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The share of homes owned by Black people remained about the same between 2021 and 2022, according to a recent study by LendingTree.
“The data indicates that Black folks are probably going to face disproportionately steep hurdles that stand in the way of them becoming homeowners,” said Jacob Channel, a senior economist at LendingTree.

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Homeownership is out of reach for many Americans — especially for Black Americans.
In the country’s largest metropolitan areas, Black people own a disproportionately small share of homes relative to population size, according to a new report from LendingTree.

In 2022, Black people made up an average of 14.99% of the population across the 50 largest metropolitan areas of the U.S., but owned an average of 10.15% of owner-occupied homes in such places, the report found. Those figures are roughly flat from 2021.
“Relatively speaking, Black people don’t own that many homes,” said Jacob Channel, a senior economist at LendingTree who authored the study.
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In Memphis, Tennessee, Black people make up nearly half the population, the largest share among all metros in the study. But they only own about 36% of homes in the area, LendingTree found.
LendingTree analyzed the U.S. Census Bureau’s 2022 American Community Survey with one-year estimates. The study ranks the nation’s 50 largest metropolitan statistical areas by the difference between the percentage of owner-occupied homes in a metro owned by those who identify as Black and the share of an area’s population that identifies as Black.

Black people face ‘disproportionately steep hurdles’

“The data indicates that Black folks are probably going to face disproportionately steep hurdles that stand in the way of them becoming homeowners,” said Channel.
One of the hurdles is the income disparity. The median income for Black U.S. households was $51,374, about $29,000 less than the $79,933 median income for white U.S. households, according to the latest U.S. Census Bureau data.
While 51% of Black U.S. households in 2022 made at least $50,000 a year, the shares dwindle as the salary increases, Pew Research Center found. About 34% of Black households made $75,000 or more while 22% made $100,000 or more.
“They tend to have less household wealth, less access to intergenerational wealth,” Channel said.
A lower income can make it harder to save for a down payment and to qualify for a mortgage, especially when both home prices and interest rates remain elevated despite subtle declines.

Another element that comes into play is the tax system.
The tax code has a mortgage interest deduction that “overwhelmingly benefits people who can already afford a home,” said Sarah Hassmer, the director of housing justice at the National Women’s Law Center, a nonprofit organization based in Washington, D.C.
“There are some localities [offering] down payment assistance programs, which are a promising practice, but that is not a lived reality in our federal tax code yet,” Hassmer said.
Down payment assistance is a form of direct payment program that can help people who can already afford a monthly mortgage payment. However, the initial down payment is often the barrier of entry, Hassmer said.
While there are many more structural hurdles that impede homeownership for Black people in the U.S., experts agree that it’s important to keep focus on the issue.
“It’s not going to disappear overnight,” Channel said. “We can’t just burry our heads in the sand and hope and pray one day racial inequality in the U.S. suddenly disappears. That’s obviously not going to happen unless we really work towards it.” Don’t miss these stories from CNBC PRO: More

The age at which you decide to claim Social Security benefits is one of the biggest decisions you will make in retirement.
Here’s what you need to know about getting the biggest benefit checks possible.

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How to find your Social Security full retirement age

If you were born between 1943 and 1954, your full retirement age is 66.

If you were born in 1960 or later, your full retirement age is 67.
The full Social Security retirement age gradually increases from 66 to 67 for people born between those years.

Social Security full retirement age

Year of birth
Social Security full retirement age

1943-1954
66

1955
66 and two months

1956
66 and four months

1957
66 and six months

1958
66 and eight months

1959
66 and 10 months

1960 and later
67

Source: Social Security Administration

For some people, this can come as a surprise, because they may still confuse their Social Security full retirement age with the Medicare eligibility age of 65, according to Elsasser.
Others are familiar with their full retirement age because they have been seeing it on their Social Security statement over the years, he said.
Social Security statements can be accessed online by creating a My Social Security account.

