On today’s episode of Wealth!, host Brad Smith covers everything from the sports sector to the housing market.
The NCAA has announced a groundbreaking $2.77 billion settlement, which will pay damages to Division I college athletes. Host Brad Smith breaks down the details of this landmark decision.
Melissa Cohn, William Raveis Mortgage regional vice president, joins the show to explain why now is an opportune time to purchase a home. Yahoo Finance’s Rebecca Chen then makes an appearance to discuss the uptick in the sale of luxury homes in Silicon Valley.
As summer approaches, Bank of America’s Head of Consumer and Business Products provides savings tips to help viewers make the most of their travel plans without breaking the bank. Yahoo Finance reporter Ines Ferré also discusses the impact of inflation on gas prices ahead of Memorial Day weekend.
This post was written by Angel Smith
Video Transcript
Welcome to wealth everyone.
I’m Brad Smith and this is Yahoo Finance’s guide to building your financial footprint.
Our community of experts will give you the resources, tools, tips and tricks that you need to grow your money on today’s show, big news on the housing front mortgage rates clocking in below 7% for the first time in over a month.
We break down what it will mean for the home buying season and on the road again, hitting the roads this weekend will reveal the gas prices that you’ll be paying over the holiday weekend.
Plus summer travel will break down how Americans are planning to spend on the holiday over the next few months here.
All that much more coming up during today’s show, but let’s get back to those mortgage rates did dip below 7% for the first time in over a month.
So is it time for buyers who are on the sidelines to jump back in the game?
Joining us.
Now we’ve got Melissa Cohn, the Regional Vice President of William Ravis Mortgage joining us here.
Great to have you here with us, Melissa.
So people naturally here.
Oh, wait, we’re back below 7%.
Is this the time to strike?
Well, the answer to that in my eyes is yes because when, as rates continue to drop, as we hope they will through the year, more buyers are gonna come back into the marketplace.
So if you want to be able to take advantage of where price points are today, then now is the time to buy and take advantage of these rates.
When rates are lower, more buyers will come back into the marketplace because of the increased affordability and prices are likely to go up, not to disagree with you at all.
But to merely ask the question, does it matter if people are gonna just look to refinance later on down the line?
Story continues
Anyway, if you think about it, it’s really a question of doing the math.
You know, if you have to pay three or $400 a month more on a mortgage today, but you would have to pay $10,000 or $20,000 more for that house in a year.
$400 a month is $5000 a year.
It’s probably cheaper to buy now and then refinance next year.
Certainly.
Ok.
So where could some of the hotspots really emerge based on where we’ve seen some of the buying activity or bidding activity still remain strong?
Um You know, I’ve seen a lot of uh sort of in the over a million dollar price point.
There seems to be a lot of activity there, you know, higher price point, uh borrow buyers that have greater income, willing to step in and pay the higher mortgage rates today to take advantage of what they feel or lower real estate prices, you know, in today’s market.
Um You know, there are also a lot of people that are just moving.
People are relocating for work.
People who with life cycles are having kids, they can no longer stay in their smaller home and need to move and those people are moving.
We saw in the data from Freddie Mac that although this week’s data on previously owned home sales, so existing home sales showed a decline, total inventory of both new and existing homes is up and focusing in on that new homes elements too as that’s taking on even more of a percentage than that than we’ve seen in historical standards and averages of the overall home buying market.
How does that alleviate?
Now, some of the pressure on pricing?
Well, what a lot of these new homebuilders are doing is that they are offering incentives with regards to the financing, they’re offering to pay points to buy down their rates, offering a lower initial rate, making it more affordable for someone to buy into these new homes.
If you’re buying an existing home, a seller doesn’t have the same ability necessarily to give you a lower rate for your mortgage with that in mind.
And we’re taking a look at some of where home sales fell in April on, on screen according to the Nar and Census Bureau data.
One of the other areas that a lot of homeowners are trying to figure out is when does it feel like the right time to list?
Especially as they’re tracking mortgage rates as well?
Well, you know, that’s a really good question.
You know, if you are going to be able to, you know, do you need to sell now or can you wait?
You know, if you think that rates will really come down strongly over the course of the next year as we all hope they will and prices will go up if you can wait, do you want to wait to list?
