Connect with us

Finance

Mortgage payments soar for prospective homeowners in swing states

Published

on

Housing payments have risen by 92% in swing states since 2020.  (iStock )

The housing affordability crisis is hitting swing states hard. These battleground states, which could potentially be won by either candidate, are especially focused on the issue of affordability in the upcoming election. About nine in 10 adult Gen Zers reported housing affordability is important when deciding who to vote for, Realtor.com found.

Housing payments in swing states have nearly doubled since the last election, rising by 92% to $2,161, on average. Rising home prices and mortgage rates have largely contributed to this jump in ownership costs. The average sales price in swing states increased by about 40% since 2020, and now sits at just over $316,000 in 2024. Mortgage rates have more than doubled to about 7% since the beginning of 2021, when they were 2.65%, on average.

Both red and blue states have faced similar fates, but red states have fared slightly worse, with median housing payments rising by 95%. Blue states saw an increase of 83% in average mortgage payments, according to Realtor.com.

These increases in housing costs have made it impossible for many residents in swing states to afford an average-priced home, based on the general rule that households shouldn’t spend more than 30% of their income on housing costs.

To afford the monthly costs of owning a home in a swing state, the average family income must be $86,421 to stick to the 30% rule. Just four years ago, the income required in these states was just over $45,000. To give some perspective, a household earning the median income in swing states would currently need to spend 32.8% of their income to comfortably afford a home versus the 21.8% they needed to spend back in 2020.

If you’re thinking of shopping around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.

HOUSING BEGINS TO TIP IN FAVOR OF BUYERS; SELLERS SLASH PRICES TO ENTICE THEM BACK TO MARKET: REPORT

Lower-income groups struggle most in swing states

Housing costs have grown unaffordable for many families in swing states, but lower-income households and certain social groups have struggled the most under high home costs. Income growth simply isn’t keeping up with the more rapid growth of housing prices.

“Voters in swing states care about housing affordability because soaring home prices and mortgage rates, along with a shortage of homes for sale, have made homeownership feel impossible for some Americans. That’s especially true for young people who are earning low incomes and haven’t yet built up their savings, making them feel it would be an uphill battle to reach their parents’ level of financial success,” Redfin Senior Economist Elijah de la Campa said.

“While swing states have historically had lower housing costs than blue states — and most still do — markets in swing states have not been immune to the affordability crunch the country has been facing for the last several years. The inability to afford a home is making a lot of voters feel bad about the economy and their financial prospects,” said de la Campa.

Black and Hispanic households, in particular, face difficulties securing affordable housing. The average Black household in a swing state would have to spend 48.2% of their income to afford a typical home while the typical Hispanic family would spend 38.3% of their income. This is up for both of these groups compared to 2020.

Comparatively, white families would need to spend just 29.8% of their monthly earnings on a home to realistically afford it, so they’d be able to slide under the 30% spending mark suggested by experts. This is still up from 19.8% needed in 2020.

If you’re looking to purchase a home, consider visiting Credible to find the best mortgage rate for your financial situation.

THE AVERAGE DOWN PAYMENT FOR THE TYPICAL US HOME REACHES $127,750: ZILLOW

Rate cuts are expected later in the year

Rate cuts are expected in September, on the heels of a cooling inflation report. The Federal Reserve has been waiting on rate cuts until the economy shows more consistent signs of recovery, namely lowering inflation. This hold on rate cuts has led to increasing mortgage rates that have hovered in the 7% range for the better part of a year.

In anticipation of rate cuts, mortgage rates have fallen in recent weeks, landing at 6.78% recently. Although rate cuts would be welcome across the board, experts remain divided on just how much more mortgage rates would drop if the Fed chooses to cut rates in September.

Many believe that rates won’t drop by as much as prospective homebuyers would like. In fact, the first rate cut could have little effect on mortgage rates. Assuming the Fed continues to cut rates throughout the year and into 2025, then buyers could see more downward movement on rates.

Still, buyers have been waiting long enough for rates to drop, that any movement may lead to larger home sales.

Consumers that want to see what kind of loan term and rates would work for them can take advantage of Credible’s free online tools.

MANY HOMES ARE SITTING STAGNANT ON THE MARKET, CAUSING MORE FREQUENT PRICE DROPS

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

Continue Reading

Finance

Buffett denies social media rumors after Trump shares wild claim that investor backs president crashing market

Published

on

Berkshire Hathaway responds to 'false reports' on social media

Warren Buffett went on the record Friday to deny social media posts after President Donald Trump shared on Truth Social a fan video that claimed the president is tanking the stock market on purpose with the endorsement of the legendary investor.

Trump on Friday shared an outlandish social media video that defends his recent policy decisions by arguing he is deliberately taking down the market as a strategic play to force lower interest and mortgage rates.

