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The Clark Howard Podcast
02.06.26 Clark Answers His Critics on Clark Stinks / Housing Market Predictions
00:38:05
Clark Answers His Critics on Clark Stinks / Housing Market Predictions
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- [00:00]
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- [01:05]
Clark Howard
I'm so glad you're with us here on the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you so you make better financial decisions in your life. And it's everyone's favorite time of the week. It's Friday, so the weekend. And also it's Clark Stinks time. After I hear how I've gotten it all wrong, I'm going to do something that you may have to write into Clark Stinks about. Next year, I'm going to give you a prediction about the housing market through the rest of 26. But now it's time for Krista to read Clark Stinks. I should have never encouraged you to speak much. Think I'm pretty stupid.
- [01:53]
Krista
You should be ashamed of yourself.
- [01:54]
Clark Howard
Well, maybe I'm wrong.
- [01:56]
Krista
Maybe I'm wrong.
- [01:56]
Clark Howard
Maybe you're right, pal.
- [02:03]
Krista
Okay, this is from Bonnie in Missouri. She says every year you miss the mark. You never talk about IRS free fillable forms. This is not the free file guided software option. It's different and it's free. This is not income based. It has all of the forms for free. It's browser based. It's like the paper forms you fill out online yourself through your browser. Look up IRS free fillable forms and use the correct terminology. It is free fillable forms by name. I tried to provide a link but the form isn't allowing me to paste.
- [02:38]
Clark Howard
It's not allowing you to paste free forms. Okay, so let me explain this. I Never really talk about the free fillable forms available@irs.gov because overwhelmingly people file electronically. Now. There are reasons that people need to file a paper return or prefer to do that. And you're right, this is a free way for you to do that. As for IRS Free file the program, you said that I'm the only one I talk about. It's now live, obviously for filling out 25 tax returns and different private software providers participate in this IRS program. You go to irs.gov you click on free File and then you'll be able to see based on your income and your state, what's available to you for free. Up to a certain income level, you'll be able to file your return for free. And depending on the provider, if you're in a state with the state income tax, you may be able to file that for free as well.
- [03:46]
Krista
Okay, this is from Alex in Florida. Clark writes to not buy travel insurance from a cruise line or tour company. I'm a travel agent and have provided independent company travel insurance through companies like alliance and the cruise lines. In my opinion, the main reason for travel insurance is for the medical coverage. Many of our clients are elderly and getting single trip coverage is very expensive and an annual plan is very affordable but will not provide cancel for any reason coverage. And the timing of the purchase is tricky. Can you provide specific examples of where a cruise line did not cover what they said they would? And I'm going to read one more real quick because it's also related from Mark in Florida. Well, I don't think you stink, but I would have expected you to know more regarding travel medical insurance. This is a hack. Yes, most of the providers insure my trip included now only bundle it with travel trip insurance. The way around this is to value the cost of the trip to one or two dollars. Some have a minimum of two dollars and others don't. That way you're only paying for the medical part.
- [04:48]
Clark Howard
Thank you both for both of your posts. All right, so why is it I say not to buy trip coverage from a tour operator or a cruise line? Because unfortunately a number of smaller cruise lines have folded of late and tour operators, no matter how long they've been in business, are always kind of living on an edge and they do regularly go out of business. The trip coverage they sell does not cover you because it's not real insurance. Usually in the event they fold your money, your deposits, your final payments, all of it just goes up. Poof, it's gone. That's why I want when you buy trip Insurance to buy it from an independent insurance company that's selling a trip insurance policy that covers supplier default. Now unfortunately, there have been so many failures that a lot of trip insurance providers no longer cover a supplier failing. So you got to make sure if that's one of the things you're trying to insure against that you have it. Now let's go to the separate issue and that's medical. So with an aging population, it is a great idea, particularly as people get older, they may take more trips each year that are, that are big, exciting trips to buy an annual medical insurance policy that both posts kind of alluded to or spoke to. Annual medical travel policies are great because your US based health insurance generally will not cover you outside the United States. And buying an annual is much cheaper than buying a per trip policy. And I appreciate that suggestion for somebody buying a per trip about saying that the value of the trip is one or two bucks. So you can then buy a one time use medical policy when you're not interested in the other features of trip insurance.