You know, if you’re going to be moving and you have a low interest rate, you know, you have to find the home at the right price.
So if you’re going to want to buy lower today, you’re gonna have to sell today.
Um And it’s really just a question of where you’re gonna find that happy medium for you as a seller because as a seller, you’re probably gonna be a buyer as well and just lastly, renting versus buying right now with mortgage rates.
Sure, coming down below 7% but still sitting right now at a 30 year 694.
Does that kind of play into for renters out there?
Does that to you signal that we could see people come off the sideline in droves who are currently renting.
I mean, the answer to that should be yes.
And if you buy now today and you expect that mortgage rates, let’s say over the course of the next two years could be as much as 2% lower than they are today.
Then the cost of that home ownership will only decline over the course of the next few years.
And you’ll have the ability to refinance and to lock into a much lower rate.
You know, rental.
When you rent, you have no equity, you’re all you’re doing is you’re basically, you know, you’re giving your money to your landlord and you’re not building any equity or investment for yourself.
Yeah.
Well, thanks for reminding me Melissa Cohen, who is the regional Vice president of William Ravis mortgage.
Thanks so much.
Likewise, the power of A I hype spilling from the tech world into the housing market of Silicon Valley as artificial intelligence booms.
So too does the demand for luxury homes here with the detail we’ve got Yahoo Finance’s Rebecca Chen.
Hey, Rebecca, hey Brad.
So we’ve seen luxury housing doing extremely well in Silicon Valley lately.
Data is showing us that there’s been an 80% increase in the number of luxury homes sold in Silicon Valley and by luxury, I mean homes over $5 million.
I’ve also chatted with local agents who are saying that they’ve been seeing their luxury listings or many of their luxury listings are going in contract within seven days and many times without any contingencies.
So we’ve been wondering why this has been the trend and why all of a sudden one of the market analysts we spoke with said it’s because of the A I boom, we all know that A I boom is happening right now and NASDAQ has a lot of stock that is going up in price going up in prices.
And these employ employees who work in Silicon Valley has been doing extremely well and that is what’s making them having the confidence and also the money to purchase these higher end price real estates.
So you know, this hasn’t been like something new in Silicon Valley we’ve seen in the past that there has been many booms and busts in in the area given how tech has been doing and many times the real estate trend often follows what has been happening during the two thousands or the 19 nineties, 1995 to 2 thousands when there was that whole internet boom, housing prices also increased during that time.
And then again, between 2014 and 2020 when social media companies like Facebook and Instagram were doing extremely well.
Housing again went up during that time.
So now this time, we believe that the A I boom is giving the luxury market another boost in Silicon Valley and people are just giving how well A I has been doing.
And from the looks of it.
It will continue to be doing pretty well going forward.
A lot of people in the area just have the confidence for these real estate markets, artificial intelligence.
It’s giving as the, as the youth out there would say, uh luxury home market boost.
Ultimately, we’ll see what happens and what prices as well that appreciates that.
Thanks so much, Rebecca breaking that down for us, everyone.
We’ll be right back with much more wealth here on Yahoo finance.
Stay tuned.
Your favorite college athletes could start getting paid in the near future.
The NCAA has agreed to a settlement which will clear the way for college athletes to be paid directly for the first time.
So let’s get into some of the details here.
As part of the agreement, the NCAA is settling three federal antitrust lawsuits and will pay $2.77 billion in damages over the next 10 years.
This payout will be open to all division one athletes going back to the year 26.
Oh, by the way, there’s been about 14,000 claims from athletes since then.
The catch is that any athlete who receives a share agrees to not be part of any antitrust lawsuits against the NCAA in the future.
According to ESPN, the NCAA will be hiring a sports economist to build a formula out to figure out how to divide the almost $3 billion.
But that’s only half the story also announced yesterday, the NCAA and the five largest conferences sometimes referred to as the Power five agreed in principle to a revenue sharing agreement which will allow each school to pay their athletes.
The schools will pay 22% of their average athletic department revenue which comes out to about 21 to $22 million annual.
But how did they calculate that number according to documents obtained by our colleagues at Yahoo Sports.
They took three of the most significant revenue streams in an athletic department.