How Medicare can trip up retirees in other ways

It’s not just the Medicare eligibility age that can trip up prospective Social Security retirement beneficiaries, Elsasser noted.
Retirees may be tempted to sign up for Social Security when they become eligible for Medicare at 65 so they do not have to write checks to cover their premiums. Those payments for Medicare Part B — which covers doctor’s visits, outpatient care and preventive services — are typically deducted directly from Social Security benefit checks.
But tying those decisions to each other will result in permanently reduced Social Security benefits, since that would be before full retirement age.
“You really should make those decisions independently of each other,” Elsasser said.

Of course, not everyone can or should delay claiming Social Security retirement benefits. The earliest eligibility age is 62, and experts say claiming then may make sense for individuals in some circumstances, such as if they have a poor health prognosis.
By waiting until full retirement age, you can receive up to 100% of the benefits you’ve earned.
If you delay claiming past your full retirement age and up to age 70, you stand to get an 8% benefit increase per year.
A better way to think about it is that each month you delay is worth two-thirds of 1%, Elsasser said. Therefore, even delays of small increments can help increase your monthly checks over your lifetime.
The full retirement age may be subject to go up again, depending on whether Congress decides to include that change to shore up Social Security’s funding woes.
However, such a change would likely affect only prospective retirees ages 55 and younger, Elsasser predicted, and isn’t necessarily a sure thing, as life expectancy in the U.S. is no longer accelerating. More

Community college may not be the stepping stone to college many people think it is, new reports show.
Just 16% of students who start at a community college earn a bachelor’s degree within six years.
Research shows that students who complete an associate’s degree at a community college before transferring have higher success rates, as do students who start coursework in high school through dual enrollment.

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Going to community college and then transferring to a four-year school is often considered one of the best ways to get a degree for significantly less money.
More students are choosing community college at the outset. Enrollment last fall at community colleges rose 2.6%, far more than any other institution type, according to the National Student Clearinghouse’s latest research.

However, nationwide, only about one-third of students who start at community colleges ultimately transfer to four-year schools, and fewer than half of those transfer students earn a bachelor’s degree within six years.
That means just 16% of all community college students attain a bachelor’s degree, according to recent reports by the Community College Research Center at Columbia University, the Aspen Institute College Excellence Program and the National Student Clearinghouse Research Center.
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“Students often believe their chances of success are much greater than they are — that’s terribly unfortunate,” said Josh Wyner, executive director of the Aspen Institute College Excellence Program.
Further, among low-income students and students of color, the numbers are even more stark: 11% of low-income students transfer and complete bachelor’s degrees in six years, while for Black students, the share drops to just 9%.

Meanwhile, 69% of students who start at a four-year public university complete their degree within six years. At four-year private schools, the completion rate is 78%.
“Too many students are failed by policies and practices that dictate whether and how effectively students transfer from community colleges to universities, particularly students from historically underserved groups,” said Tatiana Velasco-Rodriguez, lead author of the reports and a research associate at the Community College Research Center.

When transferring from community college works

The transfer process can work, experts also say.
Research shows that students who complete an associate’s degree at a community college before transferring have higher success rates, as do students who start coursework in high school through dual enrollment.
Students who begin on a more structured pathway and who benefit from additional resources and advice ultimately do better, according to Velasco-Rodriguez.
To improve transfer outcomes across the board, “we need to apply that to other students,” she said.
However, that responsibility should fall on colleges and universities, rather than high school seniors and college-level freshmen, she added. “This is a call to the higher education system to figure out how to serve your students.”

State-based policies can help

Some states already have better systems in place to support the transfer process and at least 35 states even have policies that guarantee that students with an associate’s degree can then transfer to a four-year state school as a junior.

