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Average U.S. Mortgage Size Hits Record-High $354,500

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The average size of mortgages U.S. consumers were looking to obtain to buy a home or to refinance one hit a record high of $354,500 last week, suggesting resilience in the higher end of the housing market, the Mortgage Bankers Association said on Wednesday. Reuters reports:

On the other hand, the rise hints that first-time buyers face a challenge in finding their home of choice heading into spring, which is typically the busiest time of the year for home sales, the Washington-based industry group said…

The average interest rate on 30-year fixed-rate mortgages with conforming loan balances of $484,350 or less decreased to 4.64 percent from 4.67 percent.
Most other fixed mortgage rates that the MBA tracks fell by 0.05 to 0.06 percentage point last week.

However, interest rates on 30-year “jumbo” mortgages with loan balances greater than $484,350 averaged 4.45 percent, up from 4.41 percent the week before.

What’s the Recommended Temperature for Vacant Home in Winter?

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Whenever you will be away from home for an extended period of time, you should adjust the temperature to save money. During the winter months you want to minimize the heating cost while at the same time preventing water pipes from bursting and avoiding any damage to household appliances. Don’t worry! I will go over what you should do before you leave the house and what temperature you should set the house at while you are away.

 1. What’s the Recommended Temperature for Vacant Home in Winter?

Each house is different and the optimal thermostat setting depends on the level of insulation in the house, pipe layout, exterior temperature, and location. You should set the temperature around 50 to 60 degrees Fahrenheit (℉).

Most of the time, dropping the thermostat to 50 °F to save some heating bill is fine. You don’t need to set your thermostat too high if your plumbing runs within the interior walls. You should have no issues by leaving the thermostat at 50 °F.

If you have pipes in exterior walls you want to set the thermostat higher, such as 55 ℉ or 60 ℉, to warm the house enough that the pipes in the wall are above freezing. Also, if you live in a humid climate, setting the thermostat at a higher temperature to avoid getting musty as the furnace heats the air and lowers the relative humidity. Also, If you live in expose area then set it on the high side around 55 ℉ or higher to keep pipes from freezing.

2. What’s the Lowest Temperature to Set the Thermostat in Winter?

You should not set it lower than 40 ℉ when you leave a vacant house. The temperatures for the whole house are not homogenous as some parts of the house will be even colder than the lowest temperature setting on the thermostat. The money saved on lowering the thermostat further would be minimal compared to the damage if something happens.

Even though the recommended temperature setting is around 50 ℉ to 60 ℉, you can go lower to 45 ℉ and everything should be fine if your property is winterized properly. The goal is to minimize the heating bills but at the same time you don’t want any burst pipes or a flooded house when you arrive home. Please keep in mind that at a lower temperature setting, you have a higher risk of pipe freezing and material shrinkage. There’s a big difference between homes that are left at 55 ℉ and those left at 45 ℉ after years of leaving the house vacant.

3. What Temperature Should You Set the Thermostat in Summer?

Working in reverse for hot weather, you should set your thermostat higher while you are on summer vacation to save money on electricity bill. According to the Department of Energy, for every degree you raise the set temperature of your central air, you’ll save about three percent on your utility bill.

The optimum setting for your air conditioner is 4 ℉ or 5 ℉ higher than what you normally set at. So, if you normally set your house at 72 ℉, crank it up to 77 ℉ or 78 ℉ before you leave the house. Also, don’t forget to check your air conditioner filter and close the blinds before leaving your house.

Setting the thermostat too high might not save you any extra money as the air conditioner works harder to cool the house’s temperature back down. Beware of leaving your house too warm if you decide to shut off the air conditioner completely. You could damage wall structure and household items if the inside is too hot and humid. Set your thermostat higher by 4 ℉ or 5 ℉ is better than full shutdown. For through-the-wall air conditioner, you can safely shut it down when you are away.

