Here are three of the week’s top pieces of financial insight, gathered from around the web:
30-year mortgage rates back over 3 percent
The 30-year fixed mortgage rate crept above 3 percent last week for the first time since July, said Orla McCaffrey at The Wall Street Journal. While still low by historical standards — when average rates fell to 2.98 percent in the summer it was “their first time under the 3 percent mark in about 50 years of record keeping” — rates have been consistently ticking upward since January. “Mortgage rates tend to move in the same direction as the yield on the 10-year Treasury,” which recently hit its highest level in a year. Higher rates could slow the pace of refinancing, “which accounted for 60 percent of mortgage originations in 2020.” With a 30-year rate of 2.75 percent, “about 18 million U.S. homeowners could reduce their monthly” mortgage payments, compared with 11 million if the rate is 3.25 percent.
Curtains for the road warrior?
While Americans suffering from cabin fever are starting to book vacations, companies appear to be “in no rush to send their people back out on the road,” said Alexandre Tanzi at Bloomberg. “The latest Census Bureau survey of small businesses found that only 27 percent of companies expect to spend money on travel in the next six months,” and the Global Business Travel Association has said it doesn’t expect a return to pre-pandemic travel levels until 2025. One school of thought holds that changes in habit from the pandemic will prove temporary; “business travel bounced back after the Sept. 11 attacks and the 2008 financial crisis.” But after a year of working remotely, many corporate executives have instead “noted the effectiveness of videoconferencing tools — and the money they saved.”
Extra time for IRA contributions
It’s not too late to lower your 2020 tax bill by making a prior-year IRA contribution, said Kailey Hagen at The Motley Fool. If you were waiting to make a contribution to a traditional individual retirement account between Jan. 1 and tax day, April 15, you can elect to make it a prior-year contribution, rather than choosing a current-year contribution. The benefit is that if you hadn’t already maxed out your contribution limits, you didn’t miss the opportunity to reduce your taxable income for the year. “Making a prior-year contribution isn’t much different from making an IRA contribution for the current year” — just make sure you choose the option for a 2020 contribution, because some IRA providers automatically default to current-year.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.