Last month, many countries began to feel the impact of tariffs introduced earlier this year, leaving many of us waiting to see if the pricing on certain products would change. As of this time, tariffs ran from 10% for the United Kingdom to 50% for Brazil. However, these are subject to change, including the tariffs between China/United States. A recent truce between the countries means the U.S. will keep its standard tariff rate on Chinese goods at 30% while China maintains a 10% rate on American goods.
Home Financing
Hot Opportunities for Fast-Moving Buyers
Recent economic data contributed to some market changes that buyers have been longing for, including lower interest rates. Earlier this month, the labor market began showing signs of a slowdown during 2025. Newer data reported that only 73,000 jobs were added in July, which was well below the expected 115,000.
This gives serious homebuyers a window of opportunity to lock in a competitive mortgage rate, as rates could fluctuate in either direction soon, affected by economic data due for release later this month and in September.
Lower rates aren’t the only good news for buyers:
- Home pricing is slowing down. The median asking price rose just 2.3% year-over-year during the four weeks ending August 3, one of the smallest increases in two years.
- There are more home sellers than buyers in the market. The total number of homes for sale is up 8.5% year over year, while pending sales are down 1.2%.
More sellers are willing to negotiate. Some are accepting offers under asking price or providing incentives to help close a sale, such as financing closing costs or repairs.
House hunters should keep in mind that competition may be rising in their area. On a national level, mortgage applications have already increased, rising 2% week over week in late August.
Source: redfin.com
Insurance
Credit Scores And Homeowners Insurance
Homeowners shopping for insurance for their property are usually aware of some factors that affect their premium’s cost. These may include the home’s age, and whether it’s in an area commonly threatened by events like hurricanes and wildfires.
However, another factor may actually affect your premium’s rate more than age or location: your credit score.
A recent article published by the Consumer Federation of America included some disturbing facts:
- Many insurance companies charge a typical homeowner $1,996 dollars (or 99%) more each year for having a FICO score of 630 or less.
- Insurers have somewhat skewed views of FICO scores. Many consider a 740 FICO score as only being within the medium range, although many lenders rate it as “very good”.
- Only those with an 820 FICO and above will get the best rates, which the major credit agencies consider “exceptional”.
- Some homeowners have found that it’s literally more expensive to have a low credit score than to live in an area with a high disaster risk.
- Homeowners in Pennsylvania, Arizona, Oregon, and West Virginia face the largest penalties for lower credit scores.
- Only three states—California, Maryland and Massachusetts—prohibit insurance companies from penalizing homeowners for low credit scores.
If you feel you’ve been unfairly penalized because of recent unemployment, medical costs or a similar event, contact your insurance company and ask for a “life event exception”. Your state’s Department of Insurance may also be able to assist.
Source: consumerfed.org
Building Wealth
Real Estate Investing to Build Long-Term Wealth
Owning a home unlocks significant wealth-building opportunities. You can convert your property into a rental income source. Whether it’s renting out a room, an ADU, or the whole house, it can be a way to fund vacations, save up for another property, or generate passive income.
Even better, your home equity is a powerful tool you can tap into through a home equity loan, cash-out refinance, or HELOC. That money isn’t just for home repairs; you can use it for anything, from investing in the stock market to paying for college, retirement, or even something fun like a boat. Essentially, by owning property, you gain options.
Why Building Long-Term Wealth via Real Estate Makes Sense—Especially Right Now
1. Tapping into Equity Expands Your Financial Toolkit
As you build equity, whether through mortgage payments or market appreciation, you essentially get access to a loanable asset. A cash-out refinance or HELOC lets you redirect that equity to new investments or pressing needs. Equity isn’t just wealth—it’s flexibility.
2. Dual Income + Appreciation
Real estate gives you two key wealth streams:
- Rental income delivers consistent cash flow when properties are well-located and occupied.
- Appreciation boosts your net worth over time, especially in rising markets.
Together, they create both returns today and growth tomorrow
3. Leverage Works in Your Favor
With real estate, you can control a high-value asset using modest initial capital. Rental income can outpace monthly costs, and as values climb, your ROI multiplies. This amplifies returns, but, as always, careful due diligence is essential.