4. What To Do Before You Leave The House?

First, if you are leaving a house for a couple months in the winter you should turn off the water. Then open the faucets to drain every plumbing you can. Depending on how long you will be away, turning off the main water supply line where it comes into the house is highly recommended.

Pipes with water in them have a high risk of busting during a long cold spell. By draining all the water lines and turning off the water, if the pipes freeze while the furnace dies it’s not the end of the world. Any sections of pipe that happened to be drained won’t be damaged, and you won’t have to tear the walls containing them apart to fix the damage. Nobody wants to come home after a vacation to a foot of water in the basement as well as numerous ruptures in pipes within the walls.

If you are away for a short period of time and don’t want to shut off the main water, then set the faucet for water to slightly drip out, especially with pipes on an exterior wall exposed to cold weather. Running water through the pipe – even at a trickle – helps prevent pipes from freezing.

In addition, keep the cabinet doors under the sinks open to prevent cold pockets from forming. Air circulates from the outside room temperature will keep the pipes below the sinks from freezing while you are away.

Don’t forget the water heater. You probably don’t want to drain the water heater, but it’s a good idea to turn it off if it’s electric or to shut off the gas supply. If a pipe bursts or water leaks out, an electric water heater could overheat and short out the heating elements, and a gas heater could do even worse. If you don’t want to turn off the water heater, make sure to turn it to low or vacation mode.

Phone Scammer Gets 6 Years in Prison After He Made the Mistake of Calling William Webster, Ex-FBI and CIA Director

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The Washington Post reports about phone scammer Keniel A. Thomas, who made the mistake of calling William H. Webster. Thomas told 90-year-old Webster that he had won $72 million and a new Mercedes Benz in the Mega Millions lottery, but that he needed to send $50,000 in taxes and fees to get his money. Instead of sending $50,000 to the random caller, Webster performed reverse phone sting for FBI.

Thomas also told Webster he’d done his research on the top winner. “You’re a great man,” the scammer cajoled. “You was a judge, you was an attorney, you was a basketball player, you were in the U.S. Navy, homeland security. I know everything about you. I even seen your photograph, and I seen your precious wife.”

Thomas’s research didn’t turn up everything. He didn’t learn that the man he was calling was the former director of the FBI and the CIA, the only person ever to hold both jobs. And he didn’t know that Webster would call him back the next day with the FBI listening in.Thomas was arrested in late 2017, after he landed in New York on a flight from Jamaica. He pleaded guilty in October and faced a prison term of 33 to 41 months under federal sentencing guidelines. But with Webster and his wife in the courtroom, Chief U.S. District Judge Beryl Howell on Friday added another 2 years to Thomas’s sentence, giving him nearly six years to serve. Howell said that the scam qualified as “organized criminal activity” and that Thomas posed “a threat to a family member of the victim.”

Most Americans Just One Serious Illness Away From Bankruptcy

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A study of bankruptcy filings in the United States showed that medical expenses contribute to two-thirds of bankruptcy filings in U.S. For many Americans, putting one’s health first can mean putting one’s financial status at risk. Study Finds described:

The study, led by Dr. David Himmelstein, Distinguished Professor at the City University of New York’s (CUNY) Hunter College and Lecturer at Harvard Medical School, indicates that about 530,000 families each year are financially ruined by medical bills and sicknesses. It’s the first research of its kind to link medical expenses and bankruptcy since the passage of the Affordable Care Act (ACA) in 2010.

“Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” Himmelstein says in a release by the Physicians for a National Health Program. “For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments and deductibles that illness can put you in the poorhouse.”

