Why homeowners are feeling “trapped”

Plus, the hidden Hollywood housing market

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  April 29, 2023 | Issue #90

Good morning! This week we’re talking about millennial homebuyers, Hollywood and the seller’s conundrum. This issue of Money Moves was written by Aly J. Yale.   Is the American Dream dead? Eddie Lee / Money; Getty Images Thanks to 6%-plus interest rates, it’s not particularly easy to buy a home these days. For millennials, though, that might not be a problem. In fact, according to a new survey, nearly a quarter of millennials plan to rent for the rest of their lives. Some chalk it up to finances, while others just prefer the flexibility of renting. Either way, those forever renters are in luck: rents just notched their first year-over-year decline since 2020. It was only a 0.4% dip on average, but in some cities, the drops were much more significant. Rents in Austin, Texas, for example, have fallen 11% in the last year. In Chicago, they’re down 9%. As reporter Mary Ellen Cagnassola put it, “Renters are finally catching a break.” For more: Rent Forever: The Share of Millennials Who Say They'll Never Own a Home Is Surging Where rents are dropping: Rent Prices Post Their First Annual Decline Since 2020   From our sponsor Get the Credit You Deserve with Lexington Law Are you tired of struggling with bad credit? At Lexington Law Firm, we believe that everyone deserves a second chance. With our proven credit repair solutions, we can help you take control of your credit and work to achieve the financial freedom you deserve. Join the thousands who have chosen Lexington Law Firm for their credit repair needs. LEARN MORE   The homeowners that gained the most wealth One of the biggest perks of owning a home is that it helps you build wealth. According to the National Association of Realtors, though, that wealth-building opportunity varies widely between races and income classes. Black homeowners, for instance, saw their homes gain $115,430 in value over the last 10 years. But Asian homeowners? They saw more than double that gain. White homeowners fell somewhere in the middle. Take a look at the breakdown by race and income:   Stuck in place Rangely García / Money High mortgage rates are bad for buyers. And most home sellers? They’re buyers, too. It’s a conundrum that has led a whopping 82% of potential home sellers to say they feel “locked in” to their current house — and the super low interest rate that came with it. As of last week, mortgage rates sat an average 6.39%, according to Freddie Mac, so to sell and buy a house now would require a pricey trade-off, particularly if they bought their home or refinanced their mortgage in the last couple of years. Just look at the numbers: A homeowner who bought back in 2021 could have a rate as low as 2.65%. On a $300,000 house, that’s a payment of just $1,208. If they sold that house and bought a new $300,000 home at today’s rates, their payment would jump to an eye-popping $1,874 — nearly $700 more. Most consumers don’t have that kind of extra cash just lying around, so it’s no wonder more than half of potential sellers say they won’t list until rates come down, according to a Realtor.com survey. The question is: Will that happen anytime soon? It could — but likely not enough to motivate most sellers. Fannie Mae currently predicts mortgage rates will drop by year’s end — though only to 5.7%. (An estimated 85% of current homeowners have rates under 5%.) For more: Home Sellers Feel Trapped By Their Low Mortgage Rates Mortgage rate update: What Happened with Mortgage Rates This Week   The hidden Hollywood housing market Shutterstock Here’s a fun fact about me: I didn’t just study journalism in college. I also was a radio-TV-film major, made student films and helped manage the campus radio station. I’ve always had a fascination with how films, TV and other forms of media get made — which is why a new story by the New York Times stood out to me this week. Written by reporter Joanne Kaufman, it delves into the “Lee List” — an invite-only, peer-to-peer system that actors and entertainment pros can use to find housing while working on location. Keep in mind, it’s not Tom Cruise and Will Ferrell using the tool (stars of that caliber get more hands-on help, according to Kaufman), but instead, your lesser-known actors who, as of 2021, made just $23 an hour on average. “Actors who go out of town for work in the theater, on a television series or a movie have more to worry about than memorizing their lines,” Kaufman writes. “Where can they stay for the month, six months, a year that their contract specifies, and still stay within their budget?”   Happy hunting, P.S. Spot a weird or unique home listing? Share it with me on Twitter, where I’m @alyjwriter, or via email at alyjyale@gmail.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this email or send them to the Money Moves subscription page.   Money’s Essential Home Buying Resources: Spring 2023 On the hunt? Check out Money’s Mortgage Calculator, list of The Best Mortgage Lenders and look at the latest mortgage rates. Thinking of refinancing? Our list of The Best Mortgage Refinance Companies can help. You can also use our Mortgage Refinance Calculator or these refi tips. Key question: How much house can I afford?   This newsletter is free because Money earns a commission when you click or make purchases from the links in this email and on our site. We also receive compensation for some of the products and services featured in this message. Offers may be subject to change without notice. Learn more about how we make money. Privacy Policy • Advertise With Us • We're Hiring! 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