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American Wealth Is at a Record High. Sentiment Is Low, and Falling.

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America is more prosperous than ever.U.S. household net worth reached a new peak at the end of 2024. The unemployment rate has levitated just above record lows for three years. The overall debt that households are carrying compared with the assets they own is also near a record low.But even a land of plenty has its shortcomings, influencing both perceptions and realities of how Americans are doing.The U.S. economy remains deeply unequal, with vast gaps in wealth and financial security persisting even as inflation has ebbed and incomes have risen. And data designed to capture the overall population may be obscuring challenges experienced by a broad range of Americans, especially those in the bottom half of the wealth or income spectrum. More

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    How Fed Rates Influence Mortgages, Credit Cards, Savings and More

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    The Federal Reserve is expected to keep its key rate steady on Wednesday, after a series of cuts that lowered rates by a full percentage point last year.That means consumers looking to borrow are likely to have to wait a bit longer for better deals on many loans, but savers will benefit from steadier yields on savings accounts.Economists don’t expect another rate cut for a while, as the central bank waits for more clarity on an increasingly uncertain outlook given President Trump’s policies on tariffs, immigration, widespread federal job cuts, among other things.The Fed’s benchmark rate is set at a range of 4.25 to 4.5 percent. In an effort to tamp down sky-high inflation, the central bank began lifting rates rapidly — from near zero to above 5 percent — between March 2022 and July 2023. Prices have cooled considerably since then, and the Fed pivoted to rate cuts, lowering rates in September, November and December.More recently,Mr. Trump’s inflation-stoking polices could prompt the Fed to delay more rate cuts. But at the same time, longer-term interest rates set by the markets have been drifting down, influencing a wide range of consumer and business borrowing costs.Here’s what to watch for in five areas of your financial life:Auto RatesCredit CardsMortgagesSavings Accounts and C.D.sStudent LoansWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    How ‘Silo’ and ‘Paradise’ Envision Housing After the Apocalypse

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    “Paradise” and “Silo” have opposing takes on the future of urban organization, echoing the debate over America’s housing shortage today.“Paradise” is a TV show on Hulu about a postapocalyptic society that lives underground in a suburb. “Silo” is a TV show on Apple TV+ about a postapocalyptic society that lives underground in an apartment tower.Both are propelled by mysteries. Both feature curious heroes. Both have shifty leaders who lie, blackmail and murder to keep their secrets hidden and their denizens in line.The shows have much in common, in other words.But somehow they find opposing answers to a question that seems increasingly relevant in a warming world: If the planet goes to hell and humanity heads to a bunker, what sort of neighborhood will we build inside it? A spacious holdout that tries to approximate a comfortable standard of living, or a cramped locker that saves more lives but leaves the survivors miserable?By imagining wildly different landscapes in response to the same end-of-the-world conceit, the shows use cinematic extremes to show how civilization and class divisions are constructed through the apportionment of space. People like to live around other people right up to the moment they feel their neighborhood has been overrun by others, at which point the hunger for togetherness becomes an impulse to exclude.A good amount of today’s housing politics fall within these parameters, whether it’s a proposal to build apartments in a suburb or a plan to cover farms with a new city. The fact that this debate now extends to fictional bunkers has me convinced that in the aftermath of global calamity, people will be at some dystopian City Council meeting arguing about zoning.Curious how they came up with their underground cities, I called writers of the two works — Dan Fogelman, the creator and showrunner of “Paradise,” and Hugh Howey, author of the novels on which “Silo” is based. I wanted to understand the inspiration for each world and what those worlds tell us about the societal trade-offs between accommodating a lot of people and trying to make those people happy.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Privatization of Fannie Mae and Freddie Mac Means

