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Friday, December 16, 2022 • B3
THE GARDEN ISLAND
Got House?
Julie Black, Principal Broker & Owner (808) 652-6174 with daughter Kela Caspillo, Realtor Sales Person (808) 652-6173 kauaidreams.com
Prepping to buy a home or invest in 2023? Elizabeth Ayoola NERDWALLET It has been quite the year. In 2022, we’ve lived through high inflation, stock market lows, housing market frenzies and ongoing Federal Reserve rate hikes. Although we don’t have a crystal ball to predict what will happen to the economy next year, we could use this year’s events as a guide: Things may continue to be rocky. If homeownership and investing are on your 2023 goals list, here are some questions to ask yourself before whipping out your spreadsheet, money apps or notebooks.
says Wright.
you might have to make some sacrifices, says Zaneilia Harris, a certified financial planner and president of Harris & Harris Wealth Management Group in Upper Marlboro, Maryland. “You need to evaluate what you are willing to give up in space in order to own property,” Harris says. “You may have to gradually get to where you want, as opposed to just going straight into a single-family house.” This could mean starting off with a condo or townhouse and then using the equity from the condo to purchase your next property, Harris says.
How much risk can I take?
Ask yourself how much risk you’re comfortable taking, says Harris. That depends a lot on your circumstances, but risk isn’t something to be afraid of when you have enough income, an emergency fund and a diverse portfolio, she says. And risk is worth it when you invest for the long term and can reap those long-term rewards. Harris says younger people who are further away from retirement can and should be willing to take on more risk. Harris, who identifies as Black, also says How can I make What am I willing to some people of color have homeownership more sacrifice in terms of NAM Y. HUH / ASSOCIATED PRESS FILE historically been afraid to affordable? space? take on much risk, but she A sign is displayed in front of a home for sale in Prospect Heights, Ill., on July 10, wants them to remember Another portal to Whether you have a goal 2022. that risk/reward combo as homeownership Harris of buying a new home or well. in one area. S&P 500 was down more Wright , a CFP and recommends is the renting a new place next If you haven’t started “Unfortunately, a lot of than 15 percent this year. retirement income certified year, there’s a lot to consider. Neighborhood Assistance investing, or stopped The market’s volatility could newer investors were very Corporation of America, also professional at PF Wealth For instance, 30-year fixed investing due to money being excited about Bitcoin, understandably make Management Group in Bala mortgage rates went from an known as NACA. It’s a Cynwyd, Pennsylvania. This investors unsure about how crypto, (and) all of that, and tight, remember you can mortgage program that average of 3.45 percent in forgot those lessons,” Wright always invest at a pace that to move forward. Financial is something she did with allows working people to January to 6.90 percent in feels comfortable for you. says. professionals say a diverse her sister in 2017. purchase a home with no October thanks to inflation “You have to invest and Wright considers shortportfolio and taking the right “It’s not going to be down payment, closing and Fed rate increases. The term money to be cash you’ll become comfortable with amount of risk might be costs, fees or stringent credit forever necessarily, but this Fed has already raised that, whether that’s need in 12 months to three steps in the right direction. gave us the opportunity to interest rates 75 basis points prerequisites. biweekly, bimonthly or years. Keep diversification in have our own home, and we Members can also buy four times this year. This, monthly,” says Harris. Instead of putting all of mind, says Wright. can leverage the equity and their homes at a belowcoupled with housing You can always start with your money into the stock Diversification is when you all of that going forward,” market interest rate. The shortages, has driven the lower-risk investments if you market, put the amount invest in a variety of assets she says. program is currently in 28 national median price of you’ll need in the near future want to play it safe. Some to manage risk and market states and the District of homes above $400,000 for How diverse is my include I bonds, money into an emergency fund, volatility. The FTX and Columbia. the first time, according to portfolio? high-yield savings accounts, market funds or TreasuryBlockFi collapses that Buying a home in 2023 the National Association of Inflation Protected a certificate of deposit or This year hasn’t been the happened in November are could also be more Realtors. Securities, also known as short-term fixed-income a reminder about why to Homeownership may still attainable if you’re willing to greenest for investors — at securities like Treasury bills, TIPS. avoid investing too heavily the start of December, the get a roomie, says Jocelyn be an attainable goal, but
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Average long-term U.S. mortgage rates inch down this week ASSOCIATED PRESS
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WASHINGTON, D.C. — The average long-term U.S. mortgage rate declined for the fifth straight week, even as the Federal Reserve just raised its key borrowing rate for the seventh time this year and signaled there were more *toAPR=Annual come in Percentage Rate. Federally insured by NCUA. Advertised rate based 2023. on credit scores of 750+ and a 12-month lending period. Rates are subject to change Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate inched down to 6.31percent from 6.33 percent last week. A year ago the average rate was 3.12 percent. The average long-term rate reached 7.08 percent as recently as early November. Mortgage rates are still more than double what they were a year ago, mirroring a sharp rise in the yield on the 10-year Treasury note. The yield is mostly influenced by global demand for U.S. Treasurys and investor expectations for future inflation, which heighten the prospect of rising interest rates overall. The Federal Reserve raised its rate again Wednesday by 0.50 percentage points in a bid to bring down the highest inflation in de* APR=Annual Percentage Rate. Federally insured by NCUA. Advertised rate based cades. It was the Fed’s seventh increase this year and pushed the on credit scores of 750+ and a 12-month lending period. Rates are subject to change central bank’s key rate to a range of 4.25 percent to 4.5 percent, its highest level in 15 years. More surprisingly, the policymakers forecast their key shortterm rate will reach a range of 5 percent to 5.25 percent by the end of 2023. That suggests that the Fed is poised to raise its rate by an additional three-quarters of a point * APR=Annual Percentage Rate. Federally insured by NCUA. Advertised rate based and leave it there through next on credit scores of 750+ and a 12-month lending period. Rates are subject to change year.
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