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Updated: 14 hours 13 min ago

20 Desirable Neighborhoods: Popular, but Not Sought-After

May 3, 2018 - 4:07pm

Homebuyers often idealize their wants on their wish list—and, for many, location is at the top.

The aspiration for a certain location, however, may be just that: an aspiration, according to a new report by Zillow that identifies what areas buyers are interested in the most:

20 Desirable Neighborhoods, Ranked

Led by L.A.’s The Oaks, Atlanta’s Tuxedo Park and San Francisco’s Presidio Heights, the majority of neighborhoods ranked by Zillow are enclaves with high price tags, suggesting that although buyers have a demonstrated interest in them, it is more out of curiosity or desire than an intent to purchase. Zillow based its list on the neighborhood’s number of pageviews during the first three months of 2018.

“Real estate shoppers are usually very aspirational, so it’s no surprise we have a lot of shoppers looking outside of where they can likely afford and instead, looking at beautiful homes in desirable areas,” says Aaron Terrazas, senior economist at Zillow. “We see these more posh neighborhoods drawing shoppers in, but ultimately, these probably aren’t the neighborhoods most will end up in—the typical price of entry in the majority of neighborhoods on this list is generally much higher than their city as a whole.”

Homes in Malibu’s Point Dume—No. 7 in pageviews—are the steepest: a median $5,995,000, according to the report. Bel Air (No. 4) follows at a median $5,385,000. Homes in Crestwood, in Yonkers, N.Y. (No. 17), are at a median $559,735—the most affordable, relatively, of the top 20. Six of the top 20 are in the San Francisco metro, five are in the Los Angeles-Long Beach-Anaheim metro, and three are in the Atlanta metro—the majority, markedly, are on the West Coast.

“It’s hard to blame these buyers, because, really, who hasn’t dreamed big when home shopping?” Terrazas says. “Oohing and ahhing over beautiful homes has become one of America’s favorite pastimes.”

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Taxes Filed—Time to Chill? Not So Fast, Says IRS

May 1, 2018 - 4:15pm

(TNS)—The April 18 federal tax-filing deadline has come and gone. Your taxes are paid, and maybe you already have your refund in hand. Nothing to do now but sit back and chill for eight months or so, right?

The Internal Revenue Service respectfully disagrees.

Given recent changes in tax tables created by the Tax Cuts and Jobs Act of 2017, IRS officials are urging taxpayers to do a “paycheck checkup” and other double-checks, the better to avoid a possibly unpleasant surprise in early spring next year.

“The IRS is taking special steps to help taxpayers understand these tax law changes,” said Acting IRS Commissioner David Kautter. “We encourage people to do a paycheck checkup to help make sure they’re having the right amount of tax withheld for their unique personal situation. To help with this, the IRS has added and updated a variety of tools and information to help taxpayers.”

The IRS says taxpayers should start by determining how much money they want employers to withhold from their paychecks.

That can be done on the “Withholding Calculator” link on www.IRS.gov. Having too little tax withheld can mean a surprisingly high tax bill next year, and with the average refund topping $2,800, the IRS said some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.

Taxpayers can use the calculator to estimate their 2018 income tax. It compares that estimate to the taxpayer’s current tax withholding options. Some may wish to change their withholding with their employer. The IRS notes that it’s helpful to have a completed 2017 tax return with you when you visit the website.

Taxpayers who need to adjust their withholding will need to submit a new Form W-4, also known as an Employee’s Withholding Allowance Certificate, to their employer. If an employee needs to adjust withholding, doing so as quickly as possible means there’s more time for tax withholding to take place evenly over the rest of the year. Waiting until later in the year means there are fewer pay periods to make the tax changes, which could have a bigger impact on each paycheck.

The IRS said the paycheck checkup is highly recommended for two-income families, people working two or more jobs, parents who claim credits such as the Child Tax Credit, people who itemized deductions in 2017 and those who received either large tax refunds or large tax bills in 2017.

The IRS also has launched a series of “tax reform tax tips” at www.irs.gov/newsroom/tax-reform. The periodic notices offer tax changes and other information in plain language.

