Tag: business news

Dollar General’s new Popshelf stores chase inflation-weary shoppers in the suburbs

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HENDERSONVILLE, Tennessee — Dollar General‘s next big strategy for growth is tucked in a strip mall in suburban Nashville, and it is coming to other cities soon.

It’s a new store called Popshelf. Over the past two years, the Tennessee-based discounter has tested the store concept, which caters to suburban shoppers with higher incomes, but sells most items for $5 or less.

A wide range of merchandise fills the shelves, including holiday-themed platters, party and crafting supplies, novelty foods such as gourmet chocolates and Portobello mushroom jerky, and gifts like dangly earrings, lip gloss and toys. It’s designed to be a treasure hunt that keeps shoppers coming back.

Now, with inflation still high, Dollar General is ramping up its plans for Popshelf. It aims to double the banner’s locations to approximately 300 stores next year. Over the next three years, it plans to grow to about 1,000 locations across the country. Eventually, it sees an opportunity to reach about 3,000 total locations. It is also testing mini Popshelf shops inside of some of its Dollar General stores. So far, it has about 40 of those shops.

But Popshelf will have to prove it can hold up in a tougher economy. Walmart, Best Buy, Costco and others have warned of weaker sales of discretionary items as consumers spend more on necessities. Target recently cut its holiday quarter forecast, and Kohl’s pulled its outlook, citing middle-income consumers who feel stretched.

On Dollar General’s recent earnings call, CEO Jeff Owen said even customers who make $100,000 a year have been shopping at its stores.

Chief Merchandising Officer Emily Taylor said Popshelf can draw spending-conscious shoppers by offering items that don’t cause guilt.

“The fact that we have such great value across a lot of these categories gives our customers at Popshelf an opportunity to really treat themselves at a time where they may have a difficult time doing that in other locations,” she said.

Higher incomes, higher profits

Popshelf is designed to drive higher sales and higher profits than the Dollar General store banner. It has more general merchandise, which typically has higher margins than food. Each Popshelf store is projected to hit between $1.7 million and $2 million in sales annually with an average gross margin rate that exceeds 40%.

In the third quarter, Dollar General’s gross profit as a percentage of net sales was 30.5%. That includes all of its stores, but the vast majority are under the namesake banner. It does not disclose annual or quarterly sales on a store level.

By the numbers

POPSHELF

  • About 100 stores in nine states
  • Carries mix of home goods, seasonal decor, party supplies, crafts and toys
  • Most items for $5 or less
  • Suburban locations
  • Draws shoppers with a household annual income from $50,000 to $125,000

DOLLAR GENERAL

  • About 18,800 stores in 47 states
  • Carries many everyday items, such as food, cleaning supplies and paper products
  • A mix of price points, with about 20% of items for $1 or less
  • About 75% of stores are in small towns or rural areas with 20,000 people or less
  • Core customers have an annual household income of $40,000 or less

Source: Dollar General

The new store concept also courts a wealthier customer who lives in the suburbs — like a busy mom who is juggling a couple of kids, said Tracey Herrmann, senior vice president of channel innovation. That customer may need to buy toothpaste and cleaning supplies, but she wants to go a place where she can browse and toss fun items into her basket as well, Herrmann said.

Inside of Popshelf stores, the brands and items on shelves reflect that customer. For example, stores sell food and household brands often carried by higher-end grocers, such as Mrs. Meyer’s hand soap, Amy’s frozen meals and Tillamook cheese. It has a selection of global snacks, such as Pocky and Hello Panda. And it has specialty kitchen and baking items, such as inexpensive spices and unique condiments.

It also has exclusive brands, such as its own line of low-priced candles, room sprays and diffusers — including a signature scent, Citron Berry, which fills up its store. It carries some private brands sold by Dollar General, such as Believe Beauty, a makeup brand that’s been touted by influencers, including Bethenny Frankel of Bravo’s “The Real Housewives of New York City.”

It has rotating seasonal items, depending on the time of year, such as Christmas decor, pumpkin-themed items, bright colors for Easter and beach towels in the summer.

Herrmann said the store’s name was inspired by that mix of merchandise, which constantly gets refreshed.

“We believe the product pops off the shelf and really brings itself to life without us really even having to do much with it,” she said.

Discounters’ time to shine

Discounters and off-price brands have led the way with store expansion in recent years. Dollar General is the fastest-growing retailer in the country by store count, according to Coresight Research, a retail-focused advisory firm. Its namesake banner has grown at a rapid clip, too. The company plans to open about 1,050 new stores in the U.S. in the coming fiscal year — including the Popshelf locations.

Eight other discounters and off-price brands round out the top ten, including Popshelf’s competitors Dollar Tree, Five Below and Home Goods, which is part of TJX Companies.

Over the past several years, John Mercer, Coresight’s head of global research, said those value-conscious retailers have benefited from millennials buying homes and starting families as they juggle expenses such as college debt. Plus, he said, members of the second-largest generation — baby boomers — are looking for value as they retire and live on a fixed income.

Inflation has become an additional tailwind for the off-price and discounter sector this year and into 2023, he said.

Dollar General has historically performed well in economic downturns. It posted same-store sales gains during every quarter of the Great Recession in the late 2000s. On the other hand, Target, Macy’s, Nordstrom and Kohl’s were among the retailers with seven or eight quarters of negative same-store sales in that period.

Investors have been bullish about Dollar General. Shares of Dollar General have risen about 4% so far this year, as the S&P 500 Index has fallen by about 16% in the same period.

Corey Tarlowe, a retail analyst for Jefferies, said Popshelf may face some pressure in the near term as consumers think more carefully about purchases. Yet he said the tight labor market means most shoppers are still employed. Plus, he added, Popshelf’s middle- or upper-income consumer likely has a larger budget and bigger bank account.

Tarlowe said the store’s wide mix means it can steal away share from many different retailers, including crafting stores like Joann, Michaels and Hobby Lobby, pet stores like Petco, drugstores like CVS and Walgreens and dollar stores like Five Below and Dollar Tree.

“At the end of the day, it’s all about the value messaging,” he said. “That’s the core of it. It’s Dollar General pricing wrapped in a pretty bow.”

–CNBC’s Nick Wells contributed to this report.

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Top Wall Street analysts bet on these stocks to brace for a sharp downturn

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VMware at the NYSE, Dec. 14, 2021.

Source: NYSE

Investors’ attention has returned to the Federal Reserve after a hot November jobs report last week.

That’s because even though the central bank has pushed interest rates higher, the economy continues to add jobs and wages keep rising. Friday’s report on last month’s payrolls surprised investors and chilled sentiment.

