Consumer News: There’s been a sharp rise in cars selling for $100,000

Most forecasts see rates leveling off during much of the year

By Mark Huffman of ConsumerAffairs

• Freddie Macs latest Primary Mortgage Market Survey (PMMS) shows the average 30-year fixed-rate mortgage (FRM) fell to 6.15% this week.

• After starting the year close to 7%, the average 30-year fixed-rate mortgage moved to its lowest level in 2025 this week, said Freddie Mac Chief Economist Sam Khater.

• The 15-year FRM averaged 5.44%, down from 5.50% a week earlier, and well below the year-ago level of 6.13%.

Mortgage rates ended 2025 on a gentler note, offering homebuyers a sliver of relief after another year of elevated borrowing costs. Freddie Mac reported that the average 30-year fixed-rate mortgage fell to 6.15% this week, down slightly from 6.18% the prior week. One year earlier, the same benchmark averaged 6.91%.

The decline matters because the 30-year fixed rate is the backbone of the U.S. home-loan market, shaping affordability for millions of buyers. Freddie Macs Sam Khater framed the move as a positive signal heading into the new year, noting rates began 2025 near 7% before sliding to their lowest level of the year in the final week.

The shorter-term 15-year fixed rate also moved lower, averaging 5.44% (down from 5.50% a week earlier), and sitting well below the 6.13% level seen a year ago. That drop is especially relevant for homeowners who are closer to refinancing territorythough most borrowers with older, ultra-low pandemic-era mortgages still have little incentive to swap into todays rates.

Affordability is still an issue

Mortgage rates dont move in lockstep with the Federal Reserves short-term policy rate. Instead, theyre heavily influenced by longer-term bond yieldsespecially the 10-year Treasuryplus expectations for inflation, economic growth, and investor demand for mortgage-backed securities.

Even with the latest decline, affordability remains strained in many markets. A recent Zillow analysis found that to restore typical affordability (mortgage payments below 30% of median household income), the national average 30-year rate would need to fall more than about 0.4 percentage points from levels around the low-6% rangeand in some high-cost metros, even dramatic rate drops wouldnt be enough on their own.

In other words, lower rates help, but prices, inventory, insurance and tax costs, and household incomes also have to cooperate.

The 2026 mortgage rate forecast: modest improvement, not a plunge

Looking into 2026, major forecasters largely agree on one theme: rates may ease, but the back to 5% quickly dream is not the base case. The disagreement is more about how much relief arrivesand when.

There are two big forecasts to watch:

• Fannie Mae: below 6% by late 2026, but not far below. Fannie Maes Economic and Strategic Research (ESR) group has projected mortgage rates ending 2026 around 5.9%, implying the 30-year could dip under the 6% threshold toward the back half of the year.
• Mortgage Bankers Association: A stuck in the 6s outlook.
  

MBAs December 2025 Mortgage Finance Forecast is more cautious. Its table shows the 30-year fixed rate averaging 6.3%6.4% through 2026, with Q4 2026 at 6.4%.

Put together, the range of mainstream expectations suggests 2026 may look less like a rate breakdown and more like a slow driftwith periodic volatility if inflation or the broader economy surprises.

Medicare negotiated prices may fall, but prices of 350 other drugs may rise

By Mark Huffman of ConsumerAffairs

• Medicare beneficiaries could see out-of-pocket prescription drug costs cut by more than half in 2026, according to a new AARP analysis.

• The savings stem from the first round of drug price negotiations under the Inflation Reduction Act, affecting 10 widely used brand-name drugs.

• In contrast, another report shows drugmakers planning price hikes on at least 350 other medicines in 2026, potentially offsetting some broader cost relief.

As millions of Americans start 2026, a new AARP report highlights dramatic savings on prescription drugs for Medicare beneficiaries, while a separate industry forecast warns that price increases on hundreds of other medications may temper overall relief.

According to AARPs latest analysis, out-of-pocket costs for the first 10 drugs subject to Medicares price negotiation program are expected to fall by an average of more than 50% beginning January 1. These negotiated prices made possible by the Inflation Reduction Act of 2022 could save Medicare Part D enrollees an estimated $1.5 billion in total out-of-pocket spending next year.

The negotiated drugs include treatments for conditions such as heart disease, diabetes, rheumatoid arthritis, and autoimmune disorders and cover medications used by nearly 9 million seniors across the country. Under the new pricing, most beneficiaries taking these drugs will see significantly smaller copayments and coinsurance costs, which advocates say will improve access to essential therapies.