World’s 26 Richest Own As Much As Poorest Half of Humanity

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In an annual wealth check released to mark the start of the World Economic Forum in Davos, the development charity Oxfam said 2018 had been a year in which the rich had grown richer and the poor poorer. As a result, the report concluded, the number of billionaires owning as much wealth as half the world’s population fell from 43 in 2017 to 26 last year. The Guardian reports:

Oxfam said the wealth of more than 2,200 billionaires across the globe had increased by $900bn in 2018 – or $2.5bn a day. The 12% increase in the wealth of the very richest contrasted with a fall of 11% in the wealth of the poorest half of the world’s population …

Among the findings of the report were:

* In the 10 years since the financial crisis, the number of billionaires has nearly doubled.

* Between 2017 and 2018 a new billionaire was created every two days.
The world’s richest man, Jeff Bezos, the owner of Amazon, saw his fortune increase to $112bn. Just 1% of his fortune is equivalent to the whole health budget for Ethiopia, a country of 105 million people.

The Truth About Becoming an American Millionaire

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The American dream is alive and well, and Americans who aspire to build wealth and become rich may be surprised to know they don’t need a flashy job. or come from an affluent family to build a fortune. The truth is, eight out of 10 millionaires reach that milestone through their company’s 401(k) plan, according to the National Study of Millionaires by Ramsey Solutions. Additionally they are hitting it years before the traditional retirement age. Julia Limitone writes on Fox Business:

“Typically they are hitting it around 25 to 28 years, so right before age 50,” said Chris Hogan of Ramsay Solutions to FOX Business’ Maria Bartiromo. on Tuesday. “So that shows using the 401(k) and 403(b) and IRAs puts people on the path to build wealth over time.”

What’s more, it’s not the glamorous jobs like being a professional athlete or entertainer that are raking in the dough. Rounding out the top five professions were engineers, accountants, teachers, managers and attorneys, Hogan said.

Hogan also offered tips for the pursuit of millionaire status. In his opinion, one of the biggest mistakes made is not understanding the threat associated with debt.

“Any time you have debt in your life, you’re paying interest and so that’s preventing you from growing your money,” he said.

Jack Bogle, Founder of Vanguard Group and Creator of the Index Fund, Dies at Age 89

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Jack Bogle, who founded Vanguard Group, an investing juggernaut now with more than $5.1 trillion in assets under management, and created the world’s first index mutual fund, has died. He was 89. CNBC reports:

Bogle passed away on Wednesday in Bryn Mawr, Pennsylvania, according to a statement from Vanguard.

Bogle, who preached buy and hold investing, was considered one of the world’s greatest investors. His index mutual fund enabled investors to achieve high returns but at lower costs than for actively managed funds.

He founded Vanguard, the world’s largest mutual fund organization, in 1975, and later served as chairman and CEO until 1996. Vanguard now manages assets from more than 20 million investors in about 170 countries.

The US Middle Class is Disappearing…Into the Upper Middle Class

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Yes, the America middle class is disappearing. 38% of US families were middle class in 1979 vs. 32% in 2014. But where did that 7% (6.8 percentage points to be exact) go? James Pethokoukis writes on American Enterprise Institute:

“Well, of the five income groups (poor, lower middle class, middle class, upper middle class, and rich) displayed, the bottom three got smaller, the top two bigger. The poor shrank by 4.5 percentage points, the lower middle class by 6.8, the middle class also by 6.8% But the upper middle class got a lot bigger, expanding by 16.4 points, and the rich by 1.8 points.”

Here is how upper middle class is defined, using research from economist Stephen Rose of the Urban Institute:

“Using Census Bureau data available through 2014, [Rose] defines the upper middle class as any household earning $100,000 to $350,000 for a family of three: at least double the U.S. median household income and about five times the poverty level. At the same time, they are quite distinct from the richest households. Instead of inheritors of dynastic wealth or the chief executives of large companies, they are likely middle-managers or professionals in business, law or medicine with bachelors and especially advanced degrees.”

How to Invest in Property and Look After the Planet

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If you’re looking to invest in property, saving the planet can be easier than you think. Choosing a sustainable development by a trusted property developer is a great way to make sure the housing of the future is eco-friendly. Consumers have considerable impact on the market and the number of both tenants and investors wanting a property that is better for the planet  is constantly on the rise. As there are more renters than ever before, more of them are looking for a landlord and a rental property that is eco-friendly, proving a lucrative new investment opportunity.