Nevertheless, investors need to keep a longer-term outlook as they decide how to best position their portfolios. To that end, here are five stocks chosen by Wall Street’s top pros, according to TipRanks, a service that ranks analysts based on their track record.

VMware

While software company VMware (VMW) reeled from lackluster quarterly results, Monness Crespi Hardt analyst Brian White maintained his positive conviction on the stock.

Importantly, the company will soon be acquired by Broadcom (AVGO). According to the agreement between the companies, VMware shareholders can either cash in their shares at $142.50 per share or choose to exchange their holdings for 0.2520 shares of Broadcom for each share of VMware. However, in all probability, shareholders may end up with a 50-50 split between cash and stock.

This is important, as this deal has enabled VMware to “dodge the 2022 tech apocalypse,” in White’s words, with the stock up 4% in 2022.

Given the pending acquisition, VMware did not issue any guidance. However, White remains bullish on the basis of the shareholder benefit as well as the stable position of VMware in the tech sector.

“VMware’s earnings remain depressed after aggressive investment initiatives and a model transition. At the same time, the current economic and geopolitical environment is daunting, resulting in a more uncertain future, creating a greater allure for large, well-managed, stable, tech companies with benefit from digital transformation, such as VMware,” White theorized.

White is ranked No. 697 among more than 8,000 analysts tracked on TipRanks. The analyst has a record of 55% successful ratings in the past year, with each rating generating average returns of about 8.7%.

Diamondback Energy

Oil and natural gas exploration company Diamondback Energy (FANG) has gained the attention of RBC Capital Markets analyst Scott Hanold after making two significant strategic acquisitions recently. The analyst expects the acquisitions to be accretive to his earnings per share estimates for 2023 and 2024 by 7% to 9%.

Importantly, at a time when almost every company has worrisome near-term prospects, Hanold sees a solid upside to Diamondback’s near-term free cash flows, thanks to its latest acquisition of Permian Basin assets from Lario. (See Diamondback Dividend Date & History on TipRanks)

The analyst is also upbeat about Diamondback’s asset monetization plan, and believes that it will help the company maintain a clean balance sheet even after the two recent acquisitions. “We think FANG will still maintain an adjusted leverage ratio below 1.0x following the close of the two transactions. However, we think the company will progress more to exceed its $500 million asset monetization target with a focus on midstream assets that trade at more robust values in the market,” said Hanold, who reiterated a buy rating and $182 price target on the stock.

Impressively, Hanold holds the 8th position among more than 8,000 analysts on TipRanks, and boasts a 70% success rate. Each of his ratings has generated average returns of 33.7%.

Microchip Technology

The next stock on our list is Microchip (MCHP), a leading manufacturer of embedded control solutions. The company’s exposure to secular growth trends in the end-markets of 5G, artificial intelligence/machine learning, Internet of Things (IoT), advanced driver assistance systems (ADAS), and electric vehicles bode well for the company in the long run.

Recently, Stifel analyst Tore Svanberg recently reiterated a buy rating on MCHP stock and even increased the price target to $80 from $77. (See Microchip Stock Chart on TipRanks)

The analyst believes that Microchip is well positioned to “manage a softer landing relative to peers during broader industry correction,” on the basis of solid near-term backlog visibility, defensive end-market exposure, resilient pricing of proprietary products, etc.

Svanberg stands at No. 41 among more than 8,000 analysts followed and ranked on TipRanks. The analyst also has a solid track record of 65% profitable ratings and average returns of 20.4% for each.

Analog Devices

Analog Devices (ADI) is another stock on Tore Svanberg’s buy list. The manufacturer of high-performance analog, mixed-signal and digital signal processing integrated circuits holds the biggest shares of the data converter and amplifier markets.

“We believe ADI is a formidable high-performance analog/mixed-signal powerhouse with pro forma CY21A revenue of (nearly) $10 billion, and the leading challenger to the current industry heavyweight, TXN (Texas Instruments),” said Svanberg.

Analog Devices also has strong cash flow generating capabilities, which kept Svanberg bullish: The company has generated $3.50 billion in the past 12 months. (See Analog Devices Hedge Fund Trading Activity on TipRanks)

The analyst sees Analog Devices outperforming its peers in the present challenging macroeconomic environment. Based on his observations, Svanberg increased his price target to $195 from $190.

CrowdStrike

A leading name in the cybersecurity space, CrowdStrike (CRWD) disappointed investors and analysts alike recently with weaker-than-expected guidance. This underscored the vulnerability of the software sector to macroeconomic forces.

Nonetheless, Deutsche Bank analyst Brad Zelnick remained focused on the longer-term prospects of CrowdStrike, calling it one of the three best-positioned security companies to overcome the strong headwinds. (See CrowdStrike Holdings Financial Statements on TipRanks)

Zelnick observed solid traction in large deals and a strong existing customer base, which can support the company through challenging times.

The analyst also observed that despite not being able to deliver on the top-line part of the business, CrowdStrike was consistent in maintaining solid margins, reflecting “the flex/leverage in the business model.”

Although Zelnick lowered the price target to $150 from $230 to account for his lower estimates, the analyst maintained a buy rating after looking beyond the storm.

Interestingly, among more than 8,000 analysts on TipRanks, Zelnick is ranked 128th, having delivered successful ratings 67% of the time in the past year. Moreover, each of his ratings has garnered average returns of 15.10%.

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‘It’s a work in progress.’ How Covid has changed the life insurance marketplace

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Family and friends gather in San Felipe, Texas, for the Jan. 26, 2021, funeral of Gregory Blanks, 50, who died of Covid-19.

Callaghan O’Hare | Reuters

As Americans brace for the third winter of the Covid-19 pandemic, many are still grappling with ongoing related health and financial issues — including insurance battles over long Covid treatments and disability claims. 

But for the life insurance industry, experts say the long-term effects aren’t yet known.

“It’s a work in progress,” explained Michel Leonard, chief economist and data scientist at the Insurance Information Institute. “There’s not enough statistical data at this point.”

Faced with a staggering loss of life, insurance firms saw payouts soar during the pandemic.

More from Your Health, Your Money

Here’s a look at more stories on the complexities and implications of long Covid:

U.S. life insurers paid more than $90 billion to beneficiaries in 2020, a 15.4% increase in payments compared to 2019 — the largest year-over-year jump since the 1918 influenza epidemic, according to data from the American Council of Life Insurers.  

Payouts to beneficiaries increased by nearly 11% in 2021, jumping to over $100 billion, the organization’s latest report shows.

The demand for life insurance policies also jumped as consumers rushed to protect loved ones. 

