Consumer News: Mortgage rates edged higher this week

Here are the risks and benefits

By Mark Huffman of ConsumerAffairs

• Adjustable-rate mortgages (ARMs) often start with lower interest rates than 30-year fixed mortgages, reducing initial monthly payments.

• Borrowers who expect to move, refinance, or pay off their loan within a few years may benefit from an ARM's lower introductory rate.

• Rising mortgage rates and economic uncertainty can make ARMs riskier, since monthly payments can increase significantly after the initial fixed period ends.

As mortgage rates move higher once again, some homebuyers are taking a second look at adjustable-rate mortgages (ARMs) as a way to reduce borrowing costs.

The average rate on a 30-year fixed-rate mortgage has climbed in recent weeks, pushing monthly payments higher and challenging affordability for many buyers. In response, lenders report renewed interest in ARMs, which typically offer lower introductory rates than traditional fixed-rate loans.

But while ARMs can save borrowers money in the short term, they also carry risks that become more pronounced when interest rates are rising.

How ARMs work

Unlike a 30-year fixed-rate mortgage, which locks in the same interest rate for the life of the loan, an ARM starts with a fixed rate for a set periodoften five, seven, or 10 years. After that introductory period ends, the interest rate adjusts periodically based on a benchmark rate and the lender's margin.

Because borrowers assume the risk of future rate changes, lenders generally offer lower initial rates on ARMs than on comparable fixed-rate mortgages.

For example, a borrower choosing a 7/1 ARM may receive a lower rate than a 30-year fixed mortgage, reducing monthly payments during the first seven years of the loan.

The advantages

The biggest advantage of an ARM is affordability. A lower introductory rate can reduce monthly payments and help borrowers qualify for a larger loan. The savings can be significant, particularly when fixed mortgage rates are elevated.

Financial planners often point out that ARMs can make sense for buyers who do not expect to stay in the home long term. Someone who plans to relocate for work, upgrade to a larger home, or refinance before the adjustment period begins may never experience a rate reset.

Some borrowers also choose ARMs when they believe interest rates are likely to decline in the future, allowing them to refinance into a lower-rate fixed mortgage later.

The risks

The primary drawback is uncertainty. Once the fixed-rate period expires, the interest rate can increase, potentially leading to substantially higher monthly payments. While most ARMs have caps limiting how much rates can rise at each adjustment and over the life of the loan, payment shocks can still be significant.

That risk is particularly relevant in today's environment. If inflation remains stubborn or economic conditions keep interest rates elevated, borrowers could face higher housing costs when their loans adjust.

An ARM can also complicate financial planning because future payments are difficult to predict. Fixed-rate mortgages, by contrast, provide stability and protection against rising interest rates.

For risk-averse borrowers or those planning to stay in a home for many years, a fixed-rate mortgage may offer greater peace of mind despite its higher initial cost.

Which loan makes more sense?

The answer largely depends on a borrower's timeline and tolerance for risk.

A 30-year fixed mortgage remains the safer choice for homeowners seeking predictable payments and long-term stability. It eliminates concerns about future rate increases and simplifies household budgeting.

An ARM may be attractive for borrowers who are confident they will sell, refinance, or pay off the loan before the adjustment period begins. However, anyone considering an ARM should carefully evaluate how high their payments could rise under different interest-rate scenarios.

With mortgage rates climbing again, the lower upfront cost of an ARM may be tempting. But borrowers should weigh the potential savings against the possibility of higher payments down the road before deciding which loan best fits their financial goals.

The national average price of regular gas is 16 cents less than a week ago

By Mark Huffman of ConsumerAffairs

• The national average price of regular gasoline fell 12 cents over the past week to $4.42 per gallon, according to AAA.

• Declining crude oil prices tied to reports of possible peace talks with Iran have provided temporary relief at the pump.

• AAA warns that gasoline prices remain vulnerable to renewed increases if geopolitical tensions escalate or ceasefire negotiations collapse.

Heading into the weekend, American drivers are seeing some relief at the gas pump after weeks of sharp increases. Prices have fallen sharply over the last seven days.

However, the Strait of Hormuz remains blocked, bottling up millions of barrels of oil, so it is far from certain that gas prices will continue their downward trend.

According to AAA, the national average price for a gallon of regular gasoline dropped 12 cents over the past week to $4.39, as crude oil prices retreated amid reports of potential peace talks involving Iran. The decline follows a period of elevated fuel costs that pushed average prices near four-year highs during the Memorial Day travel period.

The recent drop reflects easing concerns in global oil markets, where crude prices have fallen in hopes that diplomatic efforts could reduce tensions in the Middle East. Because crude oil is the largest component of gasoline prices, lower oil costs typically translate into cheaper fuel for consumers.

A fragile condition

However, industry analysts caution that the situation remains fragile. Any breakdown in negotiations or renewed conflict could quickly send oil prices higher again, reversing recent gains for motorists.

Much of the decline came after renewed optimism surrounding a potential U.S.-Iran agreement pushed oil prices lower, easing geopolitical pressure on energy markets, said Patrick De Haan, head of petroleum analysis at GasBuddy, writing in the company blog.

