Home Sales Drop Again As Buyers Say No Thanks

To view this email as a web page, click here.

What's Happening Today

Have you wanted to buy a house recently, only to see the prices and the high mortgage rates and say, 'No thanks?' If you did, you aren't alone. Home sales fell for the ninth straight month as higher mortgage rates make buyers think twice before purchasing a house. According to the National Association of Realtors, home sales dropped 5.9% in October from the month before and are sitting 28.4% lower than this time last year.

As the Federal Reserve hiked interest rates to help curb inflation, which has remained stubbornly high, it's sent mortgage rates soaring. While the average interest rate on a 30-year fixed-rate loan recently eased to 6.61% according to Freddie Mac, rates had been sitting above or near 7% for the last several weeks.

Concerns about future rate hikes have kept investors nervous and markets jittery. Yesterday, policymakers from the Fed spoke about inflation and several struck a more hawkish tone (meaning, wanting to increase interest rates). This caused markets to fall on worries that perhaps, we could get another super-sized hike of 75 basis points at the Fed's next policy meeting in December.

But markets leveled out today, with strong earnings from major retailers including Gap and Ross Stores pointing to consumer resilience heading into the key holiday season, despite higher prices.

- Kristin

Editors' Picks

Fed Officials Crushed Investors' Hopes This Week (CNN Business)

Inflation and Unemployment Both Make You Miserable, but Maybe Not Equally (The Wall Street)

Improving Supply Chains May Help Cool Inflation (The Balance)

60% of Americans are Living Paycheck to Paycheck Heading into the Peak Shopping Season (CNBC)

Federal Holidays and How They Are Paid (The Balance)

How Much Money Do I Need for Retirement? (The Balance)

Is an HSA Another Retirement Plan? (The Balance)

Term of the Day

403(b) Plan

A 403(b) plan is a tax-sheltered annuity (TSA) plan. This type of plan is offered to employees of tax-exempt organizations, such as churches, nonprofit hospitals, and public schools or universities. Employers might offer these retirement savings plans as part of an employee's benefits package.

Employees can have their employers defer portions of their pay to these retirement accounts so that these earnings won't be subject to income tax until the money is later withdrawn. Employers can match employees' contributions.

The federal government provides fairly high 403(b) contribution limits. These numbers are increased most years to account for inflation. The total contributions to your 403(b) in 2022 (made by both you and your employer) can equal the lesser of $61,000 or 100% of your total compensation for your most recent year of employment with that employer.

Off the Charts

As the pandemic fades, businesses are having an easier time making and shipping things—and that could help ease today's overheating inflation.