Individual U.S life insurance application activity increased by 3.4% in 2021, following a record-breaking year-over-year growth of 3.9% in 2020, according to the MIB Life Index’s 2021 annual report.

However, the life insurance industry is still wrestling with mortality changes and how these shifts may affect the underwriting process. 

There’s still ‘uncertainty’ about mortality

Stuart Silverman, principal and consulting actuary at Milliman, an actuarial and consulting firm, said the Covid-19 pandemic has affected the life insurance industry in several ways, as outlined in a paper he co-authored in June.

Two areas of consideration are “mortality assumptions,” which are projections of death rates and the “capital requirements” needed to keep life insurance providers solvent. Both can factor into the price of policy premiums, he said.

While it’s clear mortality rates have increased since the beginning of the pandemic, experts don’t know yet how factors related to Covid like preexisting conditions, compromised mental health or delayed care may affect future assumptions, according to the paper.   

“I think there is uncertainty with how this will unfold,” said Silverman, noting there’s “ongoing debate” on many of these points.

How ‘long Covid’ affects mortality assumptions

Future mortality assumptions are murky for those who may be suffering from so-called long Covid, one of the terms used to describe lingering health problems after contracting the virus.

These conditions affect an estimated 7.7 million to 23 million Americans, according to a report released by the U.S. Department of Health and Human Services on Nov. 21.

“It’s really difficult to underwrite for something that you don’t have a clear way to diagnose and define,” said Marianne Purushotham, corporate vice president and head of Limra’s data services.

It’s going to take five to 10 years for us to fully understand what patterns we’re starting to see.

Stuart Silverman

principal and consulting actuary at Milliman

Overall, the life insurance industry is in a “major data gathering stage,” Purushotham said, collecting information on all the ways Covid may be affecting mortality, including indirect effects like opioid overdoses and suicide rates.  

She said one of the “big considerations” is whether impacts will be a long-term trend, noting that companies may not want to change pricing if mortality “settles into where it was pre-Covid.” 

“It’s going to take five to 10 years for us to fully understand what patterns we’re starting to see,” Silverman added.

Applications may include Covid questions

While updates to mortality assumptions may take time, experts say life insurance applications have been quicker to change, depending on state regulations. 

Consumer advocate Brendan Bridgeland, policy director and staff attorney at the Center for Insurance Research, has noticed Covid questions appearing on life insurance applications since the beginning of the pandemic and expects more in the future. For example, some companies ask questions about your history of testing positive for the disease and if you have a current diagnosis.

“States are still coming to grips with it,” he said. “Companies have been quick to add application questions.

“But I don’t think they’ve been perfected yet,” Bridgeland added.

“While you may not see a vaccine question on a life insurance application yet, it’s more likely two to three years from now,” Bridgeland said. “I can see that on the horizon and I think that’s going to be inevitable,” he added.

“There are very big differences between the questions asked by life insurers right now,” Bridgeland said. “Some make a lot of sense and others are very vague and slightly concerning.”

With a lack of consistency across providers, he worries there’s potential for consumers to misread a question and answer it incorrectly.

If a provider finds inaccuracies, there’s a chance they will return your premiums rather than pay the death benefit to your loved ones, Bridgeland said.

To avoid mistakes, ask for clarification from an insurance broker or the provider, he said. “Just take your time, make sure you understand the questions and answer them truthfully,” Bridgeland said.

Regulatory guidance is pending

In January 2021, the Consumer Federation of America sent a letter to the National Association of Insurance Commissioners, asking the organization to adopt a model rule for life insurance underwriters who may “delay or deny coverage” to applicants who have or have had Covid-19.

Prompted by life insurance underwriting changes in Europe, the Consumer Federation of America requested that the rules be “totally transparent” and “meet standards for reasonability” for applicants who may experience Covid-related delays or denials.

“This rule is also important for current policyholders who may be considering dropping their coverage for a period to save some money to help the family get through the economic consequences of Covid-19,” the letter said. “These policyholders need to know the possible danger of such action.” 

The CFA also sent the letter to major life insurance companies, asking for them to “voluntarily make Covid underwriting rules public and reasonable.” 

While the NAIC addressed the letter during their spring 2021 meeting, the organization did not have enough information to consider supporting a model rule, a spokesperson for the National Association of Insurance Commissioners told CNBC.  

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Defying forecasts, crude oil prices have wiped out most of this year’s gains and could head lower

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Tom Kaye of Plymouth, Pennsylvania tops off his neighbor’s gas tank for them on at a gas station in Wilkes-Barre, Pennsylvania, U.S. October 19, 2022. 

Aimee Dilger | Reuters

Oil prices are defying expectations and are barely higher on the year, as the outlook for oil demand continues to deteriorate for now.

West Texas Intermediate crude futures for January settled higher Monday at $77.24 per barrel, following a drop to $73.60 per barrel, the lowest price since last December. WTI was up 2.2% for the year, after briefly turning negative earlier Monday.

Gasoline prices at the pump have also been falling dramatically and could be cheaper than last year for many Americans by Christmas, according to an outlook from the Oil Price Information Service. On Monday, the national average was $3.546 per gallon of regular unleaded fuel, down from $3.662 a week ago but still higher than the $3.394 a year ago, according to AAA.

‘Macro headwinds rather than tailwinds’

China’s lockdowns and the rare protests against Beijing this weekend have raised more doubt about the outlook for the country’s already weakened economy.

“We think the recessionary [forces] around the world, particularly in the three largest economies, are dominating the macro environment for the year as a whole, and we think that the issues we’ve been identifying as relatively bumpy in the period ahead are going to remain,” said Ed Morse, global head of commodities research at Citigroup. “Right now, we are looking at macro headwinds rather than tailwinds.”

Morse was one of the more bearish strategists on Wall Street in 2022, but he said the latest market developments and the hit to major economies made even his forecast too bullish. He had revised his outlook higher at the end of the third quarter, based on the shift by OPEC+ to focus on prices and the pending ban of Russian crude by Europe.

The oil market has been focused on those two potential catalysts for higher prices, but the impact on demand from the slowdown in China and new lockdowns has outweighed concerns about supply for now. The European Union’s ban on purchases of seaborne Russian oil takes place Dec. 5. The EU is also expected to announce price caps for Russian crude.

OPEC+ is also a factor. The group includes OPEC, plus other producers, including Russia. The group surprised the market in October when it approved a production cut of 2 million barrels a day.

“We’re waiting to see if they signal even deeper cuts. There were rumors in the market about that happening,” said John Kilduff, partner with Again Capital. After dipping to the day’s lows, oil rebounded on Monday as speculation circulated about new OPEC+ cuts, he said.

