Here’s How Much Mortgage Rates Must Fall to Make Housing Affordable for Buyers
14 minutes ago
Some housing markets are so expensive that they would still be unaffordable even if rates plummeted. In other areas, a small decline in rates would be enough to make homeownership possible for many buyers.
A 2025 Zillow report found that mortgage rates nationwide would need to fall more than. 4% to make the typical home affordable for a median-income family. Currently, the average mortgage rate on a 30-year, fixed-interest loan is around 6.18%.
The study assumed a 20% down payment and defined affordability as a monthly mortgage payment of less than 30% of the median household income. New York, Los Angeles, and Miami are examples of big cities with rising home values that wouldn’t be affordable even with a 0% mortgage rate. New York’s average home value is over $800,000, while in Los Angeles it’s just shy of $1 million.
Housing affordability has been a stubborn issue for younger adults in the 2020s.
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Boston and Seattle are also pricey, and borrowing costs would have to fall to below 1% to achieve affordability. Dallas, New Orleans, and Nashville would have to see rates drop by more than two percentage points in order for housing to be affordable there.
Other areas of the U.S. have lower prices, meaning that housing would still be affordable even if rates climbed above 6.7%, Zillow said.
Read the full article here.
–Terry Lane
High School Seniors Enter a New Student Loan Era in 2026
40 minutes ago
High school seniors planning to attend college in the fall of 2026 will face a significantly different landscape when it comes to federal student loans, compared to previous years.
‘The One Big Beautiful Bill’ made many changes to student loans, most of which will take effect on July 1, 2026. Some of these updates will affect existing borrowers, but the majority of the changes will affect current college students and high school seniors preparing for college.
Lending limits for subsidized and unsubsidized loans that are taken out by undergraduate students will remain the same. However, parents or grandparents who want to help their student pay for college with a Parent PLUS loan will be subject to new loan limits.
Investopedia / Photo Composite by Elizabeth Guevara / Getty Images
Currently, Parent PLUS loans allow parents and grandparents to borrow up to the student’s cost of attendance, minus any financial aid they receive. There is currently no aggregate limit on the total dollar amount of Parent PLUS loans that can be taken out for a student’s education.
However, families of high school seniors entering college in the fall 2026 semester can only borrow up to $20,000 a year, and will have an aggregate limit of $65,000 per child.
Read the full article here.
–Elizabeth Guevara
Federal Loan Access for Graduate Students Is Shrinking. These Are Alternative Financing Options
1 hr 9 min ago
Starting with the 2026-2027 school year, graduate students will no longer have access to a key federal loan program to help them pay for their education, and many will need to find other options to finance their graduate degrees.
The “One Big, Beautiful Bill” has reduced the amount of loans students and their families have access to for all kinds of education costs.
Many graduate students will be affected, since the legislation eliminates their ability to take out Grad PLUS loans. In the 2024-25 award year, about 545,000 graduate students had a PLUS loan.
The “One Big, Beautiful Bill” will make it harder for some graduate students to take out federal loans.
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Students who have taken out a Grad PLUS loan before July 1, 2026, can still borrow PLUS loans for up to three more years, or until their program ends.
Additionally, starting in the 2026-27 academic year, non-professional graduate students will be limited to borrowing up to $100,000. Professional graduate students, including those studying medicine and law, can borrow a maximum of $200,000 in unsubsidized loans throughout their educational career.
Read the full article here.
–Elizabeth Guevara
More Employees Are Accessing Their Retirement Savings—Here’s Why It Matters
1 hr 35 min ago
It is becoming increasingly difficult for many Americans to accumulate sufficient savings, and many struggle to afford emergency expenses, especially as the costs for things like home repairs and hospital stays increase faster than inflation.
Workers are having to find alternative ways to afford these unexpected costs, such as taking out loans or reducing their retirement savings. At the end of 2024, about 5% of employees had taken a hardship withdrawal from their retirement savings account, compared with the 2% of employees who did this in 2018, according to Fidelity Investments data.
All withdrawals from a traditional individual retirement account (IRA) or a 401(k) are subject to standard income taxes. If a withdrawal is made before the age of 59½, a 10% penalty tax is levied on the amount distributed. However, if an early withdrawal is made based on a hardship, defined as “an immediate and heavy financial need,” the money taken out is not subject to the additional tax.
As higher costs strain household budgets, many are turning to their 401(k)s to cover emergencies.
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With inflation remaining high in 2025, it has become increasingly difficult for Americans to set aside money for an emergency savings account. In 2024, 13% of adults reported that they would be unable to pay a $400 emergency expense by any means, and 37% said they would cover the expense by borrowing money or selling something, according to the Federal Reserve’s most recent report on the economic well-being of U.S. households.
Read the full article here.
–Elizabeth Guevara
Trump Promises ‘Aggressive’ Housing Reforms in 2026. Here’s What We Know So Far
2 hr 13 min ago
The housing market has been plagued by high costs and limited supply. Are reforms on the way?
That’s what President Donald Trump promised in a Dec. 17 address. What precisely those reforms could entail remains uncertain, though Trump could use 2026 to move forward with proposals he’s touted since taking office.
“Mortgage payments will be coming down even further,” Trump said. “Early in the new year you will see this. I will announce some of the most aggressive housing reform plans in American history.”
President Trump has said housing-market reforms are on the way.
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Some officials in government and the housing industry have said that the federal government needs to take action on issues that are driving housing costs higher.
Elevated mortgage rates that have been stuck at over 6% for more than three years have made borrowing more difficult for homebuyers. A shortage of homes for sale has also helped keep prices elevated.
Read the full article here.
–Terry Lane
Stock Futures Rise to Begin 2026
2 hr 41 min ago
Futures contracts associated with the Dow Jones Industrial Average pointed 0.4% higher.
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S&P 500 futures rose 0.6%.
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Nasdaq 100 futures advanced 1%.
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