For some, tax season goes on even now. That includes citizens who filed for an extension, others who did not file or pay what is owed, or those awaiting refunds. The IRS said it has help available for them, too.

There’s no penalty for filing a late return after the tax deadline if a refund is due. Penalties and interest only accrue on unfiled returns if taxes were not paid by April 18. IRS “Free File” is available through October 15 for incomes less than $66,000. To get more information to file electronically, visit www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.

If a federal return is filed more than 60 days after the April due date, the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

In some cases, taxpayers filing after the deadline may qualify for penalty relief. If there is a good reason for filing late, the IRS said taxpayers should attach an explanation to their returns. The IRS also noted that taxpayers who have a history of filing and paying on time often qualify for penalty relief. The agency said a taxpayer will usually qualify for such relief if they haven’t been assessed penalties for the past three years and meet other requirements. For more information, do a “first-time penalty abatement” search on www.IRS.gov.

Still looking for your refund? Go to www.irs.gov/refunds, where multiple options are explained to check on your refund status.

Those who owe taxes can get information on payments or applying online for a payment plan at www.irs.gov/payments/view-your-tax-account.

The IRS said it routinely corrects math errors on returns and subsequently notifies taxpayers by mail. If a taxpayer discovers a major error or omission, however, the federal tax agency suggests consulting this site to determine if an amended return is necessary: www.irs.gov/help/ita/should-i-file-an-amended-return.

Finally, the IRS stressed that it never makes initial, unsolicited contact via email, text or social media on filing, payment or refund issues. The IRS initiates most contacts through regular mail. Any email that appears to be from the IRS about a refund or tax problem is likely a scam attempt. Don’t give out any key personal information in an email. The IRS wants those suspicious emails forwarded to phishing@irs.gov.

©2018 The Sacramento Bee (Sacramento, Calif.)
Distributed by Tribune Content Agency, LLC

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Categories: Real Estate

5 Challenging Markets for Millennials

April 30, 2018 - 4:27pm

Across the country, buyers are competing in what has been called the “harshest market yet“—but for millennials, the competition is fiercest in higher-income metros, according to an analysis by realtor.com®:

  1. San Jose, Calif.
    List Price (Median): $1,244,000
    Millennial Income: $109,800
    Millennial Population: 14.3 percent
  1. Seattle, Wash.
    List Price (Median): $553,000
    Millennial Income: $78,300
    Millennial Population: 15.4 percent
  1. Salt Lake City, Utah
    List Price (Median): $394,000
    Millennial Income: $67,800
    Millennial Population: 15.5 percent
  1. Minneapolis, Minn.
    List Price (Median): $283,000
    Millennial Income: $73,600
    Millennial Population: 13.8 percent
  1. Omaha, Neb.
    List Price (Median): $283,000
    Millennial Income: $63,500
    Millennial Population: 13.8 percent

Across the five markets, the economies are flourishing, and Gen Y is raking in more than the average millennial, who earns $59,800 yearly.

The issue?

“Millennials want to buy, but record-low inventory is making it extremely difficult,” says Danielle Hale, chief economist for realtor.com. “Our analysis shows millennials are facing challenges in both established markets such as San Jose and Seattle, as well as more recently popular areas like Omaha and Salt Lake City.”

The dearth of inventory is a nationwide problem, but intensified in the markets ranked. According to the analysis, there are 8 percent fewer listings nationally year-over-year, but across the five markets, there are 9 percent less—and though the age of inventory nationally is down 7 percent, in the five markets, age of inventory is down by double, roughly: 13 percent.

The paradox is pronounced in San Jose and Seattle, in that there are blinding-bright employment prospects, but severely short supply. In both cities, the demand from the influx of residents, including younger workers, is exceeding what the market has to offer. Both have above-average pay, but earnings are failing to keep pace with prices—and the challenges in the top two are manifesting in Minneapolis, Omaha and Salt Lake City, where burgeoning demand is impacting inventory.

