Feature

First-time homebuyers priced out

And more of the week's best financial insight

Here are three of the week's top pieces of financial insight, gathered from around the web:

First-time homebuyers priced out

A home has never been this out of reach for first-time buyers, said Anna Bahney at CNN​. "First-time buyers made up just 26 percent of all homebuyers in the year ending June 2022," according to the National Association of Realtors, the lowest percentage in the survey's 41-year history. The pandemic led to a supersurge in home prices as workers fled urban dwellings. Mortgage rates then started rising rapidly last spring, heaping more costs on potential buyers. It was rare for any buyer to pay less than asking price, the NAR found, "with 28 percent of buyers" paying over the listed amount. The lack of affordable properties bumped the average age of a first-time buyer up to 36, another all-time high. 

Americans turn to credit cards

Consumers are reaching for their plastic again at pre-pandemic rates, said Sarah Hansen in Money. "After two years of extra savings and prudent credit card usage," card balances rose to $916 billion in September, according to Equifax. "The last time balances were this high was in December 2019." A little more than a year and a half ago, in April 2021, balances were almost $200 billion lower, "as consumers pulled back on spending in the early days of the crisis and government stimulus checks helped them pay down debt." Equifax's research leader said Americans' current spending rate remains "healthy," considering how prices have soared in recent months. But those now spending above their means could quickly face a spiraling situation: The average credit card interest rate was 18.4 percent in August.

Rising health insurance costs

Job-based health insurance premiums are expected to go up significantly next year, said Ann Carrns in The New York Times, after barely budging in 2021. Employers surveyed by human resource consultants estimated that their health-care costs will increase 6 percent on average next year, thanks partly to inflation and also to "a return by patients to pre-pandemic levels of doctor visits." This year, workers on average are paying $6,106, or about $509 per month, for health-care coverage. Despite the anticipated increase, most employers said they are hesitant to raise costs on employees given the tight labor market. In HR consultant WTW's survey of 455 employers, "just a quarter said they planned to shift costs to workers through higher premium contributions."

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

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