Top Story
Fewer than 1 in 5 Gen Zers own homes. Could this proposal change that?
The Biden administration wants to help first-time homebuyers with tax credits. Will it ease young Americans’ entry into the market?
US stocks finished mixed on Tuesday
• Technology stocks rebounded from the previous day’s decline, led by a 6.8% rebound in NVIDIA shares. Other big tech names including Alphabet, Meta, and Tesla also saw their stocks rally.
• Consumer confidence dipped slightly in June and future expectations worsened. In housing, the Case-Shiller home price index hit another record high with a 1.2% increase in April and 6.3% year-over-year.
• Fed Governor Michelle Bowman said the time was still not right to start lowering interest rates, and that she would be open to raising rates again if inflation doesn’t come down.
What to be on the lookout for today
• New home sales for May and the weekly update to the 30-year mortgage rate.
• In earnings, General Mills, Levi Strauss, and Micron will report.
How much should you be paying in rent?
Housing costs have been rising across the board. So how much is too much when it comes to rent?
A rule of thumb says housing shouldn’t take up more than 30% of your pre-tax income. But for some, that’s not possible.
Maybe you live in a city with a very high cost of living, or you have a lot of other costs that mean you can’t spend as much on rent.
Making renting work for you
Find your number. Drawing up a budget can help you here. A popular budgeting technique is the 50/30/20 rule that designates 50% of your take-home pay to mandatory spending, things like: rent, utilities, food, health care, and debt payments. After that, 30% goes to discretionary spending, and 20% is designated for saving. Using this rule, you can work backwards to get to an amount to spend on rent that fits into your budget.
Don’t forget the fees. When it comes to housing costs, there may be additional expenses beyond your monthly rent check, such as building fees, utilities, and parking.
Looking to trim? Adding roommates could make rent more affordable, along with living farther outside the city (but this could increase commuting costs). Scrutinize your bills, are you using all your subscription services? What about those cable channels?
Today’s top stories
The deal with high delivery feesIt’s not you, food delivery has gotten a lot more expensive. As companies are changing their business models and state legislation is upping required wages, ordering food from your couch is getting pricier.
Read more >> Job hopping is getting popular. But it comes with real risksSwitching jobs frequently can help you move up the ranks and secure better pay. But before you do so, you should weigh the downsides that come with such frequent changes.
Read more >> High earners can live paycheck to paycheck too. Here’s whyAs many as one-third of Americans with an annual income of $150,000 or more are living paycheck to paycheck. “Lifestyle inflation,” when people spend more the more they earn, is only part of the explanation.
Read more >>Other news that caught our eye
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Two federal judges blocked sections of President Biden’s student loan repayment plan, including a rule set to go into effect in July that would have lowered monthly payments for some, and reduced the required payment period for borrowers with larger loans, citing a lack of approval from Congress.
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Treasury Secretary Janet Yellen announced a new $100 million affordable housing fund with measures to boost housing programs, provide greater interest rate predictability to housing finance agencies, and help state and local governments use recovery funds to build houses.
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Amazon’s 10th annual Prime Day sales will take place on July 16-17. Walmart and Target announced similar sales on July 8-11 and July 7-13, respectively.
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Bill Gates told Axios that nuclear power is the only way to decarbonize the world’s energy grid.
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Astronauts from Boeing's Starliner spacecraft were expected to return after eight days in space, but helium leaks have delayed their return by at least two weeks, with still no return date set.
Financial planner tip of the day
"When building a personal budget, it can be helpful for individuals to get a good grip on the money that’s coming in and going out. It’s a common mistake to set budget categories with aspirational numbers pulled out of thin air, only to have a budget fall apart later on when faced with reality."
Brian Walsh, CFP® at SoFi