According to Hale, however, millennials are undeterred.

“Despite the difficulties, first-timers are optimistic and more than willing to weather the challenges this spring has to offer,” Hale says.

For more information, please visit www.realtor.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Is ‘Green’ at a Premium? Depends Where You Purchase

April 21, 2018 - 12:01am

Who says you need “green” to get a green home?

According to an analysis by realtor.com®, eco-friendliness is becoming the norm—and being a green homeowner may not be as pricey as thought. While California’s costlier markets have high concentrations of green homes, there are also affordable pockets outside the Golden State—and, in many markets, eco-features are no longer at a premium.

The greenest:

  1. Fort Collins, Colo.
    Green Home Listings Share: 36 percent
    Local Median Price-Per-Square Foot (PPSF): $170.4
    Green Local Median PPSF: $171
  1. Dallas-Fort Worth-Arlington, Texas
    Green Home Listings Share: 35 percent
    Local Median Price-Per-Square Foot (PPSF): $139.1
    Green Local Median PPSF: $144
  1. San Jose-Sunnyvale-Santa Clara, Calif.
    Green Home Listings Share: 35 percent
    Local Median Price-Per-Square Foot (PPSF): $738.9
    Green Local Median PPSF: $701
  1. San Antonio-New Braunfels, Texas
    Green Home Listings Share: 34 percent
    Local Median Price-Per-Square Foot (PPSF): $128.8
    Green Local Median PPSF: $130
  1. Tulsa, Okla.
    Green Home Listings Share: 33 percent
    Local Median Price-Per-Square Foot (PPSF): $96.7
    Green Local Median PPSF: $115
  1. Boulder, Colo.
    Green Home Listings Share: 25 percent
    Local Median Price-Per-Square Foot (PPSF): $257.7
    Green Local Median PPSF: $267
  1. Salinas, Calif.
    Green Home Listings Share: 21 percent
    Local Median Price-Per-Square Foot (PPSF): $498.5
    Green Local Median PPSF: $429
  1. Atlanta-Sandy Springs-Roswell, Ga.
    Green Home Listings Share: 20 percent
    Local Median Price-Per-Square Foot (PPSF): $121.5
    Green Local Median PPSF: $132
  1. McAllen-Edinburg-Mission, Texas
    Green Home Listings Share: 19 percent
    Local Median Price-Per-Square Foot (PPSF): $93.2
    Green Local Median PPSF: $107
  1. Santa Cruz-Watsonville, Calif.
    Green Home Listings Share: 17 percent
    Local Median Price-Per-Square Foot (PPSF): $565.7
    Green Local Median PPSF: $544

“Although Southern and Western states still lead the way in green technology adoption, eco-friendly features have grown in popularity across many regions of the United States,” says Javier Vivas, director of Economic Research at realtor.com. “Many buyers have come to expect standard features, and homes integrating specialty green features are becoming more mainstream.

“However, in today’s inventory-starved market, location still reigns supreme and the price of land can easily override the allure of special eco-friendly features,” Vivas says.

Analysts defined a “green” home as one with bamboo flooring, dual-pane windows, ENERGY STAR appliances and/or rating, Seasonal Energy Efficiency Ratio (SEER) ventilation and/or solar panels.

For more information, please visit www.realtor.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

New Data Finds Homeowners Struggle When Selling, Despite Hot Market

April 19, 2018 - 4:01pm

Twelve days before Thanksgiving, Mark and Sue Meaney decided to put their 109-year-old house on the market. They looked at comps of similar-sized homes near their St. Paul neighborhood, agreed on a price with their agent and waited anxiously for their first offer to roll in.

Mark and Sue knew their timing wasn’t ideal. The holidays loomed, and the market was slowing; worse, St. Paul was entering its notorious subzero season.

The couple felt torn. After one year of searching for a new home, they had found the perfect place a few miles away. It was spacious enough to raise their kids and had a first-floor bedroom and bathroom for Sue’s aging parents.