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    Fannie Mae and Freddie Mac were bailed out by the government during the housing crisis nearly 17 years ago. The Trump administration is considering letting them go private again.Fannie Mae and Freddie Mac, two giant mortgage finance firms, have been controlled by the federal government for nearly 17 years, but a long-dormant idea of making them private businesses is starting to make the rounds in Washington again.Scott Turner, the secretary of Housing and Urban Development, said in an interview this week that coordinating the effort to privatize the two firms would be his priority. One of President Trump’s backers, the hedge fund investor William A. Ackman, is calling on the president to quickly move forward on the privatization.But Fannie and Freddie underpin the nation’s $12 trillion mortgage market, so they need to be handled with care. Scott Bessent, the Treasury secretary, said last month that any plan for ending the so-called conservatorship of the two firms “should be carefully designed and executed.”The last time Mr. Trump was president, a number of his advisers took steps toward coming up with a plan for releasing Fannie Mae and Freddie Mac from government control. In the end, the first Trump administration took no action, and the Biden administration put the issue on the back burner.Here is a quick primer on why Fannie and Freddie are so critical to the mortgage market and some of the issues likely to come up in the debate over how to end the conservatorship.What do Fannie and Freddie do?“No conservatorship should be indefinite,” Scott Bessent, the Treasury secretary, wrote in a response to questions before his confirmation.Haiyun Jiang for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Existing-Home Sales in 2024 Were Slowest in Decades Amid High Mortgage Rates

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    The market perked up late in the year when interest rates eased, but affordability challenges yielded the fewest transactions since 1995.High interest rates kept U.S. home sales in a deep freeze for much of last year. It could be a while before the market experiences much of a thaw.Americans bought just over four million previously owned homes last year, the National Association of Realtors said on Friday. That was the fewest since 1995 and far below the annual pace of roughly five million that was typical before the coronavirus pandemic.Sales picked up a bit toward the end of the year, rising 9.3 percent in December from a year earlier. That increase probably reflected the dip in mortgage rates in the summer and early fall — to about 6 percent on average for a 30-year fixed-rate mortgage — which made homes more affordable for buyers.But mortgage rates have since rebounded to about 7 percent, and most forecasters don’t expect them to come down much in the next few months. That makes a significant increase in home sales unlikely this year, said Charlie Dougherty, an economist at Wells Fargo.“You saw sales beginning to perk up a little bit, but it’s still sluggish,” he said. “I don’t think it’s indicative of a really forceful or energetic recovery that’s going to be coming.”Home prices soared during the pandemic, as Americans sought more space and rock-bottom interest rates made it easy to borrow. Real-estate agents told of frenetic bidding wars as buyers competed for available homes.That frenzy suddenly stopped when the rapid increase in inflation led the Federal Reserve to raise interest rates to their highest level in decades. Interest rates on a 30-year fixed-rate mortgage jumped, from below 3 percent in late 2021 to nearly 8 percent two years later.The combination of high prices and high interest rates made homes unaffordable for many seeking to buy. And owners, many of whom had either bought their homes or refinanced their mortgages when rates were low, had little incentive to sell. That kept inventories low and prices high.There are hints that the housing market might gradually be returning to normal, as life events — new jobs, new babies, marriages, divorces — force owners to sell, and as buyers adjust to higher borrowing costs. Inventories have edged up, and surveys show more owners plan to sell.But unless mortgage rates fall, that normalization process is likely to be slow, Mr. Dougherty said.“I think it’s probably safe to say that home sales have found a floor,” he said. But, he added, “if you look at the overall level, it’s still very, very weak.” More

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    Fannie and Freddie, the Big Mortgage Backers, Face Climate Risks

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    Fannie Mae and Freddie Mac know increasing floods and wildfires are a problem. Dealing with them, however, would require trade-offs.As sea levels rise and natural disasters become more intense, homes in low-lying coastal areas or tinder-dry mountains are starting to lose value.That’s a problem for the finances of Fannie Mae and Freddie Mac, the government-sponsored enterprises that back half of the nation’s outstanding mortgages — and keep the residential real estate market liquid by buying mortgages from banks and repackaging them into securities.In the first year of the Biden administration, financial regulators seemed to recognize the risk, identifying the mortgage market as one of the main channels through which climate change could destabilize the financial system.Since then, reports have been published, comments gathered and summits held. But when it comes to insulating the two enterprises and borrowers from climate-related catastrophe, the Federal Housing Finance Agency — which regulates Fannie and Freddie — has issued only vague guidance.“It came out and I thought, where’s the rest of it?” said Carlos Martín, director of the Remodeling Futures Program at the Harvard Joint Center for Housing Studies.The issue comes with risk for taxpayers as well, since the federal government took Fannie and Freddie into conservatorship in 2008 after the financial crisis. Fannie and Freddie have reserve capital buffers, but large losses could force the government to intervene.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Walter Mosley’s Fictional Hero Teaches Us About Race and Real Estate