“There are states like Florida that have very good transfer policies and they tend to do better than the national average,” said the Aspen Institute’s Wyner.
To transfer to the University of Central Florida, for example, community college students sign up for a program called UCF Connect, and they are guaranteed admission if they earn their associate’s degree.
Still, many states don’t track how students are doing once they transfer to a four-year institution, the experts also noted, which is key for improving outcomes across the board.
“The real question is how community colleges and four-year universities can partner to make good on their promise,” Wyner said.
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Smart Tax Planning

Recent IRS enforcement has targeted high-income individuals, large corporations and complex partnerships.
However, average taxpayers could still face an IRS audit for certain tax issues, experts say.

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As Americans file returns this season, some worry about IRS audits amid agency efforts to ramp up service, technology and enforcement.
Recent IRS enforcement has targeted high-income individuals, large corporations and complex partnerships. But everyday filers could still face an audit — and certain issues are more prone to IRS scrutiny, experts say.

You don’t want to face the “audit lottery,” warned Ryan Losi, a certified public accountant and executive vice president of CPA firm Piascik.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

Audit rates of individual income tax returns decreased for all income levels from tax years 2010 to 2019, largely due to lower IRS funding, according to a report from the Government Accountability Office.
The IRS audited 3.8 of every 1,000 returns, or 0.38%, during fiscal year 2022, down from 0.41% in 2021, according to a 2023 report from Syracuse University’s Transactional Records Access Clearinghouse.
But many Americans could have a “false sense of comfort” about their personal audit risk, according to Mark Steber, chief tax information officer at Jackson Hewitt.
Here are some of the biggest IRS audit red flags. 

1. Missing income

For many taxpayers, missing income is easy for the IRS to catch because of so-called information returns, which are tax forms that employers and financial institutions send to the agency.
For example, you may have freelance income reported via Form 1099-NEC or investment earnings on Form 1099-B.
Steber said “mismatched data” is the No. 1 thing that gets taxpayers into trouble. “If you leave stuff off [your return], that could get a question,” he said.

2. Unreasonable tax breaks

Another red flag could be excessive deductions compared to what’s considered normal for your income level, according to Losi.
For example, if your adjusted gross income is around $100,000, but you’re claiming itemized deductions — such as the charitable deduction — similar to million-dollar filers, that could raise eyebrows, he said.
“You need detailed substantiation,” because if you can’t prove you qualify for a tax break during an audit, you could lose the deduction, Losi said.

You need detailed substantiation.

Executive vice president of Piascik

3. Round numbers

Accuracy is critical when filing your return and experts recommend using actual expenses rather than estimates for tax breaks.
When claiming four- or five-digit deductions, it’s “very unlikely” your expenses will be round numbers, Losi said. “You’re opening yourself up to be part of the audit lotto when you do that,” he said.

4. Earned income tax credit

The earned income tax credit, a tax break for low- to moderate-income workers, has historically been scrutinized “because the refundable part attracts certain bad actors,” said Steber.
It’s a complex credit with a high “improper payments rate,” National Taxpayer Advocate Erin Collins wrote in her 2023 Purple Book of legislative recommendations.
While higher earners are more likely to face an audit, EITC claimants have a 5.5 times higher audit rate than the rest of U.S. filers, partly because of improper payments, according to the Bipartisan Policy Center.
However, starting in fiscal 2024, the IRS said it would “substantially” reduce the number of correspondence audits, or audits by mail, for filers claiming the earned income tax credit. More

The Saving on a Valuable Education, or SAVE plan, can cut borrowers’ monthly payments in half, and leave many people with a $0 bill.
Instead of paying 10% of your discretionary income a month toward your undergraduate student debt under the previous Revised Pay As You Earn Repayment Plan, or REPAYE, borrowers will be required to pay just 5% of their discretionary income.
Here’s what to know.

A row of townhouses in Alexandria, Virginia.
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A new, more affordable repayment plan for federal student loan borrowers may come with another advantage: It could make it easier to become a homeowner.
The Saving on a Valuable Education, or SAVE plan, can cut borrowers’ monthly payments in half, and leave many people with a $0 bill. The Biden administration officially rolled out “the most affordable repayment plan yet” over the summer.