Brent futures, the international benchmark, was lower Monday afternoon at $83.19 per barrel, recovering from $80.61 per barrel, the lowest price since January.

“Right now the target is below $60 [for WTI]. That’s what the chart is indicating… this is a new low for the move because previously the low for the year was late September and now we’ve broken that,” said Kilduff. “It all depends on what happens in China. China is as important on the demand side, as OPEC+ is on the supply side.”

Higher oil prices next year?

Analysts expect oil prices to increase next year. JPMorgan predicts Brent will average $90 per barrel in 2023.

Morgan Stanley expects the return of much higher prices mid-year, after China ends lockdowns.

“Our balances point to modest oversupply in coming months. Hence, we see Brent prices range-bound in the mid-80s to high-90s first,” the firm’s analysts wrote. “However, the market will likely return to balance in 2Q23 and undersupply in 2H23. With limited supply buffer, we expect Brent to return to ~$110/bbl by the middle of next year.”

Kilduff said he does not expect OPEC+ to make a big market impact this year with its cuts, though it is a wild card. Another factor that could drive prices would be if the war in Ukraine were to escalate.

“I’m not that worried about an OPEC+ cut just because the reality of it is most of the countries aren’t going to be cutting. It’s only going to be Saudi Arabia dialing back on the edges,” he said. “Everyone is so far into their quota. It’s a numbers game.”

Morse said market dynamics have changed and oil demand growth will be smaller as a percentage of gross domestic product. “We’re seeing a significant slowdown in global growth,” he said.

Oil demand growth for China turned out to be much less than expected. “We were thinking demand was sluggish. It turned out to be significantly more sluggish… We had thought this year was going to see 3.4 million barrels of demand growth. It actually grew by 1.7 million barrels,” Morse said. He noted that Europe’s demand is down by several hundred thousand barrels, and the U.S. was flat in 2022.

Morse said the demand decline is also part of bigger trend, tied in part to the energy transition toward renewables. “We are also looking for the peak of oil demand in this decade. It’s part of a longer term story,” he said.

The weather’s influence

Kilduff said La Niña’s weather pattern has also affected prices, with warmer weather in North America. He and other analysts say it could continue to impact the market.

“We keep getting cold outlooks, and then it falters. This is La Niña. You will get cold days, but then you get balmy stretches,” Kilduff said. He said concerns about winter heating fuel supplies have abated with a build in supplies in Europe.

The result for consumers could be a windfall at the pump during the holiday season. OPIS expects prices to keep falling into January before turning higher again.

“If you combine the Chinese demonstrations with the warm weather in the northern hemisphere, that’s kind of a double-barreled assault on the energy price at the moment,” said Tom Kloza, global energy analyst at OPIS. He said he expects gasoline to average between $3 and $3.25 per gallon at its low, but it will be below $3 in many parts of the country.

Kloza said by Christmas, the U.S. national average should be slightly below the $3.28 level it was at last year.

Diesel prices have also been falling. According to AAA, diesel averaged $5.215 per gallon nationally Monday, off by about 8 cents per gallon from a week ago.

“We’ve been counter-seasonally building distillate fuel supply so that’s been easing things. If the weather stays relatively benign here, we’re going to lose that upside catalyst and grind lower still,” said Again’s Kilduff.

–Michael Bloom contributed to this story.

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How to write a unique blog in just five minutes by Scalenut Cruise Mode?

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In this world of blogging and content, writing bloggers or content writers want to be fast to join the race. Google wants unique content with new ideas which increases bloggers’ work. To make this work easy and fast many AI tools have been introduced. What if I say that there is a tool that can write a unique blog in just five minutes? Yes, this is true. You are at the right place.

Introducing cruise mode by Scalenut your AI pen pal that writes an entire SEO blog for you within five minutes. Enter the cruise mode from the dashboard by adding your target keyword and location. Click on Start. on doing so. The tool goes through the internet in real-time to gather insights on the keyword you wish to rank for. It generates a comprehensive SEO report for you in only a few minutes.

Click Here To Write Unique Blog In Just 5 Minutes

On top, you will see an overview of the five quick steps you need to take. First, give a short description of your blog to get the AI some context. At this stage, you can also prioritize the NLP key terms by switching the title on but you can also add any additional keywords you want the tool to abuse within the blog when writing click on Create title to move on to step two. In the second step, you will find ranking titles for the top 30 URLs. You can add the one you like in the text field on the left by clicking on it and even rephrasing it. Or you can select from some brilliant AI-suggested titles to get more options from AI.

Click on Generate more. Moving on to step three, setting the outline. Here you will find the wireframe of the top 30 ranking articles and frequently asked questions. You can select a header you want as part of your outline by clicking on it or dragging it to the desired location press Enter to start a new menu. You could write a custom heading or get each title idea by clicking on AI suggestions. Press the Tab to convert an h2 to h3 and shift plus tab to convert an h3 to h2. To delete a header click on the bin present next to it to check what’s written for a particular heading in top-ranking pieces. Click on the eye icon. Besides the heading section, you will also find cruise mode suggested for the number of headings you must have to make your content more comprehensive.

But here is the best part. You can now check which headings to give more importance to by toggling on the highlight key terms option highlights the headings which have NLP words in views that you can incorporate into your content to improve it’s great. At this step, you can also address your audience queries by adding FAQs from the questions section. Here you will find questions from Quora, Google, Reddit, and AI-generated ones here as well. You can add custom questions or take AI suggestions if you like. Cruise mode generates the introduction and conclusion section on its own. Click on Generate writing points after setting the brief. This step is where the AI is just one point for the headers you selected in the previous step. You can add points of your own or take AI suggestions to cut a particular point you don’t want. Click on the bin present next to that point.

Once you were done it generates the content and your first draft is ready. On your left, you can still see the outline of your draft. On your right is the first draft. Ready for finishing touches. Read through the generated content and click on the Refresh icon to the right of any particular section to regenerate to like once you are satisfied with the draft, click preview here you’ll be able to preview your blog. You can check the scale its proprietary grade for your blog content, and the total word count in the panel below. Click on Download draft and choose your preferred file format to export a copy of the draft here device. You will also have an option for export to the editor. This opens your draft in this scale editor where you can do a whole bunch of other things like adding more NLP terms, binding surf ideas, and accessing AI templates. And that’s it. Writing powerful blogs has never been this easy. 

Click Here To Write Unique Blog In Just 5 Minutes

The future of parking is in New York — and it costs at least $300,000 per space

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Hidden deep below some of New York City’s most luxurious apartment buildings is an exclusive world of futuristic parking spaces where high-end vehicles are parked and retrieved by robotic parking systems. 