Team contracts, ticket sales and sponsorships to generate an average for the 69 power schools and that average came out to about $100 million.
Now, all of these agreements still need to be approved by the judge presiding over the three cases and it could be months until everything is settled.
All that to mean if you’re expecting your favorite college athletes to all get paid this fall, you might be disappointed schools are expecting to start sharing revenue in fall of 2025.
Well, with the long weekend just about here, if it hasn’t started for you already.
AAA is projecting that over 43 million Americans will be traveling a distance of over 50 miles over the next few days.
Most of whom will be driving here to let you know what to expect at the pump.
This weekend, we’ve got our very own Inez for, hey, Ines.
Yeah, Brad and simply put, well, prices have been declining over the last month when we talk about gasoline prices, let’s take a look at where we’re at.
With the average today, we are looking at $3.61 per gallon.
That is an average because in other places, you are seeing prices a little bit higher, a little bit lower than that.
But look from a month ago, prices are down about five cents from a year ago.
They are up about five cents on average now.
And the little little all sos had told me earlier this week that he expects to see prices coming down by about five cents over the next several days.
Part of this is because the wholesale prices have been coming down and part of it is also because oil prices have been coming down.
But nevertheless, again, these are averages you do have different is in different states, especially on the west coast where you tend to see the price and the price is gasoline per gallon as far as the rest of the year is concerned though.
Look the expectation, the EI A had said that expectation is that they could see, you could see a 10% bump in prices for an average of about $3.70 per gallon for the driving season this year.
There are some analysts think that that’s a little bit expecting it to be around the three mid threes levels.
But really what is going to determine a lot is the hurricane season later this summer, you could see prices spike due to that in the summer time.
Yeah, that’s synonymous with what Opus energy partners was telling us earlier in today’s shows here as well.
And that talking about the impact of whether there excellent breakdown.
Yahoo finance his own an E for on all things, oil and gas, appreciate it.
Well, the SEC is taking its first step towards allowing Ether ETF S to trade the securities and exchange commission approving applications for eight Ethereum ETF S. However, there are further approvals that are needed before products can launch.
But let’s back up for all of some of the crypto curious investors out there who are just sticking their foot or toes in the water here.
What is Ether with a market cap of over $450 billion right now.
It’s the second largest Cryptocurrency behind Bitcoin and it’s used to power the Ethereum Blockchain.
But Ether and Bitcoin, they differ in several ways here.
The most important difference is that the Ether and Blockchain and Bitcoin blockchains run on two different frameworks used to power crypto transactions.
Ether, it runs on proof of stake.
Bitcoin, proof of work for Bitcoin transactions are verified by computers using electricity so called crypto miners.
While for Ether’s network, those same transactions are verified through a process known as staking.
Now staking is like putting your money in this case, your Ether into a pool to help keep the network secure and then validate transactions.
And in return for this, you have a chance to get more ether think of it almost like interest.
The SEC approved 11 spot Bitcoin ETF S earlier this year and hype around the currency led to Bitcoin reaching an all time high of over $73,000.
Back in March, the SEC has just cleared the way for eight ether ETF S to trade pending some further approvals.
And this development is the latest example of some of the success the crypto industry is having in Washington as it pushes for friendlier regulation and greater freedom to launch new products.
For years.
The SEC denied applications to create such ETF S tied to Cryptocurrency.
Some of those wins changing.
We’ve got much more on wealth after the break.
You’re watching Yahoo Finance.
We’re heading into Memorial Day weekend and into the summer when 72% of Americans plan to travel according to a new Bank of America survey.
Joining me now in studio with some new financial insights into the summer trips.
We’ve got Mary Heinz Dros who is the head of consumer products at Bank of America.
Great to have you here in studio with us.
Well, thanks for having me.
Absolutely.
Let’s dive into this.
I mean, huge expectations.
Everybody is just trying to make sure that they get some R and R get some vacation over the course of this summer.
But how can they do so and with the understanding of where they need to financially plan adequately.
What are some of the expectations here?
Yeah, I mean, as you shared, 72% of Americans are going to have a summer vacation this year according to the Bank of America summer survey.
And in order to do that effectively, they need to have a budget because vacations are expensive.
