Credit Sesame’s personal finance weekly news roundup July 23, 2022. Stories, news, politics and events impacting the personal finance sector during the last week.
- The EU’s Central Bank finally raises interest rates to 0%
- Housing sales cool for the 5th straight month
- IRS eases inheritance tax pain for ultra wealthy families
- Average gas prices may be heading below $4
- Rents break records but still cheaper than buying
- Big companies get nervous about the jobs market
- Surging prices changing the way we date
- Tech city centers gutted as workers stay home
1. The EU’s Central Bank finally raises interest rates to 0%
The European’s Central Bank raised interest rates for the first time in 11 years by an unexpectedly high .5%. That takes the rate back to zero after being negative since 2014. The larger-than-anticipated increase was likely prompted by last week’s release of June’s inflation rate, which hit a record-breaking 8.6% (annualized). See the full article on CNN.com.
2. Housing sales cool for the 5th straight month
Sales of existing US homes fell even more than expected in June, according to the National Association of Realtors (NAR). This is the weakest level of sales since the depth of the pandemic in June 2020 and down over 15% from June last year. That said, buyers are not seeing significant relief yet – average days on market actually fell by two days to 14 days, and the median sales price for an existing home rose to a record $416,000. See the full article on MarketWatch.com.
3. IRS eases inheritance tax pain for ultra wealthy families
An IRS rule allows individuals to give up to $12.06 million tax-free to their children and other nonspousal beneficiaries during their lifetime and after their death. (Anything exceeding this is subject to a 40% gift or estate tax.) Spouses may transfer to their surviving spouse what’s left of the tax-free limit that they didn’t use, and they now have five years to do so. This exemption won’t last forever – in 2026, when the exemption expires, it may be reduced to about $6 million. See the full article on Barrons.com.
4. Average gas prices may be heading below $4
Interest rate hikes, lower fuel use and increased oil and gas production may provide welcome relief to drivers by the end of summer, according to industry analysts. AAA reports that the national average for unleaded gasoline was $4.467 per gallon Wednesday. Prices have steadily declined from a high of $5.01 nationally on June 14. See the full story on CNBC.com.
5. Rents break records but still cheaper than buying
The US median monthly rent hit a new record high of $1,876 a month in June according to Realtor.com’s rental report. This is a 14% increase over June 2021. But that’s still $561 a month (30%) less than comparable monthly starter home costs. The difference has widened considerably in the last year, mainly due to the increased cost of financing property as mortgage rates have nearly doubled. See the full story on CNN.com.
6. Big companies get nervous about the jobs market
Desperate post-pandemic hiring may be in the rearview, according to projections from some of the largest US employers. Investment banking giant Goldman Sachs claims it will slow hiring in latter 2022. The auto industry rumor mill claims Ford will announce job cuts soon. Tesla, Twitter and Victoria’s Secret already laid off workers earlier this month, and so did meme stock phenomenon GameStop. See the full story on MSN.com.
7. Surging prices changing the way we date
Inflation is making many singles more selective about who they date and even causing some to put their search for “the one” on pause. And 34% of OKCupid users say the higher costs have impacted their love life. Dating coaches are seeing even high-income clients express concern and men are increasingly less willing to shoulder the full cost of outings. See the full story on Bloomberg.com.
8. Tech city centers gutted as workers stay home
While most big cities have struggled to recover post-COVID, tech centers like San Francisco face greater challenges. Employees continue to resist returning in-person to work, and the largest tech employers are not forcing the issue. Demand for office space has cratered and many smaller businesses that count on tech workers have not rebounded. See the full story on CNBC.com.