The high-tech spots are a rare amenity in the Big Apple, and if you want your car to occupy one of these VIP spaces you’ve got to be ready to fork over hundreds of thousands of dollars.

The spots are only accessible to residents of buildings where the apartments will set you back several million, and if you want your car to live there too you’ll need between $300,000 to $595,000 more to score some precious space in the private garage.

CNBC found two buildings in Manhattan offering spots for sale inside a so-called robo-parking garage.

The first is located at 121 East 22nd Street near NYC’s Gramercy Park where a 140-unit condo building developed by Toll Brothers offers 24 automated parking spots.

High above the 22nd St condo’s underground garage is the wraparound terrace of a 5-bedroom duplex apartment that recently sold with a $300K parking spot for $9.45 million.

DroneHub Media

Earlier this month, Lori Alf, a full-time resident of Florida, picked up one of the rare parking spaces for $300,000 when she purchased the building’s priciest unit: a 5-bedroom duplex spanning almost 3,800 square feet.

She told CNBC the package deal, which totaled $9.45 million, was a gift to her children who are now spending more time in New York.

The sun-drenched living area inside Lori Alf’s penthouse unit at 121 E 22nd St.

Toll Brothers City Living

Now when Alf or her kids want to park the family’s Porsche Cayenne in the condo’s garage they pull up to a kiosk where the wave of a small radio frequency ID tag unlocks access to a subterranean car lair where no humans are allowed. 

Pressing a button on the kiosk sends a jolt of life into an empty metal pallet one level below. It slides across a track onto a powerful lift that sends the empty pallet up toward ground-level to meet the Alfs who can then carefully position their car on top of it.

As a vehicle enters the automated system a motion board delivers messages to the driver to assure the vehicle is positioned properly for the parking process to begin.

CNBC

Before their wheels are whisked away, a set of cameras scan the system’s entryway to confirm the car’s trunk and doors are all closed — and that there are no objects or humans left behind that might obstruct the automation. 

When the scanners deliver the “all clear,” the pallet, with car on top, disappears into the floor, pausing briefly as it descends into the basement to spin the vehicle 180 degrees before slotting it into one of the empty spaces.

The system can lift and shuffle two dozen cars across four rows and two levels. 

A car parked on the lower level of the automated parking garage at 121 E 22nd St where prices start at $300K per spot.

CNBC

Retrieving the car is a lot like making a selection from a giant vending machine. Residents swipe their RFID tags once again, and the system delivers their cars in about 2 minutes and 15 seconds.

One of the perks for Alf: She never has to put the car in reverse to exit the building.

“The car is turned for you by the robot,” she told CNBC. “Who doesn’t live for a robot that sets you in the right direction in NYC?”

Pedro Fernandez, a local sales representative for Klaus Parking, the company that sold the German-made parking system to the building’s developer, told CNBC it’s the most automated garage he’s ever installed in Manhattan. 

The company’s top-tier system typically costs between $50,000 and $70,000 per spot installed. Fernandez said developers invest over a million dollars in the intelligent parking infrastructure because it’s super efficient at arranging vehicles and maximizing space.

The view inside the robo-parking machine at 121 E 22nd St reveals a system of pallets and hydraulic lifts that maneuver cars around a two-tier subterranean parking structure.

CNBC

“There was no other way to park 24 cars,” Fernandez said of the garage space under 121 East 22nd Street.

The self-parking system can unlock more spaces per square foot because it doesn’t require the ramps and driving lanes you see in most conventional garages, he said.

​”As crazy as it may sound, $300,000 for a residential parking spot is considered a reasonable price in New York City,” said Senada Adzem, a Florida-based real estate broker at Douglas Elliman, whose team represented Alf in her recent purchase.

Adzem told CNBC spots in the system that include a charging plug for electric vehicles will run you $350,000. And whether it’s electrified or not, every parking spot carries a $150 per-month maintenance fee.

“The overall lack of parking in the city, an ongoing problem with no end in sight, will only escalate such pricing,” said Adzem. 

She believes short supply could turn the seemingly lavish expense into a money-maker for owners, who could eventually resell their spot at a profit.

A car inside the automated parking garage at 520 West 28th where spots start at $450K.

Martien Mulder & Related

Across town, parking spots are even pricier in a building that was once home to popstar Ariana Grande and currently houses rock musician Sting and his film producer wife Trudie Styler.

The price to park at 520 West 28th Street starts at $450,000. 

The $16.5M penthouse at 520 W 28th St unfolds over the 15th & 16th floors, featuring a 2,040 sq ft terrace that wraps around the building’s curvaceous glass facade.

Colin Miller / Related

The luxe residence, designed by famed architect Zaha Hadid and developed by The Related Companies, includes a 4,500-square-foot penthouse currently on the market for $16.5 million. And according to listing agent Julie Pham of Corcoran, a parking space in the building’s garage can cost upwards of $595,000 more per vehicle.

“I’d never seen anything like it before,” Pham said of the unique amenity.

Residents can use an app to communicate with the so-called “secured parking portal” and remotely start the automated retrieval process so the car is ready to go when they are.

The $16.5M penthouse listing includes ten rooms and almost 4,500 sq ft of indoor living space, the asking price does not include parking.

Colin Miller / Related

While Pham wouldn’t reveal the identities of any past or present clients, she did tell CNBC the automated parking was a major draw for one famous resident, who had a security team examine the parking area prior to moving in.

The unnamed celebrity’s representatives OK’d the deal in part because the star could enter and exit the garage in total privacy, Pham said.

 “They liked the idea that you didn’t have to engage with a valet or an attendant, or that anyone couldn’t come in right behind you,” she said.

And during the pandemic, the broker said, residents who wanted to minimize their exposure to Covid-19 loved that they could deposit and retrieve their vehicle without handing over their keys to a valet.

While the automated spots are pricey, they’re not even close to NYC’s most expensive.

In recent years, some condo developers have pushed their asking prices for a basic concrete-and-yellow-stripe parking spot to the $1-million mark, according to Jonathan Miller, president of Miller Samuel, a firm specializing in real estate appraisals and consulting. Still, he said, it’s unlikely a spot with a 9-figure asking price has ever lured in an actual buyer.

“I never found evidence of their actual closings,” he told CNBC.

Miller, who analyzed public records at CNBC’s request, said one of the most expensive parking spots sold in town last year was located at 220 Central Park South, where a parking space went for an impressive $750,000. Miller said, based on public records, it appears connected to an apartment in the building that traded for $16 million.

“It’s really tough to track since most sales are embedded in the sale of a unit,” Miller told CNBC.

