Are you better off today than four years ago?
With the election just around the corner, you’re probably taking a look at your personal financial situation and asking yourself, “Am I better off today than I was four years ago, or am I worse off?” The facts, below:
Better off: Investors
Worse off: Savers
Remember when the stock market bottomed out in 2009 (On March 9, 2009, the Dow was at 6,547!) and you wondered when — or if?! — we’d ever rebound? Would we ever see 8,000? 7,000? Many frantic investors threw the towel in and panic sold, but if you rode things out/held steady, you reaped the benefits: the Dow is now over 13,000. Savers, on the other hand, aren’t feeling so fortunate: Interest rates on things like CDs, money market accounts and other safe investments, which were well below 1 percent when President Barack Obama first took office, have stayed low. That’s due to the Federal Reserve’s low interest rate policy.
Better off: Home buyers
Worse off: Homeowners
Mortgage rates remain at historic lows (The 30-year fixed mortgage rate is currently at 3.38 percent, according to Zillow Mortgage Marketplace), affordability is off the charts (In some markets, values are down by more than 50 percent) and rents continue to rise. This has put home buyers in the driver’s seat. Did you know that it’s actually cheaper to buy a home than it is to rent in almost every major housing market? That’s what Zillow’s recent breakeven analysis shows. As for homeowners … home values are down, of course — they dropped both before Obama took office, and during — but the good news is that values bottomed out sometime last year/early 2012 and have now been on the rise for eight consecutive months.
Better off: Some workers
Worse off: Other workers
Granted, the stimulus program may not have been popular (namely because it was so costly), but it did save about 3 million jobs. Problem is, that’s a drop in the bucket when you consider that currently more than 23 million Americans are either unemployed or underemployed. And while many were initially hopeful about finding work when Obama first took office, they may not necessarily be feeling that way today. They’ve just fallen too far behind.
Better off: Typical consumer
Worse off: Typical family
Overall, consumers appear to be feeling less fearful than they did when the recession was in full force. But because incomes are down — they fell both during and after the recession — the typical household continues to struggle, particularly as the cost of living continues to rise.
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Vera Gibbons is a financial journalist based in New York City and is a contributor to Zillow Blog. Connect with her at http://veragibbons.com/.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.