As first-time sellers—Mark and Sue had lived in the house for 20 years—the couple took a leap of faith. They bought the new home, moved in Sue’s parents and dropped nearly $20,000 to spruce up their old house to help it sell quickly.

Several weeks later, their vacant home remains for sale, its exterior weathering the forces of yet another Minnesota winter.

Selling a Home: Truth in Data
Skim any number of news articles on the U.S. housing market and chances are you’ll run across the phrases “low inventory,” “sellers’ market” and “strong demand.” This rings especially true in larger metropolitan areas, where stories of bidding wars abound, leaving the impression that sellers in these markets simply list their homes, sit back and receive offers above the asking price.

For much of the U.S., however, the data reveals a starker reality.

According to new findings from Zillow Group—which used data from the Zillow Group Consumer Housing Trends Report 2017—selling a home in the U.S. is not only fraught with anxiety, but often culminates in unmet expectations.

In fact, close to one-third of sellers said they felt unsatisfied with the selling process. Of first-time sellers, nearly 30 percent were unprepared for how long it took to sell their homes and said they wished they would have started the process sooner, according to the analysis.

Furthermore, 76 percent of sellers across the U.S. ended up making at least one concession, with lowering the price the most-cited compromise. Thirty-six percent said they either struggled to sell their homes within their desired price range or time frame.

“This data shows there is a huge opportunity to create a better end-to-end experience for sellers and help them turn over their homes faster,” said Jeremy Wacksman, chief marketing officer at Zillow Group.

More Information, More Stress
Much of the stress sellers feel stems from that nail-biting wait to get the right offer. Fueling this collective anxiety is, of course, more access to information.

While the internet has greatly democratized the buying and selling process, it has also created a state of seller vigilance. Sellers are more involved than ever in the sale of their homes—and more stressed out.

Take Mark, for instance. He’s constantly monitoring how many views his house gets on Zillow and how it ranks compared to other homes coming on the market. Despite working with an agent, Mark is immersed—and stressed.

While Zillow’s findings show that 82 percent of sellers valued having an agent guide them through the process, America has entered a new era of how deeply involved homeowners are in selling their most expensive investment, Wacksman said.

Sonia Krishnan is a senior writer at Zillow Group. This article was originally published on the Premier Agent Resource Center on Feb. 16, 2018. See the full story here.

For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Weighing Risk and Reward: Crypto-Investing in Home Equity

April 16, 2018 - 4:50pm

For homeowners that are looking to access home equity funds, but don’t want to take out a second loan, a home equity line of credit (HELOC) or a reverse mortgage, there are not many options; however, blockchain technology is looking to change that by offering investment opportunities that are tied to a home’s equity and rising values.

Quantm Real Estate (QuantmRE) is a membership-based real estate investment network built on blockchain technology. It allows the primary issuance and secondary trading of investment tokens backed by fractional equity interests in single-family homes. This means that QuantmRE invests in a fraction of the home by paying the homeowner a pre-determined amount of money (USD) to later benefit from rising home values when the homeowner decides to sell.

Any funds gained are used by QuantmRE to continue investing in single family homes—of which the portion purchased goes into a pool of other equity from other homeowners. The company also invests in non-homeowner occupied single-family homes that are held as investment properties.

“Having to borrow from a bank simply to access the wealth that you have built up in your home is deeply unsatisfactory,” said Matthew Sullivan, CEO and founder of QuantmRE, in a statement. “Our ability to digitize the value of a homeowner’s equity and realize the locked-up value will solve a huge problem for homeowners worldwide. It’s time for people to be able to access more affordable homeownership options, flexibility and less financial risk.”

Although the company makes a consistent effort to stay away from the term loan—because the process lacks monthly payments and interest charges—it is, in fact, a type of loan that needs to be paid back. The company does not charge interest, but homeowners are required to pay more than the original sum provided as QuantmRE becomes a partner with the owner of the property and is entitled to a fraction of home value gains—a lien is placed on the property to make sure of that.

