SoFi Blog

For most Americans, the cost of buying a house has felt pretty prohibitive these past couple of years.

Property prices haven’t recovered from the pandemic buying frenzy, and mortgage rates — which had been the more affordable part of the equation not that long ago — have shot back up toward 7%.

Rents, on the other hand, are finally starting to ease. Thanks to a boom in new construction, the median asking rent on rental units (apartments and houses with up to 2 bedrooms) has dipped below $1,700 for the first time since April 2022 — falling to $1,695 last month, according to Realtor.com.

This dip means the average monthly mortgage payment is roughly 35% higher than the typical apartment rent. And that affordability gap is driving a growing number of Americans to choose renting over buying, the latest research from the commercial real estate firm CBRE Group shows.

For those struggling to afford either option, the decline in rents helps make a seemingly impossible housing choice more straightforward. But is it that simple? Here are a few other things to consider:

1.    Rents are still high. The median rent is still 16% higher than it was in 2019, and may easily eat up more than the recommended 30% of a renter’s income. By that rule of thumb, the typical apartment rent is “affordable” only for those who earn at least $63,680 a year, according to the real estate brokerage Redfin. And that’s almost $9,000 more than the national median income.

2.    What most rent-versus-buy calculations miss is that homeownership is an investment that can yield thousands of dollars in equity each year. The typical home sale generated $122,500 in profit for sellers in 2024, a roughly 54% return on their investment, according to real estate analytics firm ATTOM.

3.    If you can afford to buy, it’s important to consider how long you would stay in your home, because many experts say it takes at least five years to build significant equity in your home. And in the meantime, you’ll be on the hook for everything else that comes with homeownership — including home insurance, property taxes, and energy bills, all of which are more expensive than they were a few years ago. In 2024, non-mortgage expenses on a typical single-family home cost more than $18,000, adding over $1,500 to monthly costs, Bankrate estimated.

So what? Your choice of housing is about cost, but also about lifestyle choices and where you see yourself in five to ten years. Renting is expected to be the more affordable option for most Americans this year, and has the added benefit of being more flexible if you think your circumstances may change. But if you can handle all the costs of owning a property, a purchase gives you the chance to build wealth long-term.

Related Reading

•   Is It Better To Rent or Buy Going Into the New Year? Easy Formula Breaks It Down (ABC News)

•   The Top 20 Markets Where It’s Cheaper To Rent Than Own a Single-Family Starter Home (Realtor.com)

•   The Decline in Relative Housing Affordability and the Impact on Homebuyer Search Behavior (Freddie Mac)

photo credit: iStock/Alex Potemkin

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.

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.

OTM20250131SW

Know When to Hold ‘Em

The Federal Open Market Committee (FOMC) held interest rates steady at a range of 4.25-4.50% at their latest meeting, citing a stable employment picture and inflation that remains somewhat elevated. It was the first meeting without a change in rates since the Fed began lowering rates in September 2024.

It’s important to point out that investors had a lot on their minds already. Earlier in the week, developments regarding Chinese AI start-up DeepSeek caused volatility in U.S. tech stocks and left investors with questions surrounding the competitive landscape. Additionally, a few bellwether mega-cap companies (Meta, Microsoft, Tesla, Apple) are reporting earnings this week and will set the tone for tech earnings broadly.

All of these crosscurrents have already caused whiplash in markets, so the reaction to this FOMC statement was on the calmer side, even compared to other instances when the Fed didn’t move rates.

The market continues to expect roughly two rate cuts for all of 2025 and today’s meeting did not materially change that stance.

A Good Place

All of the anticipation that leads up to a Fed meeting can make us expect that things will change after the meeting, or that there will be some sort of material statement made that alters the course of markets.

That doesn’t need to be the case, and this month’s meeting was a clear example of that. Not much has changed in the economic data since the December meeting, and according to Chair Jerome Powell at this meeting, monetary policy is currently in a good place, as is the U.S. economy.

The labor market is in a much more balanced state than it was last year at this time and has not demonstrated the weakness many feared; in fact, it has strengthened in recent months by some metrics.

On the inflation front, there is still concern over upside risks to prices and the Fed has acknowledged that adjusting policy too quickly or too slowly can have negative effects on inflation and the economy. Given that the Fed has reduced the fed funds rate by 100 basis points since September, the current level still seems appropriate until and unless inflation comes down in a more meaningful way.

Below are the four main measures of inflation, showing the dramatic drop that has occurred since mid-2022, but also the plateau that has been hit over the last few months.

Sometimes doing nothing is the right answer.