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    About a third of the way through “Farewell, Amethystine,” the latest novel in the author Walter Mosley’s series about a private investigator named Ezekiel (Easy) Rawlins, Easy sets out for a late-night meeting with a gun and a hunch.The book is on a narrative precipice in which our gumshoe has knocked on enough doors and been told enough lies that both he and the reader understand that the simple missing-person case presented in Chapter 2 is about to become violent.But before it goes down, Easy pauses the action to make a weird declaration: He doesn’t need this job. He makes more than enough money renting real estate.Easy is a Black World War II veteran who fled the Jim Crow South for a better life in Los Angeles. In “Devil in a Blue Dress,” the 1990 classic that started both the series and Mosley’s career, Easy takes his first case so he can pay his mortgage and uses a windfall to add a rental property. The ups and downs of real estate continue as a recurring theme and story engine, especially in the early books, where the remedy for some tax lien or underwater mortgage is often to solve whatever mystery is driving the plot.Now, two decades of buying and holding later, Easy is flush. As he explains in “Farewell, Amethystine,” his 12 buildings have a total of 101 rental units that a friend manages for a 0.8 percent fee. Subtract that commission along with mortgage payments and general upkeep, and his take-home is $26,000 a year in 1970 (the year the novel takes place), which, adjusted for inflation, would be about $217,000 today.“I wasn’t rich,” Easy says. “But I sure didn’t need to be going out among the hammerhands and scalawags in the middle of the night.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Mortgage Rates Fell, Then Rose. What Comes Next?

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    Many would-be home buyers are still hoping for mortgage rates to come down as the Federal Reserve cuts interest rates. How much they will fall is unclear.Rafael Corrales, a real estate agent in Miami, recently showed houses to a young couple hoping to move from a rental into a home. They had been lured to the market after hearing that mortgage rates had come down.But when the couple went to get approved for a home loan, they found that the borrowing costs had ticked up once again.“They were very confused,” said Mr. Corrales, 49, an agent for Redfin. It pushed them back onto the sidelines of the housing market, and they’re now staying put in the hope that rates will fall again.Mortgage rates fell steadily from this spring through September, as economic data slowed and as investors began to expect a steady string of interest rate cuts from the Federal Reserve. But the rate on a 30-year mortgage has reversed course and climbed sharply over the past month to 6.79 percent nationally, from about 6.1 percent at the start of October.The move has come as a shock to some home buyers, who had waited many months for Fed officials to begin lowering borrowing costs, hoping that they would bring relief to the mortgage market.The logic was fairly simple. When the Fed lowers its benchmark interest rates, the downward shifts tend to trickle through financial markets to lower other interest rates. While the biggest impact is on short-term rates, the effect can extend to 10-year Treasury notes, which mortgages closely track. And the Fed is, in fact, adjusting policy. Officials cut interest rates for the first time in four years in September, and they followed with a quarter-point rate cut on Thursday.

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    U.S. average 30-year fixed-rate mortgage
    Source: Freddie MacBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Blames Immigrant Surge for Housing Crisis. Most Economists Disagree.

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    The former president often implies that deportations will bring down housing costs. Reality is more complicated.Former President Donald J. Trump and his running mate, Senator JD Vance, regularly blame America’s housing affordability crisis on a recent surge in immigration. They point to their plans for mass deportations of undocumented workers as part of the solution.But most economists do not believe that immigrants have been a major driver of the recent run-up in housing prices. Rents and home costs started to surge in 2020 and 2021, before the flow of newcomers began to pick up in 2022 and 2023.And while immigrants could have kept housing demand elevated in some markets, past studies suggest that they are a small part of the overall story. Even the economist whose paper Mr. Vance had cited as evidence said in an interview that she thought that immigration’s recent impact on housing costs had been minuscule.In fact, a number of economists and housing industry experts said that one of the solutions Mr. Trump was proposing — large-scale deportations — could actually backfire and make the housing crisis worse.That’s because immigrants do not simply add to the demand for housing: They are an important part of the work force that supplies it. Foreign-born workers make up a quarter of the construction labor force, and they are especially concentrated in trades like plastering, hanging drywall and roofing.Across many booming housing markets, particularly in the South, the recent flow of migrants has helped residential builders meet demand for both skilled trades and relatively unskilled laborers, industry groups say and job market data suggest.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More