So, what’s in it for homeowners? At the moment, fast cash without having to worry about monthly payments and a small chance to profit should the property values dramatically increase from the time of investment. Of course, QuantmRE funds are on the line if the property doesn’t appreciate or goes down in value; but if it does, homeowners will typically receive less for the sale of their property than if they had not engaged in a shared equity contract in the first place.

The question is, do these blockchain investment companies make out better than the homeowners? That may be the case. QuantmRE will typically make its initial investment amount back, and has the chance to profit from home value appreciation. Homeowners, on the other hand, are automatically in debt—a term QuantmRE chooses to refuse—and are then on the line for an even larger balance should their home’s value rise.

The pros? Risk of volatility is reduced, as the tokens deal with only real estate assets instead of other less reliable crypto-investments. When it comes to home improvements, QuantmRE is not entitled to a fraction of the property value gains earned from these updates. Homeowners can also pay QuantmRE before the sale of their home; however, the company may add provisions to ensure they don’t take a loss in the case of unfavorable market conditions. Although QuantmRE’s website states that tax consequences are not known until a future date, homeowners should speak to their tax advisors to confirm before participating.

As with most investments, profitability is determined on a case-by-case basis. While this is a chance for homeowners to participate in a blockchain-based investment, they should consult a financial advisor to determine if this is the right choice for them or if traditional equity-funded loans make more financial sense.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Prepaid Property Tax Debate Undecided

April 12, 2018 - 4:02pm

Just a few days shy from the 2018 tax deadline on April 17, and controversy surrounding the new tax law—the Tax Cuts and Jobs Act—is leaving multitudes of homeowners uncertain about whether they should claim their prepaid property tax deductions. The new law imposes a $10,000 cap on state and local tax write-offs (previously unlimited) for both single filers and married couples, leaving tax consultants and taxpayers searching for ways to make the most of the decreased cap before it takes effect in next year’s filing.

Interpretation of the new law has been varied. The ruling clearly states that state and local income taxes are not eligible for prepayment. With no mention of property taxes, many homeowners rushed to prepay in December; however, on December 27, the IRS released a statement, clarifying that prepaid taxes are only deductible under certain circumstances—homeowners cannot deduct the prepayment for property taxes that have not been assessed prior to 2018.

The IRS provided the following examples:

“Assume County A assesses property tax on July 1, 2017 for the period July 1, 2017-June 30, 2018. On July 31, 2017, County A sends notices to residents notifying them of the assessment and billing the property tax in two installments with the first installment due Sept. 30, 2017 and the second installment due Jan. 31, 2018. Assuming taxpayer has paid the first installment in 2017, the taxpayer may choose to pay the second installment on Dec. 31, 2017 and may claim a deduction for this prepayment on the taxpayer’s 2017 return.”

“County B also assesses and bills its residents for property taxes on July 1, 2017, for the period July 1, 2017-June 30, 2018. County B intends to make the usual assessment in July 2018 for the period July 1, 2018-June 30, 2019; however, because county residents wish to prepay their 2018-2019 property taxes in 2017, County B has revised its computer systems to accept prepayment of property taxes for the 2018-2019 property tax year. Taxpayers who prepay their 2018-2019 property taxes in 2017 will not be allowed to deduct the prepayment on their federal tax returns because the county will not assess the property tax for the 2018-2019 tax year until July 1, 2018.”

Not all tax experts agree, and several members of the Ways & Means Committee are petitioning the IRS for higher deductions of reasonable estimates, according to the Wall Street Journal. The issue has not been resolved across the board, but with a low audit risk due to limitations on IRS resources, some taxpayers are urging their tax preparers to claim the deduction without disclosing the write-off on the required IRS form (8275).

“There is no reason to believe that Congress made a mistake in omitting property tax prepayments, and there was certainly no basis for the IRS to substitute its own policy judgements that departs from the act of Congress, especially when the consequence of the IRS’s determination may have cost taxpayers millions of dollars,” states the Ways & Means Committee letter.

Stay tuned to RISMedia for more developments.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

With Fast-Growing Prices, Gains in Equity Are Exceeding Minimum Wage

April 10, 2018 - 4:16pm

For many Americans, homeownership is a vehicle for wealth—an appreciating asset that, more often than not, earns a profit at resale.