Policy and Politics

Despite the many attempts by journalists to ask Powell about how the Fed will react to possible political pressure, or upcoming changes in political policies, the Chair made it clear that he would not respond to questions in that vein… leaving the room with an unquenched thirst for some sort of retort.

I believe that sentiment will continue. Markets and media are likely to keep speculating about how political pressure may influence monetary policy going forward (as they did during the last Trump administration). That in and of itself can drive market volatility between FOMC meetings and in reaction to any moves the Fed does make through the remainder of the year.

This meeting included a message of “steady as she goes, nothing to see here”. As the first meeting of 2025 and on the heels of a change in the White House, I welcome the relatively calm message and market reaction. Now we enter a long break until the next FOMC meeting on March 19 and are left to watch the data roll in. This kicks off a year when I believe fundamentals – rather than momentum and technicals – will run the show. Keep your eyes on the right ball.

Want more insights from Liz? The Important Part: Investing With Liz Thomas, a podcast from SoFi, takes listeners through today’s top-of-mind themes in investing and breaks them down into digestible and actionable pieces.

Photo Credit: iStock/William_Potter

SoFi can’t guarantee future financial performance, and past performance is no indication of future success. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.

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 Thomas is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Form ADV 2A is available at www.sofi.com/legal/adv.

{/* v1 CC – Unlimited LCM – Prescreen 12/27/23 */}
{/* sofi.com/credit-card-prequal/ */}

{/* Hero */}

{/* Unlimited 2% cash back rewards means 100% awesome */}

Unlimited 2% cash back rewards

means 100% awesome.

The millions of Americans with federal student loan debt have endured some serious whiplash over the last few years.

Between a three-year break from monthly payment requirements, former President Joe Biden’s mixed success expanding loan relief and forgiveness, and the re-election of President Donald Trump, there have been a lot of twists and turns since the 2020 pandemic.

But 2025 marks more than just another momentum shift: With Trump and a newly fortified Republican party in charge in Washington, the era of leniency for student loan borrowers is over.

Not only are Trump and his fellow Republicans in Congress likely to unwind many Biden-era expansions, but they could look to limit or end programs and aspects of the federal student loan system that pre-date Biden’s time in office, according to Politico and other news outlets.

This may include loan cancellation options for borrowers who go to a school accused of misconduct, a provision that lets those with subsidized loans avoid paying interest while they’re still in college, and the Public Service Loan Forgiveness program — which was enacted during the George W. Bush presidency and dismisses loan balances for public servants like teachers and doctors after they’ve paid for 10 years.

The Trump administration has yet to spell out its plans for the federal student loan system, so nothing is certain. But even Biden acknowledged the coming change in the wind, withdrawing notice of proposed rule changes for his “Plan B” attempt at widespread student loan forgiveness just before leaving office. (“Plan A” was struck down by the Supreme Court in 2023 after being challenged by Republican opponents.)

For his part, Biden made student loan forgiveness and other forms of borrower support central to his presidential agenda, arguing that the $1.7 trillion in collective federal student debt — averaging almost $38,000 per borrower, according to one analysis — is overwhelming many Americans. And his administration did wipe out almost $190 billion in debt for targeted groups of borrowers — a total of 5.3 million — during his time in office.

Republican opponents, on the other hand, have argued that forgiveness and other subsidies are unjust bailouts — unfair to those who already repaid their loans or avoided college because of its cost.

If you ask those directly impacted, student loan relief is actually one of the few issues that transcends political divisions. In February 2024, the vast majority of college students — both those identifying as Republicans and Democrats — felt the government should do more to help them pay off their student debt, according to an Axios survey conducted by The Harris Poll.

But so far there have been few overtures from Republican lawmakers, apart from a proposal by New York Congressman Mike Lawler to lower the interest rate on federal student loans to 1%. (It’s higher than 6% on loans for this academic year.)

So what? The protections and accommodations afforded to borrowers over the last five years have ended, and those who default on loans will reportedly face collection efforts again later this year. If you don’t have one, now is the time to work out a strategy for paying your debt.

Many federal loans have consolidation options that can lower your interest rate, and even if Biden’s SAVE repayment plan is eliminated, there are other income-based repayment plans. Or you can refinance your loans (and SoFi can help with that.) And if you’re really struggling, you can apply for forbearance or deferment — though that may not stop interest from accruing.

Related Reading

•   What Trump and GOP Lawmakers May Have in Store for Student-Loan Borrowers (Business Insider via MSN)

•   They Thought They Were Nearly Done With Student Loans, but Then Came Trump (The New York Times via MSN)

•   Biden’s Education Grades: F on FAFSA, an Incomplete on Student Loan Forgiveness (NPR)

photo credit: iStock/hxdbzxy

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.