- [06:54]
Krista
Dave in Indiana says not a Clark stinks, but a prostate cancer stinks. Clark's updates on his health have brought an awareness to me and many others of prostate cancer. A recent common blood test for life insurance change showed that I had a concerning PSA number. I've since had surgery and I'm well into my recovery. Between Clark's great financial advice, life insurance in this case, and his bringing awareness to the silent killer of men, I believe Clark had a hand in changing my future. Pretty sure I'm going to save more and spend more for many years and spend less. Well, I said spend more and, and I owe Clark for that. Guys, get your PSA tested. Thanks again, Clark, for all you do. You and your team make a difference. I just thought that was nice.
- [07:37]
Clark Howard
Yeah, I appreciate that. And so let me, let me move from what we normally talk about to men's health. Men tend to ignore their health. And the death rate from prostate cancer had the largest decrease in mortality of any cancer. The deaths fell 50% and just right at about 20 years. I mean, a miraculous change with the cancer. But that has now leveled off and started to rise again because men are not getting tested. And there's been some confusing information on the Internet that said don't do this, don't get tested. You're going to be fine until you're not. And as you said in your post, prostate cancer is a silent killer. Now if you are diagnosed with prostate cancer, a lot of men diagnosed have an early form of it that only needs to be watched. Active watch. If you are somebody who, who doesn't need surgery like we heard about from Dave, what you do is you go into an active watching program, used to be called active surveillance. And you do not miss your milestones to watch it. And you may only need to be monitored, which I've been fortunate to have as my path for now more than 17 years. I've never had to have radiation, chemo surgery, anything. I've just been in an active watching program with some meds that I'm on for it. I've been just fine. But I've kept up with all my testing and guess what? But my doctor is now retired. I've outlived my doctor's career and I'm having to do new patient intake and all that.
- [09:38]
Krista
Awesome. Okay. Seth in Indiana says, Clark, you usually hit the mark, but this time you stink like one of baby Clark's dirty diapers. You recommended a young listener open a Roth IRA at Fidelity and use their target date funds. But caution them that there are two of them, index and active. This is incorrect and I think it'd be more helpful to let listeners know. Fidelity has five target date funds, making it even more complicated for new clients. For example, for 2030 they have the Fidelity Freedom 2030 Fund, Fidelity Freedom Index 2030 Fund, Fidelity Sustainable Target Date 2030 Index Fund, Fidelity Managed Retirement 2030 and Fidelity Freedom Blend 2030 Fund. Not only that, but if you use Fidelity's fund screener tool, it will show you all of those five funds of which the only one that gets Fidelity's gold star next to it is their own. And then fund pick from Fidelity is the blended one with an ER of 0.46. Krista, make sure Clark isn't drinking something when you read that part. Just a suggestion to be very specific in the future. They do have zero hand holding on this one.
- [10:40]
Clark Howard
Thank you very much. And you just taught me something because I wasn't aware that Fidelity was having their target funds have babies and there's now five of them. That is crazy. Now one of them you mentioned the managed, the 2030 managed. That is the kind of thing that I have not been recommending. I want just the simple Fidelity Freedom Target Date Index Fund. That's the one. The simplest, lowest cost of the five of them. And that is my opinion advice and historic data shows that you want to be in the lowest cost index type version of a target retirement fund. Wherever you do get that.
- [11:30]
Krista
Tim in Ohio says, Clark, love your show, but you stink like my teenage son soccer cleats. You tell people to hoard money in their hsa, which is great because they are the most tax advantaged account around, but you discourage folks from using that money for current medical expenses. Remember that HSA funds aren't the best as an inheritance. All of the money in the HSA is taxable income for the beneficiary in the year of death. For reference, I max my HSA every year, but I go ahead and use that money for current medical bills. My HSA is still growing nicely. Bonus. I don't have to keep receipts long term.
