Americans dance to the beat of their own drummers. And by “their own drummers,” we mean interest rates, the disarming little numbers that quietly dictate the tempo of our lives.
Fast forward four years and the problem has flipped: New mortgages go for about 7 percent and virtually all of us — about 97 percent — pay less than we could get today. This is according to a big honkin’ analysis of a representative sample of more than 14 million mortgages from 1998 to 2023 produced by our fine friends at the Federal Housing Finance Agency, economists Ross Batzer, Jonah Coste, William Doerner and Michael Seiler.
Good interest rates have suddenly became precious. They’re the ultimate bulwark against still-high inflation.
So, who’s got the lowest mortgage rates?
California and Utah homeowners pay just 3.7 percent, while West Virginia and Mississippi pay 4.4 percent — underscoring the reality that higher rates correlate with the usual suspects: low incomes, low levels of education and high unemployment. Folks in those struggling states tend to qualify for higher interest rates, the economists say, accounting for about a third of the gap in mortgage rates. The rest is a matter of timing: folks in struggling states got loans when rates were higher, and didn’t (or couldn’t) refinance.
“This group is slightly disproportionately from lower socioeconomic status groups as these groups are less likely, and in some cases unable, to refinance,” said FHFA’s Coste, whose earnest and careful speech perfectly accents his unruly ponytail.
The best way to snag a killer mortgage rate is lucky timing. Ask anybody who bought or refinanced in 2021. The second-best strategy is to earn a ton of money or have an awesome credit score. At the end of last year, someone with a score of 800 or higher was paying 3.6 on average, while someone with a score of 559 or lower paid 5.8 percent.
In practice, that knocks loose wide gaps along racial and geographic fault lines. Asian Americans on average paid just 3.7 percent, while their Black friends paid 4.4 percent. Similarly, Falls Church, Va., a top-earning enclave carved out of Fairfax County after the Second World War, has an average mortgage rate of 3.4 percent, while folks in parts of the rural South pay more than 5 percent.
Look at states that would pay the lowest rates if they all refinanced today — a financial strategy we strongly discourage — and we see a similar pattern: It’s the high-poverty, low-credit-score states of the South and Appalachia.
There’s one obvious-in-hindsight exception: the youths. They’re least likely to own a house — and thus less able to hold out for better rates before getting a roof over their heads.
To put it another way, if you’re older and have an option other than paying 7 percent on your mortgage, you’re probably going to take it. And that option probably involves staying put — which has thrown a heavy-duty, long-handled monkey wrench into the U.S. housing market.
People with mortgages under 3 percent said they’d be about 60 percent more likely to move if they could hold on to their current rates, a recent New York Fed analysis found.
That’s understandable. You don’t have to be Michelle Singletary to know it makes questionable financial sense to swap a $2,108 monthly payment on a $500,000 home for a $3,327 payment on a $500,000 home.
In a little under two years, our reluctance to give up our ridiculously sweet mortgage deals has prevented 1.3 million home sales, the FHFA economists estimate. That has driven up housing prices by 5.7 percent — negating the 3.3 percent reduction they say rate hikes should have had on housing prices by now.
The states with the lowest rates and highest home values tend to face the most market gridlock. This drives home prices in those states higher still and widens the gaps with the lowest-cost markets — while perversely keeping folks from moving from high-cost to low-cost markets.
Even folks who do everything right, who work hard and save for a down payment, are struggling to enter the housing market without a lucky break.
“Younger people have been carrying considerably more student debt than before while trying to save for a home,” Doerner said. “Essential workers have been priced out of buying in communities because the kinds of homes they could afford aren’t on the market.”
Who does the most online shopping?
When we charted how online retail ate the economy last year, reader William Darron, who you may recognize as the guy who once brought a 50-pound WWII bombsight to novelist Laura Hillenbrand’s doorstep, asked for a deeper dive.
Good news! When measuring school-bus usage, we spotted fresh online shopping data from an unlikely source: the National Household Travel Survey from the fine folks at the Federal Highway Administration.
In 2022, the agency, which is responsible for spotting changes in when and how shoppers and delivery vans use our roads, asked almost 15,000 Americans how often they shop online and how often they return their purchases.
More than 70 percent of Americans age 16 or older buy something online in a given month, and 90 percent live in households that have done so. An impressive 11 percent of us order — on our own — 15 or more online packages, deliveries and visits in a single month. About 21 percent of households do the same.