More affordable lifesaving medicine

Medicare prescription drug negotiation is on track to deliver billions in savings for Americas seniors starting in January, making lifesaving medication more affordable, said AARP Executive Vice President Nancy LeaMond in a statement accompanying the report.

However, the broader prescription drug market tells a more complex story. In a report released late this week, industry data show that drugmakers are planning price increases on at least 350 branded medicines in 2026, including widely used vaccines and cancer treatments. The median planned price hike is roughly 4%, similar to increases in 2025.

Companies such as Pfizer, Sanofi, and GSK are among those proposing higher prices on a range of products, from COVID-19 vaccines to oncology therapies. Critics argue that these increases could erode some of the gains from Medicares negotiated savings for non-Medicare patients and for drugs not yet subject to negotiation.

Systemic price pressures

Health policy experts contend that while Medicares negotiation program marks a significant shift toward affordability for seniors, systemic drug pricing pressures remain. Partial cuts and negotiated deals do little to address the underlying issue of high list prices, one analyst noted, pointing to the planned price increases.

Looking ahead, the Medicare program plans to negotiate prices on additional medications in subsequent years, with 15 more drugs slated for negotiation in 2027 and further expansions in the years after.

Former head of FTC's Bureau of Consumer Protection named

It's been called New York City's FTC. The NYC Department of Consumer and Worker Protection is a powerful agency whose authority stretches into every corner of the city's life or, to be more precise, can do so if the mayor names an aggressive consumer champion to run the department.

And newly-inaugurated Mayor Zohran Mamdani has done just that, appointing Sam Levine to head the department. Levinewas formerly the director of the Federal Trade Commission's Bureau of Consumer Protection, where he led the FTC's groundbreaking work on junk fees, privacy protection, fraudulent auto dealer conduct, and other critical consumer and worker protections.

"We fight for people who often can't fight back on their own. And when companies are ripping people off or putting kids and teens at risk, there's nothing prudent about sitting on the sidelines," Levine said in farewell remarks to the FTC in January 2025. "There's nothing responsible about hoping someone else, somewhere else, steps in to do what must be done. For an agency like ours, inaction is a choice that has real consequences in people's lives."

Endorsements fromconsumer leaders

Judge rules White House can't cut off funding and states weigh in, saying CFPB is essential to their operations

• Judge rules in favor of laid-off employees of the Consumer Financial Protection Bureau (CFPB)
• Attorneys general from 21 states file suit to force Trump White House to restore funding
• The agency has been essentially closed since shortly after Trump's inauguration

It was one of the most active federal agencies, sort of a contemporary Robin Hood. The Consumer Financial Protection Bureau (CFPB) patrolled the consumer beat, suing businesses that mistreated borrowers and other customers, winning case after case and returning millions of dollars to consumers.

Most consumers were unaware of it and, not enjoying acronyms, usually just scrolled past stories about the CFPB's exploits on their behalf. But businesses and bankers didn't ignore it. They had a strong case of the hates for the CFPB and wanted it gone. When Donald J. Trump took office, their dreams seemed to come true.

Trump named his budget director, Russell Vought, as acting director of the bureau and Vought lost no time firing and layiing off employees and basically putting the agency into a coma. The name was chipped off the building and its offices were largely abandoned. Settlements that companies had agreed to were reversed and manycompanies got their money back, their settlements reversed on grounds consumer advocates called unfair.

But things may be starting to turn around, thanks to two new developments:

1. A federal judge this weekruled in a case brought by the CFPB employees unionthat the White House cannot cut off funding to the agency;and
2. Democratic Attorneys Generals (AGs)from 21 states and the District of Columbia filed suit, asking a federal courtto require Vought to seek State AGs file suit to force CFPB to request funding from the Federal Reserve.

Funding mechanism is questioned ... again

The suit filed by the National Treasury Employees Union had already resulted in an injunction stopping the layoffs while the case worked its way through the courts. Then, earlier this week, U.S. District Judge Amy Berman ruled that the White House cannot stop funding the CFPB, rejecting the Trump administration's claim that the fundiing method is not valid.

When the CFPB was established by Congress during the Obama administration, it was set up to receive funding through the "combined earnings" of the Federal Reserve. The White House has argued that the Fed does not have any earnings since it has been operating at a loss since 2022 as a result of its efforts to combat inflation.

That argument is not new and has been floated in conservative legal circles for years but had never been tested in court, until now. In her opinion, Judge Berman said the White House was using the theory to get around the injunction instead of arguing the case on its merits. Her ruling is likely to be appealed but, for the moment, should result in the laid-off employees being paid.

The states weigh in

Meanwhile, Democratic Attorneys Generals (AGs)from 21 states and the District of Columbia have filed suit, asking a federal courtto require Vought to request funding from the Federal Reserve to operate the bureau.