“Switching to a repayment plan that has a lower monthly payment can help a borrower qualify for a mortgage,” said higher education expert Mark Kantrowitz.

Half of student loan borrowers — including 60% of millennial borrowers — who haven’t yet purchased a home say their education debt is delaying them from doing so, according to a 2021 report by the National Association of Realtors.
Here’s how the SAVE plan could soon change that, experts say.

Smaller payments can help prospective homebuyers

Your debt-to-income ratio, which is usually calculated by dividing all your monthly debts by your monthly income, is a key factor in mortgage underwriting, said Christelle Bamona, a senior researcher at the Center for Responsible Lending.
“Those eligible for SAVE will experience reduced payments, which will in turn lower their debt-to-income ratio,” Bamona said. Most borrowers should qualify for the SAVE plan as long as their loan is in good standing.

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Borrowers making payments on their student debt who enroll in SAVE could see their ratio fall somewhere between 1.5% to 3.6%, according to a new report by the Center for Responsible Lending.
Here’s how that happens.
For one, the SAVE plan increases the income exempted from your payment calculation to 225% of the poverty line, from 150%. As a result, the first roughly $33,000 of your income won’t be factored into your monthly obligation, up from around $23,000 on the other income-driven repayment plans. These numbers represent single individuals. More income is protected as family size increases.

Starting in July, an even bigger perk of the plan will be available.
Instead of paying 10% of your discretionary income a month toward your undergraduate student debt under the previous Revised Pay As You Earn Repayment Plan, or REPAYE, borrowers will be required to pay just 5% of their discretionary income. The SAVE plan has replaced REPAYE.
Kantrowitz provided some examples of how much borrowers could see their bills drop.
Previously, someone who made $40,000 a year would have a monthly student loan payment of around $151. Under the SAVE plan, their payment would fall to $30.
Similarly, someone who earned $90,000 a year could see their monthly payments shrink to $238 from $568, Kantrowitz said.

In the past, most mortgage lenders assumed that a borrower’s monthly student loan payment was a certain percentage of their loan balance, even if the actual payment was lower, Kantrowitz said.
Fortunately, he said, “They now base it on the actual loan payment.”
There’s one catch: Many mortgage lenders won’t use a $0 monthly student loan payment in their underwriting process, which the SAVE plan could leave many borrowers with. In such cases, lenders may still calculate your monthly obligation as a share of your total debt.
The Center for Responsible Lending wants to see this change.
“By not counting their monthly payments as $0 in the underwriting process, lenders are artificially inflating consumers’ monthly debt obligation,” Bamona said. This could potentially prevent millions of low-income Americans from getting a mortgage, she added.

Saving for a down payment may be easier under SAVE

The SAVE plan may also help more people get in financial shape to buy a house, experts say. That’s because a smaller monthly payment could enable them to direct more cash to their savings, and reach their down payment goal faster.
Student loan borrowers who are first-time homebuyers may also be eligible for financial assistance, Bamona said, and should research their options.
“Grants or down-payment assistance programs may be accessible to first-time homebuyers, provided by agencies and organizations within their state or municipality,” she added.Don’t miss these stories from CNBC PRO: More

High inflation has prompted some food companies to shrink the size of their products.
Now President Joe Biden is calling for them to put a stop to that practice.

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President Joe Biden took to social media ahead of the Super Bowl on Sunday to take a jab at snack companies that are giving consumers less food for their money.
The phenomenon called shrinkflation — where consumer products become smaller in quantity, size or weight while their prices stay the same or increase — is a “rip off,” Biden said.