The environmental impact of a new building is high on developer’s agendas, and they take several steps to ensure the sustainability of a development. West Point Manchester, sold by RW Invest  is a great example of an eco-friendly property development, which offers environmentally friendly living as well as all of the modern amenities tenants expect. This new apartment building features innovative features and low carbon technology, with 100% energy efficient LED lights. Solar panels generate energy, as does an air source heat pump and a state of the art heat recovery ventilation system to reduce how much energy is wasted. There are a number of sustainable property developments available on the market, that are perfect for those looking for an eco-friendly property opportunity.

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Joy From Giving Lasts Much Longer Than Joy From Getting

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According to two new studies conducted by researchers with the University of Chicago and Northwestern University, giving to others rather than to ourselves makes us happier. Study Finds explains:

Have you ever noticed that your enjoyment in a repeated activity or event decreases over time no matter how wonderful it is? When this happens, you are experiencing what researchers call hedonic adaptation. The joy of having our own desires met is always fleeting. Perhaps surprisingly, however, giving to others creates a more lasting happiness.

“If you want to sustain happiness over time, past research tells us that we need to take a break from what we’re currently consuming and experience something new,” says study co-author Ed O’Brien, of the University of Chicago Booth School of Business, in a releasefrom the Association for Psychological Science. “Our research reveals that the kind of thing may matter more than assumed: Repeated giving, even in identical ways to identical others, may continue to feel relatively fresh and relatively pleasurable the more that we do it.”

Jeff Bezos Earns More In 30 Seconds Than The Average Worker Makes In A Year

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While millions of Americans no doubt enjoyed some degree of schadenfreude watching the correction in FAANG stocks wipe out nearly $1 trillion of value from the largest US tech firms: Mark Zuckerberg alone has lost nearly $100 billion of his personal wealth since the beginning of 2018, and Amazon CEO Jeff Bezos has lost as much as $13 billion or more in a single day. But that doesn’t change the fact that the world’s billionaires enjoyed their highest-earning year on record in 2017 as their wealth increased by a combined $9 trillion. ZeroHedge reports: 

Helped by the asset-friendly policies of the world’s largest central banks, the wealthiest 1% of the world now owns nearly half the wealth. The 54 billionaires living in the 54 UK alone have an aggregate $160 billion in wealth, equivalent to over 6% of Britain’s GDP. Meanwhile, the average worker earns about $37,000 a year. Virgin CEO Richard Branson earns that amount in roughly 25 minutes.

Even more galling, Facebook CEO earns the same sum every 60 seconds. Bezos earns the same sum every 28 seconds.

How Is Your Home Insurance Rate Calculated?

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Home insurance is one of those things that can just seem like an added monthly bill that is completely unnecessary but should there ever be a time when you require that insurance, it could quickly pay for itself many times over. No-one likes to think about emergency situations happening, damage to their home, and other issues that can require some rather costly repairs, but the reality is that life happens.

If you’ve decided it’s time to start looking into homeowners insurance and at least consider some basic coverage, then you are probably curious as to how your rate is determined. The amount you pay for home insurance is actually determined by a number of factors, some of which will be under your control whereas others won’t. Let’s take a closer look.

The Home Itself

Insurance Land, an insurance company located in Florida says the biggest factor in determining your insurance premium is the house itself. Any insurance company is going to look at such things as the type of structure, the size of the home, the age of the home, and even what kind of material has been used to build the home.
Insurance Land also points out that if you happen to have an older home, sometimes your rate can be higher, but that can depend on the building materials used. This is exactly why they offer free quotes, which can be done online so that you can get an idea of what your rate may be.

What is Your Claims History?