People wanna get out and we have lots of suggestions on how to do that.
I mean, 84% of people say they’re going to have a budget.
But what’s hard is actually sticking to it.
And one of the ways that um you’re able to do it is really laying out all the different aspects of the vacation.
It’s not just about transportation and accommodations, think of excursions, souvenirs, eating out and then how can you mitigate some of the costs for things that are less important to you?
For example, dining can be really expensive.
So why don’t you save those expensive meals for night and be a little low cost on breakfast?
You know, you talk about within the survey planning the trip as early as possible.
Like what’s the, what’s the best rule of thumb for people to adequately financially plan and plan as early as possible in terms of what that time span ahead of the vacation should look like?
Well, what our survey showed that in April, 36% had already planned their vacation and what’s really important and planning tends to be transportation and accommodation.
Those are the things if you wait to the last minute get really, really expensive, but you can be a little bit more flexible on some of the other things, wait till you get to the location, decide what excursions that you wanna have.
Uh But planning is just important too because some things also sell out.
You don’t wanna go to this dream place and not get to do the one thing you wanted to do.
And so the earlier plan the better.
And so where are we seeing the appetite for international versus domestic?
Right now, we have about two thirds of travel plans are in the United States and then about 38% outside of the United States.
And some people are doing both as you can see those add up to above 100%.
Um When we look at international, what’s really popular right now is Japan and that’s really when you look at the yen relative to the strength of the dollar, it’s making it really attractive on somebody’s budget also continue to see tremendous interest in cruises overall.
According to the Bank of America Institute, travel spend this year over last year is down 1.5%.
However, cruises are up 12%.
These are especially pop popular with boomers and it enables you to see a lot of international countries and islands at a really affordable rate.
You know, we talk often about the, the great wealth transfer and where future generations are going to perhaps even change the fabric of the type of vacations that we’re taking.
What are some of the anticipations there two years out from now how the types of vacation or experience economy at whole could shift as a result of new generations coming into more wealth.
Yeah.
What’s interesting?
And this is a lot of the hangover from the pandemic.
People are prioritizing experiences over everything else we’re seeing, you know, lower retail sales, lower electronic purchases.
It’s all about those memories that they can do with other people.
And when you look at our younger generation, they are more and more doing things in groups and really going to those out of the norm, vacation, something unique.
They can share on social media, right where they got a giraffe walking up to the window as they’re eating breakfast, things like that.
Exactly.
And are climbing a mountain without ropes like all sorts of crazy things and that takes a lot of money.
And so the more that um you see that wealth transfer, the more enables it, there’s also some great ways even before that wealth transfer that things can be more affordable for the younger generation.
You know, I mentioned like 28% of people take their trips with friends by doing things in groups who can share the cost, you know, instead of having individual hotel rooms, rent a house together it makes it a lot more affordable.
Just lastly, Mary, while we have you here, there’s ways to tap into credit card benefits too.
I mean, you build up the rewards for a reason.
So how many people are actually putting those points to work correctly as they’re planning their vacations out?
Oh, I mean, it’s really tremendous.
Um We see in our own data that the more majority of rewards redemption is going towards travel, you know, about 70% of people say that they will use credit cards while they’re traveling and about a third are prioritizing their travel rewards card.
I’m going to Greece for two weeks with my family and I am using those reward points to offset my travel purchases that, you know, I earn those points on our customized cash rewards card.
And it just makes you feel it’s not free because right, you had to spend to get them, but it just makes it, you feel like you’ve really gotten a great discount and, and then you, you know, have a much nicer vacation.
If you guys need a uh vacation photographer or something like that, I got three lenses, I could toss them in the flag.
Oh, done, deal, done deal.
Got you covered Mary Heins.
She was the head of consumer products over at Bank of America.
Great to see you.
Thanks for having me.
That’s it.
For wealth, everyone.
I’m Brad Smith.
Thanks so much for watching.
Guess what coming up.
We’ve got stocks in translation.
Yes.
Yahoo finance host, Jared Bli, joined by infrastructure capital advisor, Ceo Jay Hatfield, alongside Yahoo finance reporter Brooke Defer to discuss global markets.
Stay tuned.