- [12:03]
Clark Howard
Thank you for that. And actually almost nobody. It's a very slim percent of people that invest their HSA money, number one and number two, defer the use of it for years so the money can grow, accumulate tax free and be spent tax free. You mentioned the receipt thing. So if you keep your receipts over the years, you can do look back and claim against money from decades before, but you're doing it with dollars that hopefully have grown quite nicely over the years. You mentioned absolutely correctly that an HSA is not like a Roth, that a Roth is a great asset to inherit HSA and a traditional 401k or IRA. Terrible assets to inherit. So I am thinking on the basis of how long the average person lives that they'll get into retirement years when they've got a lot more medical expenses. And that's the sweet spot for using HSA money. But if somebody dies prematurely, then my advice has egg all over it.
- [13:20]
Krista
Okay, Eric in South Carolina says I want to share my experience with car insurance tracking devices. While you promote them as one way to lower your costs, I see them as a way for insurance companies to cheat you out of additional discounts. I've had these installed with three different companies. Each promoted discounts for safe driving. However, with all three, they determined I was an unsafe driver because of quote, unquote hard braking. I hit the brakes to avoid a driver who failed to yield. Ding. I hit the brakes to avoid a car coming into my lane. Ding. To avoid a child running into the street, a deer crossing the road, or stopping to avoid going through a yellow light. Ding. Ding ding. So what they call risky hard braking, I call defensive driving. Please make sure your listeners are aware these are marketing ploys. And don't bet on receiving your additional discounts because you let these companies track your every move. Finally, be careful of phone apps that track your movements. If you're a passenger in someone else's vehicle, the app may determine you're the One behind the wheel. For the most part, you do provide sound advice to your listeners.
- [14:21]
Clark Howard
Thank you. And I'm really interested. And, and we've addressed this last one, that there are apps that surreptitiously are selling data to insurance companies that we have on our phones. This came up with General Motors selling people's personal data to auto insurers. And yes, one of the flaws in it is you could be a passenger in somebody's vehicle, the app thinks you're driving, your friend is not a good driver, or your family member drives very aggressively, and then you get punished on auto insurance. That is really terrible. And the lack of disclosure of apps doing this is something else. Now, on the core of what you talked about, this thing of using the devices that track how you drive from an insurer and they promise you won't pay more, but you might pay less, there's a lot of lack of trust in these apps. And that's why I've been excited more recently by insurance that instead of tracking your driving, only tracks how many miles you drive, figuring that if you're not on the road, you can't cause an insurance claim. And that is a viable alternative that I hope grows in the marketplace that more people would trust.
- [15:41]
Krista
Pete in Massachusetts says, hey, Clark, you had someone on Clark Stinks that said they could get a better rate on a C day at a bank than at a brokerage. But one thing about this you didn't mention is when the banks auto renew CDs, if you set them to auto renew, sometimes they'll be renewed at this absolutely horrible rate. When you set them to auto renew at a brokerage, usually they'll be at a competitive rate.
- [16:01]
Clark Howard
What a great, great post. And I so should have mentioned that when this came up before, that one of the really terrible practices that banks engage in is where they count on your inertia. So they might sell you a CD at what is a really good rate in the marketplace, knowing that you'll auto renew when that CD comes up in a year. Most CDs people buy tend to be for a year and you don't notice. And the rate may go from 4% to 0.4% at renewal. So you absolutely, if permitted, do not want to auto renew any bank or credit union cd.
- [16:51]
Krista
Okay, Doug in Minnesota, Doug says Clark stings like a skunk in the distance because he gave a good explanation of why it's beneficial to wait on Take Social Security if you can afford to. However, he failed to mention one of the most important reasons for waiting to take Social Security, which is if you're married, it's very likely that at least one of you will live past the break even age of 83. Therefore, don't just think about yourself, but also think about how delaying will benefit your spouse. If the higher wage earner delays Social Security, the surviving spouse will receive the higher benefit for the rest of his or her life. So maybe you won't make it to the break even age, but think about what a great gift it will be to be to your surviving spouse to have approximately 30% higher monthly payment. And so many wroten about Social Security thinking you're wrong to say wait. They're just a lot, a lot, a lot of post people glad they didn't wait.