Another big determining factor is your claims history. Perhaps you have owned other houses in the past, and maybe you’ve had to make an insurance claim. That will remain in your history and can sometimes act as a red flag for an insurance company. At the very least it can push you into the higher premium category.

If you’ve had a number of claims in the past, it may not only mean you will pay more for insurance, but you could find it difficult to be insured at all.

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American Debt is Set to Hit $4 Trillion

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It’s only been five years since Americans hit a grand total of $3 trillion in consumer debt and yet, by the end of 2018, that figure is expected to jump by another trillion. CNBC reports:

In the first nine months of 2018, Americans had a cumulative $3.93 trillion in debt, excluding mortgages, with $1 trillion of that from credit cards and $2.93 trillion from other sources such as student loans and auto loans. With holiday shopping underway, Americans’ credit card bills are set to increase by at least 5 percent, according to mortgage site LendingTree. That $600 million or so in extra spending is likely to bring consumer debt to a new high of $4 trillion.

Still, LendingTree’s chief economist Tendayi Kapfidze says consumers shouldn’t worry. “It’s a big number, but it’s actually not that concerning, because of the income growth we’ve seen since the crisis,” Kapfidze tells CNBC Make It.

One reason he’s not too worried, Kapfidze says, is that the economy is more stable in 2018 than it was in 2008, and real estate values and consumer bank deposits have grown more than debt has. “Deposits have grown by $2.5 trillion more than consumer debt, and homeowners have nearly $10 trillion more in home equity than they did a decade ago,” he says.

Oil’s Plunge Propels Gas Prices Toward Lowest of This Year

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Americans are paying less to fill up their SUVs for a seventh week in a row as the price of gas slides toward yearly lows. CBS MoneyWatch reports:

Since hitting a four-year high near $77 a barrel at the beginning of last month, oil prices have plummeted about 30 percent, briefly sinking below $50 a barrel Thursday. The oil market has been in a slump amid rising stockpiles of U.S. crude and thoughts of slowing global growth and softer demand for the commodity.

The national average for a gallon of gas on Thursday came to $2.51, according to AAA. Drivers in Texas and Missouri were paying just above two bucks a gallon, and motorists paid more than $3.00 a gallon in fives states — California, Washington, Oregon, Nevada and Alaska, according to AAA.

The national average is likely to briefly dip into the $2.30s, but could range from $2.35 to $2.55 a gallon for the rest of the year, a scenario that could change with next week’s OPEC gathering, DeHaan said.

It remains to be seen whether Russia and Saudi Arabia can reach agreement on a cut in production at the upcoming G20 summit, and then whether any consensus holds into an OPEC meeting next week. Lower gas prices could also help keep a lid on inflation and lessen pressure on the Federal Reserve to hike interest rates, something President Trump has loudly advocated against.

Fed Says Millennials Are Just Like Their Parents. Only Poorer

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Millennials, long presumed to have less interest in the nonstop consumption of goods that underpins the American economy, might not be that different after all, a new study from the Federal Reserve says. Bloomberg reports:

“Their spending habits are a lot like the generations that came before them, they just have less money at this point in their lives, the Fed study found. The group born between 1981 and 1997 has fallen behind because many of them came of age during the financial crisis. ‘We find little evidence that millennial households have tastes and preference for consumption that are lower than those of earlier generations, once the effects of age, income, and a wide range of demographic characteristics are taken into account,’ wrote authors Christopher Kurz, Geng Li and Daniel J. Vine.”

“Their findings [PDF] are grounded in an analysis of spending, income, debt, net worth, and demographic factors among different generations. The conclusion that millennials aren’t all that different also holds for the researchers’ more granular examination of expenditures on cars, food, and housing. ‘It primarily is the differences in average age and then differences in average income that explain a large and important portion of the consumption wedge between millennials and other cohorts,’ they conclude. So much for the young folks favoring ‘experiences’ over tangible goods.”