In our efforts to bring you the latest updates on things that might impact your financial life, we may occasionally enter the political fray, covering candidates, bills, laws and more.

Please note: SoFi does not endorse or take official positions on any candidates and the bills they may be sponsoring or proposing. We may occasionally support legislation that we believe would be beneficial to our members, and will make sure to call it out when we do. Our reporting otherwise is for informational purposes only, and shouldn’t be construed as an endorsement.

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.

OTM20250129SW

If you’ve recently decided to get divorced, you’re in good company.

Divorce filings tend to rise at the start of the year, giving January the unfortunate label of “divorce month.” (As it turns out, research shows that filings don’t actually peak until March, probably because unhappy couples who hold off during the holidays need a couple of months to get their paperwork organized.)

The seasonality of divorce means there are a lot of people just like you out there — people who are exceptionally stressed and emotional, but still have to navigate all the daunting financial considerations.

If you’re not sure where to start, take a deep breath — you will get through this. And we’ve got a short roadmap that should help. It includes when to meet with a divorce professional (right away,) how to determine your financial priorities, which documents to gather, and when and how to separate your financial accounts.

Step 1: Meet with a Divorce Professional

It may seem too early, but getting an initial one-on-one consultation with a divorce pro — whether it’s a lawyer or a mediator — is a smart first step, especially because the divorce process is so state-specific. Unless you work in family law, you’re not likely to know the ins and outs of your state’s laws, and you’re probably going to face a dizzying vocabulary of acronyms you’ve never heard before.

A professional can explain how your state may influence the divorce process, including:

•   Whether income and other factors determine how the family home and other property will be divided or if a 50/50 split is required

•   Similarly, whether retirement, savings, and other accounts will be split 50/50 or not

•   Whether “fault” has any role in property division or support payments

•   Whether there is a pre-filing waiting period and/or a post-filing cooling-off period

•   How the child support and spousal support guidelines and formulas work

•   Whether mediation is required (you may be able to avoid the kind of divorce showdown you see in TV dramas)

Certified Divorce Financial Analysts are also worth talking to, and can explain how different types of settlements might impact your long-term finances and taxes.

After you meet with a professional, here’s what to consider next (though not without their input.)

Step 2: Consider Your Must-Haves

Determining your financial priorities can help you figure out what you want to fight for and what you’re willing to live without. “Saying ‘I want it all!’ is useful neither to you nor your lawyer,” according to the Institute for Divorce Financial Analysts. This simple worksheet can help you decide what’s most important to you in these areas:

•   Division of shared property, such as the family home

•   Spousal and child support

•   Division of retirement accounts, savings, and other funds accrued during the marriage

•   Splitting debts, including credit card balances or personal loans

Step 3: Start Gathering Financial Info

You might want to begin gathering financial details, especially if your spouse handled the household finances and/or you’re concerned they may not be totally forthcoming.

Here’s a start, though your legal professional can give you a more complete checklist:

•   Personal details: SSNs, employer contact details, and health insurance information for each family member.

•   Tax information: At least three years of income tax returns and property tax bills.

•   Debts and loan details: Balances and account numbers on mortgages, HELOCs, credit cards, and other loans (student, personal, boat, and other loans).

•   Income figures: Pay stubs, interest and dividend income, and details on bonuses and unreported income.

•   Information on assets: Assessed values of real estate and cars, balances on investment accounts, and the coverage and cost of life insurance policies.

•   Bank account data: Monthly or annual spending on children or other dependents, utilities, food, transportation, medical, and other expenses.

Step 4: Severing Financial Ties

The surgical process of separating your financial life from your spouse’s is often time-consuming and messy. Missteps can wreck credit and get you in trouble in court, so tread carefully if you make any moves before your divorce is finalized. (And be aware: Lenders often don’t care if you’re divorced, if the debt was incurred when you were together.)

One way to efficiently and safely separate funds early in the divorce process is to work with your spouse to pay off debts and close down accounts. (It’s best to keep them in the loop when unwinding things anyway.)

Again, while this list gives you a framework for what’s ahead, always check with your legal professional before taking any of these steps:

•   Cancel joint accounts (and automatic withdrawals) and open/shift funds to individual accounts

•   Change logins and passwords on previously shared online accounts or apps

•   Remove spouses as authorized users on each others’ credit cards

•   Let utility companies know who is assuming responsibility for the bills

•   Change family cell plans to individual plans

•   Notify all financial providers of any change of address

•   Re-evaluate retirement saving rates and allocations for a single person

•   Update the beneficiaries on your retirement accounts and life insurance

image credit: Bernie Pesko

photo credit: iStock/Valerii Evlakhov

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.

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.

OTM2025012901