And it’s even tougher to track sales of spots in the newer automated systems, because, in many cases the spots are actually licensed to buyers, not deeded and sold like most real estate, according to brokers.

Miller said his best estimate for the going rate of a single NYC parking spot: “I think $300,000 to $400,000 is the sweet spot for new development.”

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Two companies have luxury trains called the ‘Orient Express.’ Here are the differences

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The “Orient Express” has been called the “king of trains” and the “train of kings.”

Royalty, writers, actors and spies have ridden the original route between Paris and Istanbul, which started in the late 19th century.

Author Agatha Christie described the Orient Express as “the train of my dreams.” She set a bestselling murder mystery novel on its carriages, and fictional spy James Bond rode it in the movie “From Russia With Love.”

Travelers might think of the Orient Express as a single luxurious train, but there have in fact been quite a few over the years, with many routes and owners.

Soon, people will be able to choose to take a ride on several trains using the Orient Express moniker, by two competing companies, the LVMH-owned luxury travel company Belmond and the French hospitality multinational Accor.

Both have original carriages which date to the late 1800s. But they differ in how they’re designed, where they travel and how long they’ve been in operation — one for decades and the other set to launch in 2024.

History behind the ‘Orient Express’

The original train was conceived by a young Belgian engineer named Georges Nagelmackers, who was inspired by the Pullman sleeper trains he rode during a trip to the United States in 1868.

Nagelmackers wanted to build something similar — but more luxurious — for upmarket passengers in Europe. In 1883, the “Train Express d’Orient” made its first journey out of the Gare de Strasbourg in Paris (now the Gare de l’Est) to Vienna.

The Venice Simplon-Orient-Express will launch eight new suites in June 2023.

Belmond

A few years later, the train was renamed the Orient Express and began traveling to Istanbul, then known as Constantinople. Travelers flocked to the train’s modern technology and luxurious silver cutlery and silk sheets.

Soon, Nagelmackers’ firm started to build more upscale trains for other European routes, including one that ran through the then-new Simplon Tunnel, which connects Switzerland to Italy, as well as the “Arlberg-Orient-Express,” operating between Calais, France, and Budapest, Hungary.

By the 1970s, the original Orient Express trains had made their last journeys, and the carriages fell into disrepair.

But in the 1980s, two businessmen undertook separate endeavors to revive them.

James Sherwood, an American, spent a reported $31 million acquiring and restoring enough carriages to form the “Venice Simplon-Orient-Express,” now owned by Belmond. (To add to the confusion, Sherwood also added hotels to his travel group, calling them Orient-Express Hotels. He renamed the company to Belmond in 2014.)

Swiss tour operator Albert Glatt began a service between Zurich and Istanbul, known as the “Nostalgie-Istanbul-Orient-Express,” which is now owned by Accor.

The ‘Venice Simplon-Orient-Express’

The “Venice Simplon-Orient-Express” has been operating since 1982. The train is made of original restored carriages that Gary Franklin, vice president of Belmond’s trains and cruises, called “works of art.”

“This train comes imbued with so much history,” he said. “The carriages are beautiful.”

As for Accor’s plans to launch a train also called the Orient Express,” Franklin said, “We’re the ones that have been doing it for 40 years, and I think we take it as a huge compliment that people are … seeing how well we’re doing with that.”

A one-night trip on the “Venice Simplon-Orient-Express” starts from £2,920 ($3,292) per person.

Belmond

Belmond has a one-off licensing deal to use the Orient Express name on its Venice Simplon train, Franklin confirmed, while Accor has the rights to the brand as a whole.

The “Venice Simplon-Orient-Express” will operate winter journeys for the first time this December, visiting Paris, Venice, Vienna and Florence, encouraging guests to visit the Christmas markets in those cities.

And next June, new suites are opening on the train, which come with private bathrooms, a steward, kimonos and slippers.

A one-night journey will cost from £5,500 ($6,135) per person in the new suites, which are one step below the train’s most luxurious category — the Grand Suites — which come with private dining, heated floors and “free-flowing” champagne, according to the website.

A suite on the “Venice Simplon-Orient-Express.”

Belmond

Tickets for around half of the new suites have already been bought, and Grand Suites (about $9,600 per night) are almost sold out, Franklin said.

The ‘Nostalgie-Istanbul-Orient-Express’

A few years after Glatt put his train back on the rails, it was again left derelict.

Fast forward to 2015 and French rail company SNCF — which then owned the rights to the Orient Express name — commissioned researcher Arthur Mettetal to find the train.

“We had a beautiful brand, but no cars,” Guillaume de Saint Lager, now vice president of Orient Express at Accor, told CNBC. “We knew there was this complete train, but we didn’t know where it was.”

Using Google Maps and Google 3D, Mettetal located 17 of the original cars on the Poland-Belarus border.

Carriages from the “Nostalgie-Istanbul-Orient-Express,” found derelict on the Poland-Belarus border, are being restored by the French hotel group Accor.

Maxime d’Angeac | Martin Darzacq | Accor

The bar car on the “Nostalgie-Istanbul-Orient-Express” will feature a bar with a glass counter, a tribute to French designer Rene Lalique.

Maxime d’Angeac | Martin Darzacq | Accor

Much of the interior — including original marquetry, or decorated wood — was intact, said de Saint Lager.

A detailed restoration is now underway, with architect Maxime d’Angeac hired to design the interiors. His brief was to “have a kind of fantasy of what could be Art Deco,” d’Angeac told CNBC by phone. He said he had a significant collection of the train’s original drawings and models.

Original glass Lalique lamps, in the shape of a flower, will light the train’s corridors, while other original elements from the rediscovered train will also be incorporated, such as suitcase racks and door handles.

A corridor on the “Nostalgie-Istanbul-Orient-Express” features original glass Lalique flower lamps.

Maxime d’Angeac | Martin Darzacq | Accor

The bar car will feature call buttons for champagne and service, while the dining car will have a mirrored ceiling as well as a glass wall to the kitchen, so guests can see the chef.

Sleeping suites will feature leather walls, embroidered headboards and en suite marble bathrooms. De Saint Lager described it as a “cruise train,” where guests can alight at lesser-known places (routes and prices are yet to be announced).

Passengers will soon be able to stay at “Orient Express” hotels, too, the first of which will launch in Rome in 2024, according to Accor’s website.

The Orient Express ‘La Dolce Vita’

Accor has more plans to use the Orient Express name. It’s also developing six “La Dolce Vita” trains that will run through 14 regions in Italy as well as neighboring countries, with aims to have 10 Orient Express hotels by 2030.