“Some companies are trying to pull a fast one by shrinking the products little by little and hoping you won’t notice,” said Biden, who called for the companies to put a stop to the practice.
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Shrinkflation is showing up in subtle ways as sports drinks get smaller, bags of snacks have fewer chips and ice cream cartons shrink in size, Biden noted.
“The American public is tired of being played for suckers,” Biden said.

How shrinkflation, inflation are tied

The downsizing of products is nothing new and has been going on since the 1950s, according to Edgar Dworsky, a consumer lawyer and founder of the website Consumer World, who has spoken out against shrinkflation for decades.

These tactics tend to become more prevalent during times of high inflation, Dworsky said.
As prices on grocery store shelves and elsewhere have shot up, many consumers are more sensitive now to how much they are getting for their money.
Shrinkflation videos have trended on TikTok. Meanwhile, a 2022 Morning Consult poll found 64% of all adults said they are worried about it.

The president is the newest critic in Washington of shrinkflation.
In December, Sen. Bob Casey, D-Pa., spoke out against the practice with the release of a report that detailed its effects.
“This corporate greed is one of the reasons that Americans are frustrated by expensive grocery bills,” Casey said in a December statement.
Household paper products saw the biggest jump, with a 10.3% measured price increase attributable to shrinkflation, according to Casey’s report, based on data from the U.S. Bureau of Labor Statistics.
Snacks were the next category, with a 9.8% spike attributable to shrinkflation; followed by household cleaning products, 7.3%; coffee, 7.2%; and candy and chewing gum, and ice cream and related products, each with 7%.
Dworsky said he currently has a list of about nine item changes that he has been tracking since December. One of his investigations last year found consumers were getting short-changed on the number of chocolates in Valentine’s Day cardboard heart boxes.
“I’m hoping with inflation subsiding a little bit that we’ll see fewer examples, but it’s never going to go away,” Dworsky said.

How consumers can limit the effects of shrinkflation

The best approach consumers can take is to stay aware of the issue, Dworsky said.
For products you buy regularly, monitor the net weight. If a tube of toothpaste shifts from 3.9 ounces to 3.5, you may want to consider buying a competing brand that has not downsized yet, Dworsky said.
Also keep in mind that gravitating toward certain product sizes with names like “fun size” or “family size” may lead you to still buy a product out of habit even after it shrinks.

If you write a letter to the manufacturer to complain, it’s unlikely you will get them to change back to the old size, he said.
“You may get some coupons in the mail, which is always nice,” Dworsky said.
Still, Dworsky said he was thrilled when Biden’s video went live on Sunday.
“To see the president trying to educate the public about shrinkflation and to call on manufacturers to voluntarily curtail the practice, who could ask for more?” Dworsky said.Don’t miss these stories from CNBC PRO: More

Several areas in the U.S. are vulnerable to extreme weather hazards, according to a data analysis by Harvard researchers.
However, exposed rental units are concentrated in two particular states.

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More than 18 million rental units are located in areas exposed to extreme weather hazards, according to the American Rental Housing Report from Harvard University’s Joint Center for Housing Studies.
That exposure isn’t spread evenly. While most states have at least one “high-risk” county with 2,000 or more rental units, many are concentrated in California and Florida.

Harvard researchers paired data from the Federal Emergency Management Agency’s National Risk Index with the five-year American Community Survey to find out what units are in the areas that are expected to have an annual economic loss from environmental disasters such as wildfires, flooding, earthquakes, hurricanes and more.
A high-risk area is one with a “relatively moderate,” “relatively high” or “very high” expected annual loss.

“What the map is showing is the number of rental units that are located in areas that have at least moderate risk,” said Sophia Wedeen, a research analyst focused on rental housing, residential remodeling and affordability at the Joint Center for Housing Studies.

How many rentals are at risk in California and Florida

Harvard researchers found the number of rental units exposed to climate hazards in the U.S. by combining an area’s risk of economic loss from natural disasters with the number of rental units in those areas, Wedeen said.
Florida, for example, has many rental units as well as census tracts, or neighborhoods, that FEMA identified as having at least moderate risk, Wedeen said. The state appears as a hot spot as a result. The same applies for areas in California.

