Personal finance weekly news roundup January 4, 2025

Credit Sesame’s personal finance news roundup January 4, 2025. Stories, news, politics and events impacting personal finance during the past week.

Wall Street completes best 2 years since the late 1990s

The S&P finished 2024 with a gain of over 20% for the second consecutive year. This is the first time that has happened since 1997-1998. Investment analysts expect the stock market to continue to rise in 2025 but at a more moderate pace. The median forecast among strategists tracked by Yahoo Finance is a 12% gain in the S&P 500 in 2025. Among the concerns that may weigh on the market are the high valuations of stock prices and a renewed threat of inflation. See article at Yahoo.com.

Holiday spending up modestly in 2024

Mastercard’s SpendingPulse report showed that non-automotive retail sales from November 1 through December 24 were up by 3.8% from the same period a year earlier. That period captures activity during the holiday shopping season. A 3.8% increase represents only a slight improvement after adjustment for the 2.7% inflation rate over the past year. Restaurant spending was up 6.3% from a year ago, showing consumers demand more experiences than merchandise. Online shopping grew by 6.7% year-over-year, compared with 2.9% growth for in-store sales. See report highlights at Mastercard.com.

Credit card write-offs rose sharply in first 9 months of 2024

Credit card companies wrote off $46 billion in bad debts in the first three calendar quarters of 2024. That was a 50% increase over the same period in 2023. Credit card companies write off seriously delinquent payments when they conclude that the cost of trying to collect on them is likely to exceed the money they’d be able to recoup. The level of credit card write-offs is the highest since 2010. That was when the economy was still struggling to recover from the Great Recession. See article at PYMNTS.com.

Mortgage rates rise for third straight week

30-year mortgage rates rose by six basis points at the end of December 2024 to 6.91%. This was the third consecutive weekly increase, during which time 30-year rates have risen by a total of 31 basis points. 30-year rates are now higher than they’ve been since early July 2024 and 83 basis points higher than at the end of September. 15-year mortgage rates also rose for a third straight week, climbing by 13 basis points to re13%. See rate details at FreddieMac.com.

Improvement in consumer confidence proves short-lived

After rising in October and November 2024, the Conference Board’s Consumer Confidence Index took a sharp downturn in December. The overall index fell by 7.2% during the month. The index component that considers current conditions was barely affected, falling by less than 1%. However, the part of the index which looks forward to near-term conditions plunged by 13.4%. This left the Expectations Index at 81.1. As a result, the Expectations Index may be close to falling below 80, a level traditionally associated with recessions. See details at Conference-Board.org.

Government sues Rocket Mortgage over alleged kickbacks

The Consumer Financial Protection Bureau (CFPB) has sued Rocket Mortgage and The Jason Mitchell Group for allegedly rewarding real estate agents and brokers for steering clients towards Rocket Mortgage. The Mitchell Group is a network of real estate companies operating across 41 states. The CFPB alleges that Rocket Mortgage would refer prospective home buyers to the Mitchell Group’s agents and brokers in return for influencing their clients to obtain their mortgages through Rocket Mortgage. As part of the plan, Rocket discouraged agents and brokers from providing their clients with information about mortgage products not offered by Rocket. This included information about down payment assistance programs. See details at ConsumerFinance.gov.

Pending home sales continued to rise in November

The National Association of Realtors’ Pending Home Sales Index (PHSI) rose 2% in November 2024. This was the fourth straight monthly increase for the PHSI. The PHSI is based on signed purchase contracts (not closed sales) and is considered a leading indicator of home-buying activity. The volume of signed contracts increased in the South, Midwest, and West in November, with the Northeast being the only region that showed a monthly decline. All four regions showed a rise in home-buying activity over the past 12 months. The West had the most significant increase over the past year, with an 11.8% rise in signed purchase contracts. Notably, this pick-up in home buying began before mortgage rates started rising in December. See details at NAR.Realtor.

Home prices show modest progress in late 2024

The latest monthly data from the Federal Housing Finance Agency’s seasonally adjusted House Price Index show that home prices rose in the US by 0.4% in October 2024 and by 4.5% from the previous year. However, that rate of year-over-year growth was slower than the previous year. Prices rose in all nine geographic regions tracked by the index over the past 12 months. The Middle Atlantic region showed the most substantial price growth over the past year, with a 7% increase. See details at ABA.com.