- [17:42]
Clark Howard
We could, we could do Every time I talk about Social Security and the optimum time to receive your first check, well, it's not really a check now. Direct deposit. We could do three Clark Stings just from the post. People are very sensitive about the whole thing of when to take Social Security. The reality and where you hear me come from with the advice is if you can afford to wait. The big risk with Social Security is not that you die too soon, is that you live longer than you expect. So later in life when you're not capable of working, you're receiving a much, much smaller amount of money every month from Social Security than you would have if you waited earlier in retirement, semi retirement, you can work part time. You can actually not retire as soon and work a little longer and improve your long term financial picture. So that's why I have such a bias towards waiting. Because it's not when you're in your 60s or 70s I'm worried about. It's when you're in your 80s, 90s or past 100. That's what I'm really worried about.
- [18:59]
Krista
All right, we're going to end on that note.
- [19:01]
Clark Howard
We are.
- [19:02]
Krista
We are.
- [19:03]
Clark Howard
Okay, so again, if you just got fired up and you can't believe I again.
- [19:09]
Krista
No, no, no, no, please don't. There's just way too many.
- [19:13]
Clark Howard
Don't post security. No, don't post about Social Security. Post about other things that you feel I'm off base on@clark.com Clark stinks. And coming up ahead, plenty of material for Clark stings. I'm going to give my 26 predictions, not 26 different predictions. My predictions for 26 on how I see the housing market shaking out through this year.
- [19:42]
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- [20:13]
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- [20:21]
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- [20:22]
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- [20:36]
Don McDonald
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- [21:27]
Krista
Just search for Talking Real Money.
- [21:30]
Don McDonald
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- [21:37]
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- [22:42]
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- [22:49]
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- [22:50]
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- [23:05]
Clark Howard
Okay, now I'm just going to step right in it. I'm going to tell you where I feel the housing market is here in 26. And the housing market is not a market. There are micro markets even within a a very large expansive metro area. There are differences from one zip code to another. So I'm only talking about trends, being your friend or your foe and something that's clear as could be when I review data around the country that as we sit here in 26 through the housing market, this is what I call a transition year. We have been through several years where it's been so bad ugly for a first time home buyer that the average age of a first time home buyer is the oldest it's ever been in since stats started being kept. And that's because it feels like an impossible thing and not part of the American dream for somebody trying to buy a first time home to buy one. Well, this is the year that there's a clear shift underway. For the first time in years and years and years there are far more sellers in the marketplace than there are buyers. People that closed on Homes 2H25 overwhelmingly had to cut prices from what they initially asked to get a home sold. They were having to give buyers more incentives, pay more fees for them. I mean, you name it, they were having to do all those things to get their house sold. Another trend, far higher percent than historically normal buyers under contract walked away and did not go through with purchase. That's another sign. I mean think back. We've had various times over the decades and particularly early this decade where buyers were so desperate to buy they were writing personal letters to sellers saying pick me, pick me. I waive inspections, I waive this, I'll pay all closing costs, everything. Because the balance was so heavily tilted towards sellers over that Is over. Now, as I mentioned, there are lots of micro markets in the United States. And what I'm talking about does not apply in certain zip codes in Boston, certain places in the Northeast, some zip codes in the Midwest. But other than these rare exceptions, these things I'm saying apply more or less everywhere else in America. So you as a buyer who gave up and said, looks like I'm going to be a renter forever. This is the first year, year since the hopeless thing for a buyer has come to an end. And the conditions are going to continually improve as best I can see for buyers looking forward over the next three, four years, which is as far as it would make sense to look forward. Here's why. Home prices have stalled out. And that means every