Opening another front in his effort to unlawfully close the CFPB, DefendantVought has now decided to starve the agency of funds based on the implausibleproposition that Congress, in enacting the Dodd-Frank Act, intended for the CFPBto periodically shut down whenever the Federal Reserves interest expensesexceeded its interest income, the AGs said in their suit.

The AGs argue that, besides the funding question, the CFPB is essential to their efforts to protect consumers, as information about complaints filed with the CFPB are forwarded to the states.

The ban and soda and candy is part of an effort to reduce chronic diseases

• New rules taking effect Thursday limit the foods SNAP recipients can buy in five states, including soda and candy.

• The changes are part of a Trump administration push to curb chronic disease by restricting unhealthy foods.

• Retailers, advocates and researchers warn the waivers could create confusion, stigma and higher costs without clear health benefits.

Starting Thursday, Americans in five states who receive government assistance to help pay for groceries will face new restrictions on what foods they can buy, marking a significant shift in the decades-old rules governing the Supplemental Nutrition Assistance Program.

Indiana, Iowa, Nebraska, Utah and West Virginia are the first states to implement federal waivers banning the purchase of certain foods including soda, candy and other items with SNAP benefits. At least 18 states have applied for similar waivers or signaled plans to do so.

The changes affect roughly 1.4 million people and represent a sharp departure from longstanding federal policy that allowed SNAP benefits to be used for nearly all foods intended for human consumption, with limited exceptions.

A push to reshape food assistance

The new restrictions stem from an initiative led by Health Secretary Robert F. Kennedy Jr. and Agriculture Secretary Brooke Rollins, who have urged states to remove foods they consider unhealthy from the roughly $100 billion program that serves about 42 million Americans.

We cannot continue a system that forces taxpayers to fund programs that make people sick and then pay a second time to treat the illnesses those very programs help create, Kennedy said in a December statement.

Administration officials say the effort is aimed at reducing chronic diseases such as obesity and diabetes, which they link to consumption of sugary drinks and processed foods. The policy is a central plank of Kennedys Make America Healthy Again agenda.

Retailers warn of logistical challenges

Retailers and policy experts say the rollout is likely to be rocky. Industry groups warn that SNAP systems are unprepared for the complexity of the changes, which vary by state and lack clear, standardized lists of prohibited items.

The National Retail Federation predicts longer checkout lines, more rejected transactions and rising frustration among customers and store employees.

A report from the National Grocers Association and other trade groups estimates that retailers will face $1.6 billion in upfront costs to implement the changes, followed by about $759 million in annual ongoing expenses.

Advocates say costs will ripple outward

Anti-hunger advocates argue the added costs will ultimately be passed on to consumers.

Punishing SNAP recipients means we all get to pay more at the grocery store, said Gina Plata-Nino, SNAP director for the Food Research & Action Center.

She and other advocates also say the restrictions risk increasing stigma for people who rely on SNAP, particularly when transactions are denied at the register.

A break from decades of policy

Since the programs creation in 1964, federal law has allowed SNAP benefits to be used for any food intended for human consumption, excluding alcohol, tobacco and ready-to-eat hot foods. The Food and Nutrition Act of 2008 reaffirmed that approach.

Past efforts to restrict SNAP purchases including proposals to ban steak, chips or ice cream were rejected after USDA research found such limits would be costly, difficult to enforce and unlikely to improve health outcomes. Under the second Trump administration, however, states have been encouraged and in some cases incentivized to seek waivers.

The new restrictions differ significantly across the five states.

Utah and West Virginia will prohibit SNAP purchases of soda and soft drinks. Nebraska will ban soda and energy drinks. Indiana will restrict soft drinks and candy. Iowas waiver is the most expansive, barring SNAP use for taxable foods, including soda, candy and some prepared items.

Health impact remains uncertain

While administration officials frame the waivers as a health intervention, research on whether SNAP purchase restrictions improve diet quality or reduce chronic disease has produced mixed results.

Public health experts say the waivers fail to address broader structural issues affecting nutrition.

This doesnt solve the two fundamental problems, said Anand Parekh, chief policy officer at the University of Michigan School of Public Health. Healthy food in this country is not affordable, and unhealthy food is cheap and ubiquitous.

The Agriculture Department says the waivers will initially run for two years, with an option to extend them for up to three additional years. States are required to evaluate the impact of the changes, a process that could shape whether the restrictions expand nationwide.

As more states consider similar moves, the debate over how far governments should go in regulating what low-income Americans can buy with food assistance is likely to intensify.