A rendering of the “Orient Express La Dolce Vita,” which will connect Rome to cities like Paris, Istanbul and Split.

Dimorestudio | Accor

These trains will pay tribute to an era different from the Venice Simplon or the Nostalgie-Istanbul trains.

“La Dolce Vita” — which translates as “the sweet life” — refers to Federico Fellini’s 1960 movie, as well as to a sense of Italian glamour and pleasure. The trains are designed to embody “the Italian art of living and all its beautiful traditions,” according to an online post by interiors company Dimorestudio, which is working on the project.

The trains will have 18 suites, 12 deluxe cabins and an “honour suite.” Most will leave from Rome’s Termini station, where passengers will have access to a lounge before departure, and will travel around 16,000 kilometers (about 10,000 miles) of railway lines, with stops at lesser-known Italian destinations.

A rendering of a bedroom suite on the “Orient Express La Dolce Vita,” showing the train’s 1960s-style decor.

Dimorestudio | Accor

Along with the Orient Express La Minerva Hotel in Rome, Accor will also open the Orient Express Venice Hotel in 2024 in a restored palace. In addition, Accor has plans to launch an Orient Express hotel in Riyadh, Saudi Arabia.

Those trains are also set to be launched in 2024, according to a company representative.

— CNBC’s Monica Pitrelli contributed to this report.



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‘We’re alive and kicking’: CEO of banking app Dave wants to dispel doubts after this year’s 97% stock plunge

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Mobile banking app provider Dave has enough cash to survive the current downturn for fintech firms and reach profitability a year from now, according to CEO Jason Wilk.

The Los Angeles-based company got caught up in the waves rocking the world of money-losing growth companies this year after it went public in January. But Dave is not capsizing, despite a staggering 97% decline in its shares through Nov. 18, Wilk said.

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Shares jumped as much as 13% on Monday and closed 7.9% higher.

“We’re trying to dispel the myth of, ‘Hey, this company does not have enough money to make it through,'” Wilk said. “We think that couldn’t be further from the truth.”

Few companies embody fintech’s rise and fall as much as Dave, one of the better-known members of a new breed of digital banking providers taking on the likes of JPMorgan Chase and Wells Fargo. Co-founded by Wilk in 2016, the company had celebrity backers and millions of users of its app, which targets a demographic ignored by mainstream banks and relies on subscriptions and tips instead of overdraft fees.

Dave’s market capitalization soared to $5.7 billion in February before collapsing as the Federal Reserve began its most aggressive series of rate increases in decades. The moves forced an abrupt shift in investor preference to profits over the previous growth-at-any cost mandate and has rivals, including bigger fintech Chime, staying private for longer to avoid Dave’s fate.

“If you told me that only a few months later, we’d be worth $100 million, I wouldn’t have believed you,” Wilk said. “It’s tough to see your stock price represent such a low amount and its distance from what it would be as a private company.”

Employee comp

The shift in fortunes, which hit most of the companies that took the special purpose acquisition company route to going public recently, has turned his job into a “pressure cooker,” Wilk said. That’s at least partly because it has cratered the stock compensation of Dave’s 300 or so employees, Wilk said.

In response, Wilk has accelerated plans to hit profitability by lowering customer acquisition costs while giving users new ways to earn money on side gigs including paid surveys.

The company said earlier this month that third-quarter active users jumped 18% and loans on its cash advance product rose 25% to $757 million. While revenue climbed 41% to $56.8 million, the company’s losses widened to $47.5 million from $7.9 million a year earlier.

Dave has $225 million in cash and short-term holdings as of Sept. 30, which Wilk says is enough to fund operations until they are generating profits.

“We expect one more year of burn and we should be able to become run-rate profitable probably at the end of next year,” Wilk said.

Investor skepticism

Still, despite a recent rally in beaten-down companies spurred by signs that inflation is easing, investors don’t yet appear to be convinced about Dave’s prospects.

“Investors haven’t jumped back into fintech more broadly yet,” Devin Ryan, director of fintech research at JMP Securities, said in an email. “In a higher interest rate backdrop where the cost of capital has been materially raised, we don’t see any abatement in investors challenging companies toward operating at cash profitability … or at the very least, demonstrating a clear and credible path toward that.”

Among investors’ concerns are that one of Dave’s main products are short-term loans; those could result in rising losses if a recession hits next year, which is the expectation of many forecasters.

“One of the things we need to keep proving is that these are small loans that people use for gas and groceries, and because of that, our default rates just consistently stayed very low,” he said. Dave can get repaid even if users lose their jobs, he said, by tapping unemployment payments.

Investors and bankers expect a wave of consolidation among fintech startups and smaller public companies to begin next year as companies run out of funding and are forced to sell themselves or shut down. This year, UBS backed out of its deal to acquire Wealthfront and fintech firms including Stripe have laid off hundreds of workers.

“We’ve got to get through this winter and prove we have enough money to make it and still grow,” Wilk said. “We’re alive and kicking, and we’re still out here doing innovative stuff.”



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The big new Exxon Mobil climate change deal that got an assist from Joe Biden

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Could it be that Big Oil’s next big thing got a big assist from Joe Biden?

Maybe, if carbon capture and storage is indeed as big a deal as ExxonMobil’s first-of-its-kind deal to extract, transport and store carbon from other companies’ factories implies.

The deal, announced last month, calls for ExxonMobil to capture carbon emitted by CF Industries‘ ammonia factory in Donaldsonville, La., and transport it to underground storage using pipelines owned by Enlink Midstream. Set to start up in 2025, the deal is meant to herald a new stage in dealing with carbon produced by manufacturers, and is the latest step in ExxonMobil’s often-tense dialogue with investors who want oil companies to slash emissions.

The Inflation Reduction Act, passed in August, may determine whether deals like Exxon’s become a trend. The law expands tax credits for capturing carbon from industrial uses in a bid to offset the high up-front costs of plans to capture carbon from places like CF’s plant, as other tax credits in the law lower costs of renewable power and electric cars. 

The Inflation Reduction Act and Big Oil

The law may help oil companies like ExxonMobil build profitable businesses to replace some of the revenue and profit they’ll lose as EVs proliferate. Though the company isn’t sharing financial projections, it has committed to investing $15 billion in CCS by 2027 and ExxonMobil Low-Carbon Solutions president Dan Ammann says it may invest more.

“We see a big business opportunity here,” Ammann told CNBC’s David Faber. “We’re seeing interest from companies across a whole range of industries, a whole range of sectors, a whole range of geographies.”

The deal calls for ExxonMobil to capture and remove 2 million metric tons of carbon dioxide yearly from CF’s factory, equivalent to replacing 700,000 gasoline-powered vehicles with electric versions. 