year, as we get puny raises or advance in a career, get promoted, whatever, we will be spending less of our disposable income to buy a home than we would have in the last, let's say three years. Those conditions are improving towards a buyer. Plus, there was a lot of pent up non sales. What do I mean by pent up non sales? There were a lot of people who historically would have sold their homes and haven't, didn't, because factor number one, they had really great mortgage rates on whatever they were in. Two, there are a lot of people that are older who would have moved on to different housing, smaller housing, townhouses, high rises, whatever, who've stayed in very large homes, relatively speaking, that they raised kids in. Maybe kids are gone and grown and they've stayed put in those houses because they didn't want to give up whatever cheap mortgage they had, or they own it free and clear and when they look at what they could buy if they sold that, they were unhappy at what that was going to cost. A frozen housing market, the market is clearly going through a thaw for so many different reasons. Somebody may have passed away, a couple may have gotten divorced, whatever. People may have gotten jobs somewhere else because there's a big job rotation geographically going on in the country that I talked about. I think back in December, it was a while back. And so people are selling who weren't, who would have historically been. So the inventory is totally in favor of buyers now. Plus one other factor. It's clear that the administration is going to do what they can to try to manipulate mortgage rates down. They're already down some and mortgage rates are going to be more favorable as well. Builders of new homes are offering enormous incentives to get the new homes they built sold. If you do take advantage of A new home build where so much of the value to you is in having a subsidized mortgage rate, that kind of thing. When you buy that new home, you may be overpaying for the purchase price, but your effective cost of ownership is lower because the various subsidies that needs to be a purchase where you intend to stay a decent while. Because a lot of people who bought new homes with builder incentives have found when they go to sell that what they owe on the home, even though their monthly payments have been more affordable from a subsidized mortgage, what they owe on the home is more than what they can sell it for. Now, you don't want to be in house lock because of that. So if you do buy in a new home community where the real deal is from the purchase, subsidies on the mortgage and other things, you need to feel confident and comfortable that you can stay in that home for probably a minimum of about seven to eight years. And there's a lot more I could talk about with this. I could talk about the housing market for, oh, an hour and a half and everybody would be asleep.
- [30:25]
Krista
Well, I don't know. Most of us are interested in that, so.
- [30:28]
Clark Howard
But it is a, a clear shift and I really think you're going to see a trend that is going to get stronger and stronger in 26, 27 and 28, where the people who held on and did not sell for various reasons are going to sell in the marketplace, which is going to help with what those purchase prices end up for buyers.
- [30:52]
Krista
Shannon in Montana wrote into you and she said, I watched the podcast on YouTube about umbrella insurance and decided that my husband and I should get a million dollars worth. The 380 a year is cheap insurance today. When I contacted my independent insurance agent, they asked if I wanted it for my auto or for my house. I'm confused because I thought one umbrella policy covered everything. How many umbrellas does one need to carry? I was quoted a cost of almost $600 a year.
- [31:19]
Clark Howard
Okay, I'm totally befuddled because I have never heard of a circumstance where the umbrella was not written in a way that it covered as an overlay for liability on your home, your auto, other things that might be in your life, potentially, if you've got a, a speedboat, a motorcycle, whatever, that the umbrella is designed to be just what you said, an overlay. So I'm, I'm totally befuddled and I'd appreciate if we hear from insurance agents under what circumstances somebody would have to buy more than one umbrella because your post is the first time I've ever heard that in 39 years. Okay, doing this.
- [32:12]
Krista
All right, I have a couple of phone questions for you here. Joe in New York says, I'm looking to switch from T Mobile to Mint Mobile. Are there any issues with traveling mostly in Europe? Also, Scott in Pennsylvania said, Clark, given how dependent we have become on our phones and since you're an experienced traveler, do you carry a spare phone when you travel? If so, any general recommendations for a spare so, such as equipping it with a prepaid sim, setting it up with Google Voice for calls and text via WI fi, foreign travel considerations, etc.
