Borrow Mortgages

This Week In Your Wallet: Mortgage Rates, Pay Scales & WFH Deductions

Jean Chatzky  |  March 22, 2022

Wages are growing. And there are new rules for earning more.

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Like many of the female readers of this newsletter, I’m sure, I hate having to mark Equal Pay Day each year – it hit last week, March 15 to be exact, for women overall, but won’t occur for Black women until August 23 and Latinas until October 21. Demoralizing dates all around. Perhaps that’s why the news that wages are now increasing for women faster than they are for men put a smile on my face. While it’s good to see them growing overall (after a decade and a half of wage stagnation), wages for women rose 4.4% year-over-year in February compared with 4.1% for men. Moreover, as The Wall Street Journal reports, this was the sixth month in a row that women’s gains led. 

Those of you who have tuned into Everyday Wealth, the radio show I’m co-hosting with Soledad O’Brien know that we spend a good chunk of time each week talking about improving your own personal economy. As in: There may not be anything you can do about the fact that interest rates might start going up by a half point at a time rather than the quarter that was anticipated, but you can still take steps to lower the interest rates that you, personally, are paying.  

And if 4% wage growth sounds anemic to you (as well it might with prices going up much faster than that), there’s something you can do about that, too. Think about changing jobs. Then, negotiate like this! According to research from the Conference Board, about 31% of women who changed jobs during COVID were rewarded with compensation (salary and bonus) more than 30% higher than they were earning previously. For men, the number was a none-too-shabby 28%.

And What To Do With All That Extra Money?

Well, if your interest is running high in crypto or NFTs – even if (especially if) you feel like you’re coming to the party belatedly – I can’t recommend this explainer by New York Times Technology columnist Kevin Roose highly enough – except to say that to call it an “explainer” seems woefully inadequate. It’s basically an ebook or one of the longest FAQs you’ve ever read. But it will answer all of your questions (from what it is, to what blockchains are and how they work, to whether it will replace the dollar, to what the environmental implications are). It also takes a 1,000-foot look at the impact of crypto on society. And then, once you’re through it, you can find the same sort of helpful Q&A approach to web3, DAOs and DeFi. I think it should be required reading, even if you never plan on buying the stuff. Kudos, Kevin.  

And How About If You Want To Buy A Home?

With mortgage rates tipping over the 4% mark, has the window for buyers closed? For first time homebuyers, the speed at which rates have climbed has put prices out of reach for many, Reuters Jo Constantz writes. But for those who have more capital at their disposal – including move-up buyers – the expectation is that prices may just continue to climb higher for at least a while. For what it’s worth, I just learned that the suburban NY home I sold just about a year ago is going back on the market. The neighbors are betting it will go for at least 10% more this time. That estimate may be low. Not only did one of the few homes in the neighborhood recently garner over 40 (40!) offers, “Zillow’s most recent model had home-price appreciation peaking at 22% in May,” Constantz writes. So, is this a bubble? The jury is out. But it’s frothy enough, CBS News reporter Aimee Picchi notes, that it’s brought back a staple of the bubble, the adjustable rate mortgage (ARM). Rule of thumb here for any of you considering it: Look at Hybrid ARMs – 5/1, 7/1 or 10/1. And try to match the first number (the 5, 7 or 10) with how long you expect to be in the house.

WFH? It’s Not As Deductible As You Think

Finally, if you’re knee-deep in taxes and wondering if the fact that your tax software (or accountant) is telling you that your home office – the same one you used exclusively for work during the pandemic – is not deductible, is a mistake, it isn’t. Under the 2017 Tax Cuts and Jobs Act, if you receive a W-2 (i.e. if you’re an employee) you can’t itemize deductions for business expenses. If you’re self-employed, an independent contractor, or a gig worker, on the other hand, have at it.

Have a great week!


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