8 Things That Will Cost You More in 2014
After years of tapering talk, it’s a good bet that the Fed will finally start to scale back its Treasury and bond purchasing programs in 2014 as the economy continues to firm up its footing. That change will lead to higher interest rates, which is good news for savers but less welcome for anyone who needs to borrow money. The Mortgage Bankers Association expects interest rates on a 30-year fixed mortgage to increase from 4 percent this year to 4.9 percent next year.
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Most economists agree that the double-digit gains seen in home prices over the past year are unsustainable, but they also expect home prices to continue to rise at a more modest pace next year. The National Association of Realtors expects existing home prices to increase 5.3 percent, and new home prices to see a 5.1 percent rise, while it sees rents growing 2.2 percent.
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Tuition and fees for four-year public colleges for the 2013-2014 school year increased 2.9 percent for in-state students, while the price tag at private schools grew 3.8 percent. That’s the smallest increase in years, but experts expect the upward trend to continue. The portion of that cost borne by students is also increasing, as financial aid and parental contributions decline.
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For those of us who still use snail mail, the price of posting a letter will increase 6.5 percent next year, from 46 cents to 49 cents. The U.S. postal service will also increase the cost of sending international letters, postcards, and packages. The carrier lost nearly $16 billion last year
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Whether in a restaurant or at the grocery store, it’s going to cost more to fill your belly next year. The U.S. Department of Agriculture expects prices to increase about 3 percent next year, whether you eat out or at home. Restaurant costs may go up further thanks to several regulatory and policy trends, including the pushback against minimum wage laws, banks on certain types of packaging and various tax increases.
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The recently approved merger between U.S. Airways and American Airlines may mean higher prices for travelers, as competition among airlines declines and the combined carrier cuts back on some flights. Rising prices may get one more bump, thanks to the Paul Ryan-Patty Murray budget deal reached this week: The deal adds about $11 to the price of a round-trip ticket to cover additional security costs.
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The jury is still out on whether folks purchasing healthcare on the public Obamacare exchanges will pay more or less for their policies. But the verdict is in for those with employer-sponsored plans: Companies are continuing to look for ways to reduce their own rising health care costs, and that means shifting a portion of those costs to workers. In 2014, employees will pay an average of $5,000 for healthcare, including out-of-pocket costs and premiums, up from about $4,500 this year.
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New 2013 taxes will kick in when you pay your tax bill this spring, particularly for high earners. Joint filers who make more than $250,000 or singles making more than $200,000 will pay an additional 3.8 investment income tax and an additional .9 percent Medicare tax thanks to Obamacare. They’ll also see an increase in the highest income tax bracket from 35 percent to 39.6 percent.
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