- [32:42]
Clark Howard
So, yes, I do have an older phone that I travel with as an emergency phone if my phone gets stolen, breaks, whatever. And this came in very handy when my wife and I were going on a 10 day international trip and she was on an escalator in the airport leaving to go on the trip. Dropped her iPhone in a protective case, by the way, and it shattered. And so fortunately I had the backup phone. But she's all iPhone all the time. She had to use an Android for 10 days. She complained and complained and complained, but she had a phone. So I do always travel with an emergency backup phone. Now, the first question was about Met Mobile. All right, Cement Mobile has a very good international travel pass that sold by number of days. And the most popular product they have I think is 10 days for 20 bucks. I think is what it is. And you get so many texts, hundreds of texts and hundreds of voice minutes and you got plenty of data for a 10 day trip. Now we have a woman named dallas@clark.com who uses all these different products for us and posts reviews. She could never get the Met International pass to work when she was on an international.
- [34:15]
Krista
It's called Minternational Mentor National.
- [34:17]
Clark Howard
Isn't that cute? And we don't know exactly why, but this was a year ago. Hopefully the bugs are all worked out and we should have Dallas try that again and see if Mentor national works next time she goes overseas.
- [34:34]
Krista
But and she said she wondered if maybe because they purchased it once they'd arrived overseas, she was wondering if maybe she purchased it before she left. It would have worked.
- [34:42]
Clark Howard
Yeah, who knows? But what I do when I'm overseas for an extended period of time, I take the second phone and buy a local sim. That is the cheapest way, if you're overseas for multiple weeks past two, to use international service on a phone. And a lot of phones now will take two sims and you can even do it. Your principal phone where you have your traditional cell phone service and then you have a local sim that you put in mostly their electronic sims now and is by far the cheapest way for you to stay in touch and do things overseas. Something else. If your iPhone, you think imessage, Imessage, Imessage. When you travel overseas, if you're an iPhone person, make sure you have a WhatsApp account. Because WhatsApp now dominates communications with travel suppliers and with people with restaurants, hotels, you name it outside the United States. So you want to have a WhatsApp account unless you go to China when you need to have one of their proprietary messaging apps in China.
- [35:56]
Krista
Bonnie in Ohio says, my spouse and I are headed to Italy in September of 26th. Currently our hotels are pay on arrival in euros. With the dollar sliding recently, I'm tempted to prepay now to lock in the current exchange rate in case the dollar weakens further by autumn. Is it ever wise to prepay international hotels to hedge against currency fluctuations or is the risk of a non refundable booking too high? We use a no foreign transaction fee card.
- [36:22]
Clark Howard
Okay, so you're giving me an either or that I'm not especially thrilled about. I'm going to give you another way to think about it. Instead of looking at for a trip all the way in September, do I book a non refundable hotel this far in advance? I never like non refundable hotels unless I'm going somewhere that day or the next day. I just don't do them. So what you can do, because clearly the goal of the Trump administration has been to devalue the dollar and they've signaled that in the marketplace so much and we've seen drops in the dollar. Now, just because an administration says they're gonna trash the value of the dollar, often the marketplace will intervene and they will fail at that because economies are so big. But that is the intention of the administration is to trash the dollar. And there are, there are specific trade reasons that that's the goal. So what I would say for a trip in September, you book a prepaid hotel room. Refundable prepaid hotel room. You can do this with booking.com priceline.com you can do it through the various travel credit card programs like the Chase Sapphire Reserve Hotel Booking program, the American Express version, the City program, the Capital One hotel program. You can do it through any of those and you may even get a 300 credit for booking your hotel through one of their travel portals. And just make sure whatever hotel you book for September is refundable. Then what happens next is that you re shop that hotel in August early September or hotels and if the rates have gone down from what you booked now in February for September you just cancel those bookings and you rebook at the then prevailing lower price. The only thing I would not do at all is your either or booking anything non refundable even if it's tempting because right now it may be 10% cheaper to book the non refundable versus the refundable hotel booking. Gosh that was a lot stuff about hotels but I work my hotel bookings so hard at my car rental bookings, my flights I'm always looking after I booked for a better deal and overwhelmingly I get one closer to travel. If it's not lower I keep what I got and thank you so much for joining us today. I hope that the weekend ahead is a fantastic weekend and we are serving you all weekend long@clark.com clarkdeals.com with our newsletters and everything we do, everywhere we do it is all about your empowerment with knowledge so you can save more, spend less and avoid getting ripped off. And again enjoy that weekend.