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Will this be the year real estate bounces back?
The Fedâs inflation fighting interest rate policy has led to higher mortgage rates, and in turn weighed on activity in the housing market. Hopes are high that this will reverse this year. But is that realistic?
The Dow and S&P 500 both hit fresh all-time highs on Thursday
• The rally was driven by strong earnings from chipmaker NVIDIA, which showed a staggering 769% increase in profits, as well as other earnings.
• A cell service outage affecting users across the nation lead AT&T shares to fall 2.4%.
• In economic data, existing home sales rose 3.1% in January, while the median home price rose 5.1% year-over-year to more than $379,000.
What to be on the lookout for today
• Warner Bros. Discovery will report.
Do you really need a 20% down payment?
One of the biggest hurdles to buying a home is saving up enough for a down payment.
In the simplest terms, the more money you put down, the less you have to borrow. Youâll often hear you need to put down 20% of the total price to get a loan. But itâs not mandatory, and for many prospective buyers itâs not realistic either.
In fact, the typical down payment for first-time buyers was 8% last year, according to the National Association of RealtorsÂŽ.
Deciding your down payment
The median price for an existing home was 391,700 in the final months of 2023. So a 20% down payment would be $78,340.
Thatâs a lot of money.
That said, a bigger down payment may also qualify you for a lower interest rate. Putting 20% down also means you may be able to avoid buying private mortgage insurance (PMI).
Diverting funds away from other savings goals, such as retirement or building an emergency fund, can be costly. After all, home loans exist. Retirement loans⌠not so much.
Todayâs top stories
Americans are working less. No, really The average U.S. workweek has fallen by an hour over the past four years. Hereâs how. Read more >> Black women are still facing hurdles in the housing market While more Black women are becoming homeowners, theyâre also facing a unique set of challenges on the way. Read more >> In the market for a home? Find out more about your local market Check out local real estate market trends to discover neighborhoods, average home prices, market demographics, and more. Read more >>Other news that caught our eye
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Boeing removed the vice president of its 737 MAX program, Ed Clark, after repeated safety concerns, and the recent Alaska Airlines incident.
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The IRS is planning dozens of audits of corporate jets as part of its broader effort to ensure large corporations, partnerships, and high-income individuals pay taxes owed.
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Toyota is recalling 280,000 pickups and SUVs over the risk their engines might not disengage when in neutral.
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Japanâs Nikkei stock index surged to an all-time high, breaking a 34-year-old record set in 1989.
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Google suspended AI chatbot Geminiâs image generation feature after users flagged inaccuracies in depictions of historical scenes and figures.
Financial planner tip of the day
âGetting mortgage pre-approval can help you in the homebuying process, especially in a hot housing market. This can both show youâre a serious buyer and provide you a better sense of your budget as you begin house hunting.â
Brian Walsh, CFPÂŽ at SoFi