In the market today, homeowners are all but promised to reap the rewards. According to an analysis recently released by Zillow, appreciation is so healthy that homes in many markets are producing more than a job for minimum wage would. Although the average homeowner is earning $7.09 in equity for every hour spent at work—16 cents less than the federal minimum wage—homeowners in half of the 50 largest markets are earning more in equity than their local minimum wage. The analysis assumed eight-hour days, or 2,087 hours of work per year.

“As home values continue to rise at a rapid clip, many homeowners have earned more in home equity over the past year than they would have by working a minimum wage job—and in some areas, more than they’d have earned even if they had a job paying a six-figure annual salary,” says Aaron Terrazas, senior economist at Zillow.

The areas earning the most are on the West Coast: San Francisco, San Jose and Seattle. In San Francisco, appreciation has been $60.13 per hour worked; in San Jose, $99.81; and in Seattle, $54.24.

In the 25 largest markets:

“Equity ‘earnings’ are a lot different than the salary typically taken home on the first and fifteenth of each month; it is not money that accumulates directly into a checking account or that can be spent on daily needs,” Terrazas says. “Equity is only available once a homeowner chooses to sell a home, and even then is often subject to various taxes and other expenses. Still, particularly for homeowners that have already or are very close to paying off a mortgage, this supplemental ‘income’—especially if allowed to accumulate over several years—can essentially serve as a kind of second job that pays directly to a homeowner’s bottom line, without nearly as much actual work involved in collecting it.”

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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Categories: Real Estate

Consumer Confidence Retracts

April 7, 2018 - 12:00am

Consumer confidence retracted in March, posting a 127.7 reading in the latest Consumer Confidence Index® from The Conference Board. February’s reading was 130.

The Expectations reading of the Index, which gauges how consumers feel about their business, employment and income prospects six months out, fell to 106.2; in addition, the Present Situation reading, which gauges how consumers feel about conditions currently, fell to 159.9.

“Consumer confidence declined moderately in March after reaching an 18-year high in February,” said Lynn Franco, director of Economic Indicators at The Conference Board, in a statement. “Consumers’ assessment of current conditions declined slightly, with business conditions the primary reason for the moderation. Consumers’ short-term expectations also declined, including their outlook for the stock market, but overall expectations remain quite favorable. Despite the modest retreat in confidence, Index levels remain historically high and suggest further strong growth in the months ahead.”

Source: The Conference Board

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Categories: Real Estate

5 Things a Federal Reserve Interest Rate Hike Means for Your Wallet

April 5, 2018 - 3:37pm

(TNS)—Consumers tend to pay far more attention to the swings in their March Madness brackets than the latest moves by the Federal Reserve. The reality is the Fed’s action will have a more lasting impact on your wallet.

The Fed moved to raise rates by 25 basis points, as expected. The Fed’s benchmark interest rate increases to 1.5 percent to 1.75 percent.

“Job gains have been strong in recent months, and the unemployment rate has stayed low,” the Fed said in its statement. “Recent data suggest that growth rates of household spending and business fixed investment have moderated from their strong fourth-quarter readings.”

Going forward, consumers will continue to see an uptick in the cost of borrowing on everything from credit cards to car loans to mortgages.

This is the first rate hike of 2018 but it’s not the last, according to economists. Another two or three rate hikes are anticipated for this year, according to Robert Dye, chief economist for Comerica Bank.

“Higher interest rates are negatives for most households,” Dye says.

The U.S. economy has much going for it on the upside—strong job growth, rising home values, some wage growth and higher consumer confidence, and a federal tax cut that is putting more money in many wallets.

“I think the positives will outweigh the negatives this year and we will see a strong year for non-auto consumer spending,” Dye says.

Here are some things to pay attention to now in a rising-rate world:

  1. Budgets, unlike college basketball brackets, aren’t likely to be busted.
    The theory is that the Fed has room to raise rates because the job market is so strong. As wages rise, consumers may not be under so much pressure to borrow or they’d be able to afford slightly higher rates.