Garden variety online shopping dominates. About 67 percent of us have bought goods, from tea bags to tourniquets, on websites or apps. Women shop slightly more than men, but people ages 30 through 50 shop the most — and online shopping doesn’t truly settle down until we enter our 70s. (That could be a cohort effect, given today’s 70-year-olds are the last generation to experience the peak online-shopping years of middle age without smartphones.)
Food delivery, on the other hand, is a young person’s game. We’re most likely to hit up Door Dash between the ages 25 and 40. Thereafter, food orders drop rapidly — or at least the online orders tracked in this survey do. Perhaps folks over 40 crave delivery, too, but they’re more comfortable simply dialing up Smoky Mountain Pizza & Pasta when they crave a large Hawaiian with extra pineapple.
Only 9 percent of us ordered groceries online in a given month, making it about half as popular as Uber Eats-style prepared food orders. While most people order more online as they earn more, lower earners are more likely to use grocery delivery than their middle-class friends.
Why? The data shows, predictably, that people without cars are more likely to get food and groceries delivered. (In contrast, rural Americans are just as likely as city folk to shop online, but they’re much less likely to order food or groceries. We assume it has to do with those pesky delivery radii.)
A quarter of us return online purchases every month. The biggest returners are the most educated Americans, but that’s partly because they’re the biggest online shoppers.
Best question we can’t answer
Why don’t we Americans eat more lamb, domestic rabbit or eel? They’re low in calories and rich in nutrients. I do wonder if eel are bottom feeders, however.
— Judith Raunig-Graham in Seattle
We may struggle to answer the why with data alone, but you’re spot on about eating fewer lambs and rabbits!
The American lamb population has been in constant decline more or less since its 1941 peak, according to the National Agricultural Statistics Service (though we reckon that may have as much to do with wool production as eating habits).
Meanwhile, the number of live rabbits on U.S. farms fell by half from 2012 to 2022, according to our old friend, the Census of Agriculture.
Its wetter cousin, the Census of Aquaculture, reports a grand total of seven U.S. eel farms as of 2018. That’s fewer farms than we have for tadpoles (19), snails (15) or frogs (9).
If you’re a tadpole rancher or snail wrangler, we want to hear from you. But eel farmers can hold off: We already found one! A decade ago, Sara Rademaker founded American Unagi in Midcoast Maine. When we asked why Americans don’t eat more eels, outside of the occasional sushi roll, she was stumped, too. They’re a stellar source of vitamin D and a reliable eyebrow-raiser at potlucks.
As for any accusations of bottom feeding, Rademaker said via email, “eels are omnivores in the wild so depending on what stage of life they’ll eat anything from algae to insects to fish. While they live on the bottom, they’re most active at night, hunting within the water column for their meals.”
As Americans urbanize and lose their personal relationship to local fish, “people living in Eel habitats today may have very little awareness of an Eel’s role ecologically and historically,” self-described eel advocates Kristi Leora Gansworth and Christopher Bowser write in Frontiers in Human Dynamics. (The researchers capitalize “Eel” as a sign of respect.)
“Eels are often maligned as slimy, snakelike, and dangerous,” they write. “Despite a long history of sustaining Indigenous societies and newcomers alike, in a contemporary sense Eels have slowly fallen out of culinary flavor at a mainstream level.”
Bowser says that’s an issue of supply as much as it is one of demand. Eels once made up almost a quarter of the fish, by weight, in East Coast streams, research shows. Scientists estimate that we lost nearly 3 out of every 4 from 1950 to 2006, in part due to notorious eliminators such as hydroelectric turbines, overfishing and habitat loss.
But the resilient fish still persists in much of the east, hatching in the Atlantic, growing up in rivers and ending their lives with a one-way suicide mission to spawn in the Sargasso Sea.
Nice to meet you! The Department of Data covets queries. What are you curious about: Who’s most likely to use ride-sharing apps? The most-touristed sites in America? A bends-inducing deep dive into fish farming in America when a new aquaculture census drops in December? Just ask!
If your question inspires a column, we’ll send you an official Department of Data button and ID card. This week’s buttons go to Judith, who asked about eating rabbits and eels, and to William Darron in Fair Lawn, N.J., who tired of our bookstore coverage and wanted to know more about online retail.
