2014 Year in Review: Mortgage, Solar, and Student Loans
As 2014 draws to a close, our minds are carried back across the year’s major events, across a few important verticals that we cover with our business. It’s been an eventful 365 days, especially if you’re in the mortgage, solar, or student loan industries. Let’s take a look at the top news stories that made an impact on your business this year.
Solar Is Going Strong
Perhaps the biggest, but also least surprising solar-related news item this year is that solar still going as strong as ever, with major incentives from all levels of government combined with reduced costs of technology offering tons of momentum. For proponents of solar power, it’s been a perfect storm of rising energy costs from traditional sources, technological leaps and falling prices in renewable energy, and increased environmental concern.
Solar has continued to grow by leaps and bounds as more consumers aim to reduce their dependence on traditional energy suppliers and switch to clean, green electricity. Back in September, the Solar Energy Industries Association estimated that 6.5 gigawatts of solar photovoltaic would be installed by EOY 2014. The time is ticking on that estimate, but if we’re not there by New Year’s Day, then it won’t be long before we are.
2014 also saw solar energy achieve cost parity with fossil fuel energy. There was a time when going solar was for those who cared enough about the environment to pay a premium for clean energy and piece of mind. This year, many consumers went solar simply for the economic benefits. And while certain tax credits and rebates for solar are slated to expire within the next few years, solar is on track to quickly become the thrifty energy choice, even in the absence of tax incentives.
There have been plenty of big stories, but solar’s prospects in the energy marketplace have also benefited from lots of small stories. Stories like that of Peter Dayton from New Hampshire, whose solar array saved him over $1,600 during the first year, or Dana Woods of San Diego California, who was very pleased to open a power bill that amounted to just eleven dollars and change, after she first made the switch to solar. These testimonials from real people, and other stories just like these may not have a big impact on their own, but taken together, they’re a big part of the reason that solar energy is reaching a tipping point.
Ups and Downs in the Mortgage Industry
This has been a year of ups and downs in the mortgage industry, but the overall trend has been encouraging for prospective homebuyers. In January 2014, the average 30-year FRM sat at 4.58%, but by the end of the year, it had coasted down to 3.96. It’s been on a slight uptick recently, but compared to the rates on offer before the housing bubble burst, these rates are definitely inviting, and bringing all kinds of new prospects into the marketplace for homeownership and existing home refinancing.
And speaking of the bubble, are we over it yet? 2014’s uptick in home values has naysayers claiming rebound effect, with eager investors swooping in to take advantage of undervalued properties. But as that particular feeding frenzy subsides, values are beginning to stabilize at realistic levels. And with slow but encouraging improvement in key metrics such as job growth, we’re cautiously optimistic, as are many rank-and-file consumers.
As far as home-buying conditions go, our current timeframe has a lot going for it. Interest rates are still quite low, but many experts say they’re poised to rise in 2015, outpacing wage growth and making housing less affordable. Home values are expected to experience a measured but noticeable climb over the next 12 months, as well. So those on the fence about staking out their own little corners of the world may want to take advantage of current conditions.
Student Loan Debt: Still an Albatross for Many
Graduating from college is still one of the most important things one can do to increase lifetime earnings and live a comfortable life. That said, attending school has never been more expensive, and student loan debt has become a serious problem for many college graduates. It isn’t just recent grads feeling the squeeze, either.
Recent surveys indicated that 51% of those with outstanding student debt are not making their payments on time, instead opting for deferment, forbearance, or letting their existing student loans slip into default.
President Obama has publicly lamented the high cost of higher education, and back in June, moved to extend the student loan debt relief offered by his “pay as you earn” program to more borrowers. The program caps loan payments at 10% of discretionary income for those who qualify. Certain borrowers, such as those who work in the public sector, may also qualify for student debt forgiveness after making timely payments for 10-20 years.
[Photo Credit: Business Review Australia]
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