4. Tax Perks That Strengthen Returns
Real estate investing comes with tax benefits that other assets often can’t match:
- Deductible mortgage interest
- Property taxes and operational expense write-offs
- Depreciation to reduce taxable income
- These incentives can significantly boost your net returns.
5. Diverse Strategies for Different Investors
There’s no one-size-fits-all approach:
- Buy and Hold: Great for steady growth and income over time.
- House Hacking: Live cheaply while renting out parts of your home—easy entry with passive income.
- Flipping or BRRRR (Buy, Rehab, Rent, Refinance, Repeat): Ideal for investors with time, know-how, and capital.
- Turn Primary Residence into an Investment: Move into a new home and rent out the old one—leveraging equity on your existing home.
6. A Hedge Against Market Swings
Real estate is not directly tied to stock market fluctuations, offering portfolio diversification. Plus, in higher interest environments, savvy investors can find bargains as competition softens.
Owning real estate has also been shown to be a key path to building intergenerational wealth. Homeowners, on average, have significantly higher net worth than renters.
7. Putting It All into Today’s Context
With inflation, volatile markets, and ongoing affordability challenges, real estate stands out as a tangible, long-term solution. It offers:
- Protected value through physical asset ownership
- Recurring income streams
- Access to leveraged growth
- Ways to pass wealth to future generations
Bottom Line
Real estate isn’t just property; it’s a wealth machine. You build equity, earn passive income, tap into tax advantages, and diversify your holdings all while holding a tangible asset that can support multiple facets of your financial life. In today’s economy, where people seek both growth and stability, real estate remains one of the most compelling vehicles for building long-term wealth.
Source: apmortgage.com
Credit and Consumer Finance
What Will the “No Tax on Tips” Rule Accomplish?
A new federal tax rule now allows many tipped employees to deduct up to $25,000 in tips from their federal income taxes. It’s hoped that this will increase their take-home pay, although not all tipped staff will benefit.
The No Tax on Tips Act is part of H.R. 1, and created a temporary income tax deduction for workers who earn tips as a major part of their income. Under new rules, eligible taxpayers may exclude up to $25,000 in reported cash tips from their federal income taxes between 2025 and 2028.
Definitions
By federal law, a tipped worker is anyone who makes at least $30/month in tips. However, four states have a lower threshold, only requiring workers to receive $20 in tips monthly to be classified as a tipped worker. Five other states have no state laws setting a minimum wage for tipped employees.
The new provision permits cash tips earned within a calendar year to be deducted from a worker’s adjusted gross income (AGI), which could reduce the amount of pay that’s subject to federal income tax.
Who Benefits; Who Won’t
Tipped workers with lucrative incomes, such as casino workers and bartenders at expensive restaurants, often report substantial tip income. They’re most likely to benefit from federal tax savings.
Those earning less, like restaurant servers and gig workers, may not earn enough to benefit from the deduction. It’s believed that about 37% of these workers earn too little to owe any federal taxes.
Source: empower.com
Did You Know?
Researching your Finances? Beware of Google’s AI Overview
As AI permeates our daily lives, it’s also made itself at home when we’re online. Google users now see more than links to sites—a summary generated by Google’s AI Overview usually appears above these. These are convenient shortcuts, especially if someone’s searching for an answer to a simple question. But there’s one hitch: AI Overview makes quite a few mistakes.
While there are many examples of AI Overview slipups, a Google search is disarmingly honest. A recent search of this phrase: “How many Google AI Overview answers are inaccurate?”, generated this AI Overview response:
“While it’s difficult to pinpoint an exact number, studies and reports indicate that a significant percentage of Google AI Overviews contain inaccuracies. Some reports suggest that 43% of finance-related AI Overviews contained inaccurate or misleading information. Another study found that 57% of AI Overviews related to life insurance were incorrect.”
A May 2024 Google blog article explained that their Overviews’ accuracy is similar to their older Featured Snippets search. These took 10 web listings and displayed them in a box, highlighting them as the best of all results. But Featured Snippets made mistakes as well, such as one where it answered the question “Why are fire trucks red?” with a Monty Python sketch.
While switching to another search engine may be a better idea, especially when you’re shopping for financial products and services, calling your local APM loan advisor for assistance can provide real peace of mind.
Source: kiplinger.com