Rates are expected to climb gradually, so consumers still have time to refinance or borrow earlier in the year to avoid higher rates later on down the road.

Mark Zandi, chief economist for Moody’s Analytics, says his expectation is that mortgage rates and car loan rates will be up by at least a half a percentage point a year from now. For savers, new CD rates are expected to be about a quarter percentage point higher a year from now.

“The economy is set to boom,” Zandi wrote in a report this week. “Growth is already strong—well above the economy’s potential—and will soon accelerate. A massive dose of fiscal stimulus measures, including both deficit-financed tax cuts and federal government spending increases, has just begun to hit the economy.”

  1. Consumers aren’t stressing out.
    Policy wonks and bankers keep a close eye on all things Fed, but a recent NerdWallet survey indicated that 62 percent of respondents claimed that they didn’t know the Fed raised rates last year. The Harris Poll on behalf of NerdWallet surveyed 2,000 U.S. adults ages 18 and older.

As of the last hike, the Federal Reserve will have raised rates six times since December 2015. The Fed raised rates three times in 2017, once in 2016 and once in 2015.

  1. Borrowing costs aren’t sky-high.
    Mortgage rates rose for a good part of 2018 on strong jobs reports. The average 30-year fixed rate has gone up to 4.54 percent from 4.15 percent in early January, according to Bankrate.com.

“Borrowing costs are still relatively low, but moving higher and that’s why consumers need to get out of variable-rate debt and lock in fixed rates to insulate themselves from further increases,” says Greg McBride, chief financial analyst for Bankrate.com.

McBride says he’s expecting mortgage rates to remain around 4.54 percent by year-end, but he’s expecting plenty of volatility. At some point, mortgage rates could drop significantly if geopolitical issues arise or the U.S. economy slows down.

As for other rates, McBride says he’d expect the average five-year car loan rate to be 4.85 percent by year-end, up from 4.46 percent now.

Consumers aren’t seeing anything close to the average 8 percent for a car loan consumers faced in January 2006, according to Jessica Caldwell, executive director of industry analysis for Edmunds.com.

Savers are likely to see higher rates, too. McBride expects the average rate on a one-year CD to be 0.7 percent by year-end, up from 0.49 percent now. The average rate on a five-year CD is expected to be 1.5 percent by year-end, up from 1.10 percent now.

  1. Ignoring the trend toward higher rates won’t help.
    As rates edge higher, savvy consumers will want to take extra care to shop around for loans and CDs.

Making sure to pay bills on time—and not get overburdened with debt—will help keep credit scores higher and borrowing rates lower for individuals.

The average rate for credit cards is the highest ever, at 16.84 percent—and those rates would edge even higher once the prime rate goes up, according to McBride.

“But consumers with good credit can still get 0 percent offers for purchases and balance transfers that last as long as 15 months,” McBride says.

The key, of course, involves maintaining a strong credit score.

Charlie Chesbrough, senior economist for Cox Automotive, notes that rates on car loans are near five-year highs, but rates remain relatively affordable, particularly for those with good credit.

“Higher lending costs impact car buyers in different ways,” Chesbrough says. “For customers with good credit, the monthly payment on a $35,000 five-year car loan will rise about $15 a month from a 1 percent interest rate increase.”

Consumers with lower credit scores are seeing much bigger rate hikes on the car loans they’re taking out.

“Assuming a continuation of credit tightening, subprime borrowers will see much larger cost differences,” Chesbrough says.

  1. Consumers can control some borrowing costs.
    Most credit cards have variable rates and the interest rate goes up every time the Fed raises rates. Most home equity lines of credit have a variable interest rate that’s tied to the prime rate. The prime rate goes up when the Fed raises short-term rates.

“Variable-rate debt, such as credit cards and home equity lines of credit, will only cost more as interest rates rise,” McBride says. “Transfer balances to low-rate cards, refinance into a fixed-rate home equity loan, or just pay down the debt aggressively—but do it now.”

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