Each company involved is pursuing its own version of the low-carbon industrial economy. CF wants to produce more carbon-free blue ammonia, a process that often involves extracting ammonia’s components from carbon-laden fossil fuels. Enlink hopes to become a kind of railroad for captured CO2 emissions, calling itself the would-be “CO2 transportation provider of choice” for an industrial corridor laden with refineries and chemical plants. 

An industrial facility on the Houston Ship Channel where Exxon Mobil is proposing a carbon capture and sequestration network. Between this industry-wide plan and its first deal for another company’s CCS needs, ExxonMobil is hoping that its low-carbon business quickly scales to a legitimate source of revenue and profit.

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Exxon itself wants to develop carbon capture as a new business, Amman said, pointing to a “very big backlog of similar projects,” part of the company’s pledge to remove as much carbon from the atmosphere as Exxon itself emits by 2050.  

“We want oil companies to be active participants in carbon reduction,” said Julio Friedmann, a deputy assistant energy secretary under President Obama and chief scientist at Carbon Direct in New York. “It’s my expectation that this can become a flagship project.”

The key to the sudden flurry of activity is the Inflation Reduction Act.

“It’s a really good example of the intersection of good policy coming together with business and the innovation that can happen on the business side to tackle the big problem of emissions and the big problem of climate change,” Ammann said. “The interest we are seeing, the backlog, are all confirming this is starting to move and starting to move quickly.”

The law increased an existing tax credit for carbon capture to $85 a ton from $45, Goldman said, which will save the Exxon/CF/Enlink project as much as $80 million a year. Credits for captured carbon used underground to enhance production of more fossil fuels are lower, at $60 per ton.

“Carbon capture is a big boys’ game,” said Peter McNally, global sector lead for industrial, materials and energy research at consulting firm Third Bridge. “These are billion-dollar projects. It’s big companies capturing large amounts of carbon. And big oil and gas companies are where the expertise is.” 

Goldman Sachs, and environmentalists, are skeptical

A Goldman Sachs team led by analyst Brian Singer called the law “transformative” for climate reduction technologies including battery storage and clean hydrogen. But its analysis is less bullish when it comes to the impact on carbon capture projects like Exxon’s, with Singer expecting more modest gains as the law accelerates development in longer-term projects. To speed up investment more, companies must build CCS systems at greater scale and invent more efficient carbon-extraction chemistry, the Goldman team said.

Industrial uses are the third-largest source of greenhouse gas emissions in the U.S., according to the EPA. That’s narrowly behind both electricity production and transportation. Emissions reduction in industrial uses is considered more expensive and difficult than in either power generation or car and truck transport. Industry is the focus for CCS because utilities and vehicle makers are looking first to other technologies to cut emissions.

Almost 20 percent of U.S. electricity last year came from renewable sources that replace coal and natural gas and another 19 percent came from carbon-free nuclear power, according to government data. Renewables’ share is rising rapidly in 2022, according to interim Energy Department reports, and the IRA also expands tax credits for wind and solar power. Most airlines plan to reduce their carbon footprint by switching to biofuels over the next decade.

More oil and chemical companies seem likely to get on the carbon capture bandwagon first. In May, British oil giant BP and petrochemical maker Linde announced a plan to capture 15 million tons of carbon annually at Linde’s plants in Greater Houston. Linde wants to expand its sales of low-carbon hydrogen, which is usually made by mixing natural gas with steam and a chemical catalyst. In March, Oxy announced a deal with a unit of timber producer Weyerhauser. Oxy won the rights to store carbon underneath 30,000 acres of Weyerhauser’s forest land, even as it continues to grow trees on the surface, with both companies prepared to expand to other sites over time.

Still, environmentalists remain skeptical of CCS.

Tax credits may cut the cost of CCS to companies, but taxpayers still foot the bill for what remains a “boondoggle,” said Carroll Muffett, CEO of the Center for International Environmental Law in Washington. The biggest part of industrial emissions comes from the electricity that factories use, and factory owners should reduce that part of their carbon footprint with renewable power as a top priority, he said.

“It makes no economic sense at the highest levels, and the IRA doesn’t change that,” Muffett said. “It just changes who takes the risk.” 

Friedman countered by saying economies of scale and technical innovations will trim costs, and that CCS can reduce carbon emissions by as much as 10 percent over time.

“It’s a rather robust number,” Friedmann said. “And it’s about things you can’t easily address any other way.” 



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Buyers need a six-figure income to afford a ‘typical’ home, report finds. Here’s how to reduce the cost

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It’s no secret that it’s a tough market for prospective home buyers.

In October, U.S. buyers needed to earn $107,281 to afford the median monthly mortgage payment of $2,682 for a “typical home,” Redfin reported this week. 

That’s 45.6% higher than the $73,668 yearly income needed to cover the median mortgage payment 12 months ago, the report finds.

The primary reason is rising mortgage interest rates, said Melissa Cohn, regional vice president at William Raveis Mortgage. “The bottom line is mortgage rates have more than doubled since the beginning of the year,” she said.

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Despite the sharp drop reported this week, the average interest rate for a 30-year fixed-rate mortgage of $647,200 or less was hovering below 7%, compared to under 3.50% at the beginning of January.

And while home values have softened in some markets, the average sales price is up from one year ago.

“Home prices have gone up substantially, mortgage rates have more than doubled and that’s just crushing affordability,” said Keith Gumbinger, vice president of mortgage website HSH.

Meanwhile, a higher cost of living is still cutting into Americans’ budgets, with annual inflation at 7.7% in October.

How to make your mortgage more affordable 

While the current conditions may feel bleak for buyers, experts say there are a few ways to reduce your monthly mortgage payment.

For example, a higher down payment means a smaller mortgage and lower monthly payments, Gumbinger explained. “More down in this sort of environment can definitely play a role in getting your mortgage cost under control,” he said.

Another option is an adjustable-rate mortgage, or ARM, which offers a lower initial interest rate compared to a fixed-rate mortgage. The rate later adjusts at a predetermined intervals to the market rate at that time.

An ARM may also be worth considering, as long as you understand the risks, Cohn said.

If you’re planning to stay in the home for several years, there’s a risk you won’t be able to refinance to a fixed-rate mortgage before the ARM adjusts, she said. And in a rising rate environment, it’s likely to adjust higher.

Your eligibility for a future refinance can change if your income declines or your home value drops. “That’s a greater risk, especially for a first-time homebuyer,” Cohn said.

Of course, home values and demand vary by location, which affects affordability, Gumbinger said. “Being patient and being opportunistic is a good strategy for market conditions like this,” he said.



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