“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose,” alleged the video, which Trump posted on his Truth Social account.

The video’s narrator then falsely states, “And this is why Warren Buffett just said, ‘Trump is making the best economic moves he’s seen in over 50 years.'”

The president shared a link to an X post from the account @AmericaPapaBear, a self-described “Trumper to the end.” The X post itself appears to be a repost of a weeks-old TikTok video from user @wnnsa11. The video has been shared more than 2,000 times on Truth Social and nearly 10,000 times on X.

Buffett, 94, didn’t single out any specific posts, but his conglomerate Berkshire Hathaway outright rejected all comments claimed to be made by him.

“There are reports currently circulating on social media (including Twitter, Facebook and Tik Tok) regarding comments allegedly made by Warren E. Buffett. All such reports are false,” the company said in a statement Friday.

CNBC’s Becky Quick spoke to Buffett Friday about this statement and he said he wanted to knock down misinformation in an age where false rumors can be blasted around instantaneously. Buffett told Quick that he won’t make any commentary related to the markets, the economy or tariffs between now and Berkshire’s annual meeting on May 3.

‘A tax on goods’

While Buffett hasn’t spoken about this week’s imposition of sweeping tariffs from the Trump administration, his view on such things has pretty much always been negative. Just in March, the Berkshire CEO and chairman called tariffs “an act of war, to some degree.”

“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” Buffett said in the news interview with a laugh. “And then what? You always have to ask that question in economics. You always say, ‘And then what?'”

During Trump’s first term, Buffett opined at length in 2018 and 2019 about the trade conflicts that erupted, warning that the Republican’s aggressive moves could cause negative consequences globally.

“If we actually have a trade war, it will be bad for the whole world … everything intersects in the world,” Buffett said in a CNBC interview in 2019. “A world that adjusts to something very close to free trade … more people will live better than in a world with significant tariffs and shifting tariffs over time.”

Buffett has been in a defensive mode over the past year as he rapidly dumped stocks and raised a record amount of cash exceeding $300 billion. His conglomerate has a big U.S. focus and has large businesses in insurance, railroads, manufacturing, energy and retail.

Continue Reading

Finance

Stocks making the biggest moves midday: PLTR, CAT, AAPL JPM

Published

on

Continue Reading

Finance

Powell sees tariffs raising inflation and says Fed will wait before further rate moves

Published

on

US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC on March 19, 2025. 

Roberto Schmidt | Afp | Getty Images

Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump’s tariffs to raise inflation and lower growth, and indicated that the central bank won’t move on interest rates until it gets a clearer picture on the ultimate impacts.

In a speech delivered before business journalists in Arlington, Va., Powell said the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday.

Though he said the economy currently looks strong, he stressed the threat that tariffs pose and indicated that the Fed will be focused on keeping inflation in check.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in prepared remarks. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

The remarks came shortly after Trump called on Powell to “stop playing politics” and cut interest rates because inflation is down.

There’s been a torrent of selling on Wall Street following the Trump announcement of 10% across-the-board tariffs, along with a menu of reciprocal charges that are much higher for many key trading partners.

Powell noted that the announced tariffs were “significantly larger than expected.”

“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said. “The size and duration of these effects remain uncertain.”

Focused on inflation

While Powell was circumspect about how the Fed will react to the changes, markets are pricing in an aggressive set of interest rate cuts starting in June, with a rising likelihood that the central bank will slice at least a full percentage point off its key borrowing rate by the end of the year, according to CME Group data.

However, the Fed is charged with keeping inflation anchored with full employment.

Powell stressed that meeting the inflation side of its mandate will require keeping inflation expectations in check, something that might not be easy to do with Trump lobbing tariffs at U.S. trading partners, some of whom already have announced retaliatory measures.

A greater focus on inflation also would be likely to deter the Fed from easing policy until it assesses what longer-term impact tariffs will have on prices. Typically, policymakers view tariffs as just a temporary rise in prices and not a fundamental inflation driver, but the broad nature of Trump’s move could change that perspective.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said. “Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”

Core inflation ran at a 2.8% annual rate in February, part of a general moderating pattern that is nonetheless still well above the Fed’s 2% target.

In spite of the elevated anxiety over tariffs, Powell said the economy for now “is still in a good place,” with a solid labor market. However, he mentioned recent consumer surveys showing rising concerns about inflation and dimming expectations for future growth, pointing out that longer-term inflation expectations are still in line with the Fed’s objectives.

Get Your Ticket to Pro LIVE

Join us at the New York Stock Exchange!
Uncertain markets? Gain an edge with 
CNBC Pro LIVE, an exclusive, inaugural event at the historic New York Stock Exchange.

In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12.

Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!

Continue Reading

Trending