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California has 4.6 million rental units, or 77% of the state’s rental stock, located in census tracts or neighborhoods that are estimated to face annual economic losses through climate-related hazards.
Florida has 2.4 million rental units at risk, or about 89% of its rental stock, according to the Harvard study.

How renters can protect themselves

As more areas in the U.S. become further exposed to climate-related risks, it will be important for renters to consider renters insurance and understand what such policies cover, experts say.
To that point, landlords and building owners are responsible for any physical damage to the building or unit caused by natural disasters. But their property insurance does not cover a tenant’s personal belongings.
Renters insurance policies usually cover losses or damages to a tenant’s personal property and some even cover living expenses if a tenant needs temporary housing during a unit’s repair.
Renters should check what type of disasters are included in their renters insurance policy. They may need riders or a separate policy to cover risks such as flooding or earthquakes, experts say.

Additionally, renters may want to shop around for insurance plans before signing a lease in an at-risk area. Homeowners in some areas are struggling to find coverage as major insurers leave some markets exposed to fires and floods.
“The best thing that renters can do is make sure what types of products are available to protect their property but then also … understand risk,” said Jeremy Porter, head of climate implications research for First Street Foundation.
Renters should understand the climate risks of buildings they live in and make informed decisions, Porter explained.Don’t miss these stories from CNBC PRO: More

Smart Tax Planning

The IRS has issued more than 2.6 million refunds worth roughly $3.65 billion, the agency announced on Friday.
As of Feb. 2, the average refund is $1,395, down about 29% compared to one year prior.
However, the first filing season statistics for 2024 are only based on five days of data compared to 12 days in 2023, according to the IRS.

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With tax season in full swing, the IRS has issued more than 2.6 million refunds worth about $3.65 billion, as of Feb. 2, the agency reported last week.
So far, the average refund is $1,395, compared with $1,963 one year ago, which is roughly 29% smaller.

However, since the 2024 tax season kicked off on Jan. 29, the average refund is only based on five days, compared with 12 days from one year ago, the IRS noted Friday, saying the early statistics suggest a “strong start to filing season 2024.”

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

“It really is very preliminary data,” said Mark Steber, chief tax information officer at Jackson Hewitt. “I caution anyone on reading too much into an entire year, or a tax season of 3½ months, on five days worth of data.”
Last year, the average refund for the 2023 filing season was $3,167, as of Dec. 29, according to the IRS.
A lot of people who typically file early — such as earned income tax recipients and child tax credit recipients — still haven’t filed, Steber said.
By law, filers claiming the refundable portion of the child tax credit or earned income tax credit won’t get refunds until Feb. 27 at the earliest, the IRS says.

Why some tax refunds could be bigger

Typically, you can expect a refund when you overpay taxes throughout the year. Many workers automatically send money via paycheck withholdings. By comparison, you may owe money if you didn’t pay enough last year.
“We’re still seeing bigger refunds coming,” Steber said, partially due to higher inflation.  
If your income didn’t keep pace with inflation in 2023, you could see a larger refund this season due to IRS inflation adjustments, he said, such as higher federal tax brackets, the standard deduction and more.
“We fully expect refunds to be healthy,” Steber added.

‘Don’t wait on Congress’ to file

There’s pending tax legislation in Congress that could provide a retroactive boost for the child tax credit for 2023, which could increase refunds for certain eligible filers.
But if taxpayers are prepared to file, they shouldn’t wait, according to the IRS.
“We urge and encourage taxpayers to file when they’re ready,” IRS Commissioner Danny Werfel told reporters in January during a press call. “Don’t wait on Congress.”
However, nearly half of taxpayers don’t plan to file until March or later, citing complexity and stress as the top reasons for delaying, according to a January survey from IPX1031, an investment property exchange service. More