In many states, that drop created breathing room after recent price cycles had allowed pump prices to fall again. While oil continued drifting lower over the weekend in hopes of a deal, new CENTCOM reports involving U.S. defensive strikes highlight how quickly the outlook could change. For now, motorists may continue to see some relief, but it remains too early to know how long the decline will last.

Uncertain outlook

Industry analysts say motorists may continue to see modest declines in the near term if oil prices remain stable. But they caution that gasoline prices often lag movements in crude markets and that the summer driving season typically adds upward pressure on demand.

Recent reports indicate that while prices have eased from their May peak, market conditions remain unpredictable.

For now, drivers are benefiting from the first meaningful drop in weeks. Whether that relief continues will depend largely on events far beyond the nations gas stations.

The product contains undeclared kratom-related compounds that may pose serious health risks

By Mark Huffman of ConsumerAffairs

• XD Investments LLC is recalling about 448 boxes of Better Weather Fix Elixir dietary supplements after FDA testing found undeclared mitragynine and mitragynine pseudoindoxyl, compounds associated with kratom.

• The recalled products were sold online between November 2025 and March 2026 and include all lots, flavors, and variations of Better Weather Fix Elixir.

• Consumers are urged to stop using the products immediately because the substances can cause serious health effects, including respiratory depression, addiction, and withdrawal symptoms.

A Houston-based company is recalling hundreds of boxes of its Better Weather Fix Elixir dietary supplements after federal regulators found the products contained undeclared kratom-related compounds that may pose serious health risks.

XD Investments LLC announced a recall of approximately 448 boxes of Better Weather Fix Elixir products, including all flavors and variations, after U.S. Food and Drug Administration (FDA) testing detected mitragynine and mitragynine pseudoindoxyl in the supplements. Neither substance was declared on product labeling.

Serious effects

Mitragynine is the primary active compound in kratom, while mitragynine pseudoindoxyl is considered a more potent derivative. According to the FDA, the compounds can cause nausea, vomiting, rapid heart rate, palpitations, hallucinations, sedation, anxiety, and loss of consciousness. The agency also warned that the substances can suppress breathing and may lead to addiction and severe opioid-like withdrawal symptoms.

The recalled products were sold online through xdeor.com and maxensupplements.com between Nov. 9, 2025, and March 28, 2026. They were marketed in display boxes labeled Better Weather Fix Elixir and Better Weather Fix Elixir Berry.

What to do

XD Investments said it stopped distributing and selling the products on April 1 and removed remaining inventory from the market. The company reported that it has not received any adverse event reports related to the recalled supplements.

Consumers who purchased the products should stop using them immediately and either dispose of them or contact the company for refund information. Individuals who experience adverse reactions are advised to seek medical attention.

The recall is being conducted with the knowledge of the FDA. Consumers with questions can contact XD Investments LLC at info@xdeor.com.

Higher energy costs are spreading throughout the economy

By Mark Huffman of ConsumerAffairs

• The Federal Reserves preferred inflation gauge rose 0.4% in April and 3.8% over the past 12 months, the highest annual rate in three years.

• Core PCE, which excludes food and energy, increased 0.2% for the month and 3.3% year-over-year, remaining well above the Feds 2% target.

• Rising energy prices and continued pressure on household budgets complicated expectations for near-term interest rate cuts.

The Federal Reserves preferred inflation measure accelerated in April, focusing attention on the central banks ongoing struggle to bring price increases back to its 2% target and dimming hopes for near-term interest rate cuts.

The Personal Consumption Expenditures Price Index rose 0.4% in April from the previous month and climbed 3.8% from a year earlier, according to the most recent Commerce Department data. That marked the highest annual increase since 2023.

Excluding volatile food and energy prices, the core PCE index increased 0.2% in April and 3.3% year-over-year. Economists and Federal Reserve policymakers closely monitor the core reading as a better indicator of underlying inflation trends.

The April figures showed some moderation from Marchs sharp monthly increase, but inflation remains stubbornly elevated. Energy prices played a major role in the latest rise, with gasoline and electricity costs climbing, as geopolitical tensions pushed oil prices higher.

The PCE index is considered the Feds preferred inflation gauge because it captures a broader range of consumer spending patterns than the Consumer Price Index and adjusts as consumers change buying habits.

Household finances under pressure

The inflation report also pointed to growing pressure on household finances. The personal saving rate fell to 2.6% in April from 3.2% in March, while inflation-adjusted disposable income declined from a year earlier, suggesting consumers are increasingly relying on savings to maintain spending.

Financial markets reacted cautiously to the report. Investors have been looking for signs that inflation is cooling enough for the Fed to begin lowering interest rates later this year, but the latest data may reinforce the central banks wait-and-see approach.

Federal Reserve officials have repeatedly emphasized that future policy decisions will depend on incoming economic data. With inflation still running well above target, economists say policymakers are likely to remain cautious despite signs of slower economic growth elsewhere in the economy.

Gross domestic product growth for the first quarter was revised down to 1.6%, adding to concerns that consumers and businesses may be losing momentum as higher prices continue to squeeze purchasing power.