historically bad time to buy a home
Owning a home is a key ingredient to building wealth — for yourself and the generations to come. So when the housing market is making it hard to get a foot in the literal door, it’s bad news for Americans.
US stocks finished slightly higher on Tuesday as investors grew more confident that the end of Fed rate hikes is near
• Fed Governor Christopher Waller said monetary policy was tight enough, even though inflation was still too high. This helped to briefly send the 10-year Treasury yield below 4.4%, its lowest level since mid-September.
• The 11-day period leading up to Cyber Monday was Amazon’s biggest holiday sales event ever, with shoppers around the world buying more than 1 billion items. Overall, U.S. online sales for Cyber Monday hit a record $12.4 billion.
• Shares of the cloud communications platform Twilio rose 3.6% after activist investor and shareholder Anson Funds urged the board to sell the business.
• U.S. home prices rose to a new record high in September, according to the Case-Shiller Home Price Index, which climbed 3.9% year-over-year.
What to be on the lookout for today
• The second look at Q3 U.S. GDP will be released. The advance estimate showed a pleasant surprise of 4.9% seasonally adjusted annualized growth, buoyed by strong consumer spending. We’ll also get the weekly update to the 30-year mortgage rate.
• In company earnings, Foot Locker, Dollar Tree, Salesforce, and Victoria’s Secret will report.
Don’t let your student loans stop you from buying a home
Student loan repayments are back after being put on pause during the pandemic, and that might change the way your budget looks.
But you can still buy a house if you have student loan debt.
Lenders consider your debt-to-income (DTI) level when determining your creditworthiness. Ideally, you want it to be 35% or lower.
Here’s how to calculate your DTI: Add up all your monthly debts (including car loans, and credit cards) and divide it by your monthly gross income, and multiply that figure by 100. If this number is higher than 35, you might want to tackle some of your debts before looking to purchase a home.
If your DTI passes muster but student loan payments make it harder for you to save up to buy a home, there are loan options that require smaller down payments. There are also down payment assistance programs and grants for eligible homebuyers.
The good news is that paying your student loans consistently, and on time will help your credit score, a number that mortgage lenders look at before giving you a loan.
Today’s top stories
Could supply chain progress cure U.S. inflation? Supply chain chaos was all over the headlines during the pandemic. Those days are over now, but a new focus on logistics could hold the key to bringing inflation under control. Read more >> Corporate America's diversity efforts are losing ground First-time promotion rates for Black Americans have fallen to pre-pandemic rates, and that’s a problem for companies trying to retain talent. Read more >> Should you rent or buy? Take this quiz and find out Buying a home is one of the biggest financial decisions you can make. You want to be sure that it’s right for you. Our quiz can help you get some clarity. Read more >>Other news that caught our eye
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Investing legend Charlie Munger, friend and business partner of Warren Buffet, and Vice Chairman of Berkshire Hathaway, has died aged 99.
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3M subsidiary DuPont received a big win in defeating a mass class action suit over toxic "forever chemicals.”
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Gas prices have fallen for 61 consecutive days, lowering the national average to $3.25 per gallon.
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Google will start deleting inactive accounts in December. Any accounts that haven’t been used in more than two years could be erased, along with content on Google Drive, Docs, and Gmail.
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Disney’s Wish fell short of expectations at the box office with just $31.6 million over the five-day Thanksgiving holiday period.
Financial planner tip of the day
“Working to improve a credit score before applying for a home loan could save a borrower a lot of money in interest over time. Lower rates will keep monthly payments lower or even provide the ability to pay back the loan faster.”
Brian Walsh, CFP® at SoFi