ExxonMobil Employees: Rising Rates Join Long List of Housing Dilemmas

While rising interest rates continue to remake the housing market, ExxonMobil employees must be vigilant about adapting their home-buying strategies and financial planning to limit short-term impacts on long-term financial goals, 'says Paul Bergeron, a representative of the Retirement Group, a division of Wealth Enhancement Group.

For ExxonMobil employees, knowing the bigger economic picture will help them navigate these rising mortgage rates and housing costs that will affect today and into retirement, 'says Kevin Landis, of the Retirement Group, a division of Wealth Enhancement Group.

In this article we will discuss:

1. Roaring mortgage rates & home prices affect ExxonMobil employees.
2. Limited inventory and rising costs are among the housing market challenges.
3. Strategies for first-time homebuyers and retirees about the current housing market.

Homebuyers who entered the hot U.S. housing market have seen a transformation. ExxonMobil employees must admit the average 30-year fixed mortgage interest rate jumped from about 3.2% at the beginning of 2022 to 5.3% in mid-May, the highest level since 2009. This increase came after the Federal Reserve raised the federal funds rate - a key benchmark for short-term interest rates - to combat some of the highest inflation in decades. As a ExxonMobil employee, you need to understand why these rates have fluctuated and what their future projections are.

Although mortgage rates aren't directly tied to the Fed funds rate, monetary policy dictates all borrowing costs. The yield on the 10-year Treasury is sensitive to changes in the federal funds rate and also depends on bond market longer-term expectations for economic growth and inflation. ExxonMobil employees can use this information to decide how to allocate funds to treasuries and other assets.

Housing Costs Are Soaring

You might be thinking how buyers have dealt with low inventory, bidding wars, and rising prices for almost two years now - as a ExxonMobil employee. The national median price of existing residences increased 14.8% last year to USD 391,200 by April 2022. Almost seven out of 185 metropolitan areas recorded double-digit annual price increases in the first quarter. Price increases in more affordable small and medium-sized cities outpaced those in more expensive metropolitan markets as more homebuyers took advantage of working remotely. ExxonMobil employees must account for these atypical gains to avoid buying property at an undervalued price.

The market conditions and home values may differ regionally and even by neighborhood in the same city. The ten most expensive cities had median home prices of USD 662,000 in Denver and USD 1,875,000 in San Jose in April. One-half of the nation's ten most expensive housing markets is in California, where there is a persistent housing shortage. ExxonMobil employees must consider the housing shortage when considering buying California real estate and, if possible, wait until prices normalize.

I've seen rent prices go up with home prices as a ExxonMobil employee looking to rent a home. The median rent for 0- to 2-bedroom properties in the 50 largest U.S. metropolitan areas was USD 1,827 in April 2022 - up 16.7% year-over-year. More pronounced increases were in Sun Belt cities like Miami (51.6%), San Diego (25.6%), and Austin (24.7%).

Those looking for a home might be in a tough spot right now - especially prospective homebuyers, renters renewing a lease, and anyone else looking for somewhere to live. Consider this article as you become a ExxonMobil employee and avoid the situation above.

Affordability Is Waning

For those ExxonMobil employees with slim financial resources, rising mortgage rates and property prices have impacted affordability. A USD 300,000 borrower would pay USD 1,666 per month at 5.3%, versus USD 1,297 per month at 3.2% today. Even more important is affordability in high-cost areas and for first-time buyers who have not benefited from gains in home equity. It suggests ExxonMobil employees in high-cost areas do market research and consider other less-expensive and more reasonable locations.

Mortgages originated by borrowers who started a home search and were prequalified by a lender before interest rates spiked may not still be approved. In recent months, demand for lower-rate adjustable-rate mortgages (ARMs) has spiked. An ARM that has a fixed rate for the first three, five, seven, or ten years of a 30-year term before adjusting to market rates might tempt borrowers who expect to move someday and need a lower monthly payment to qualify for a larger mortgage.

Other buyers adjust expectations and settle for a cheaper home. Still, others might give up the search because the homes they want are not affordable, or their dream neighborhoods are out of reach. And as a ExxonMobil employee considering buying or renting a home, you have to understand how many entry-level buyers may be priced out of the market - at least temporarily - because of these ridiculously high prices.

Because purchase contracts are signed many months before the homes are built, buyers of new homes may be particularly exposed to changing interest rates. With their deposits in jeopardy, ExxonMobil employees planning to buy may pay the extra fee to extend rate locks for six, nine, or twelve months.

I also work for a ExxonMobil employee and understand how rising borrowing costs could halt homebuilding demand so as to curtail price increases - and how prices could drop in some overheated markets. Yet most economists do not foresee a collapse in property prices as market fundamentals remain relatively solid. Inventory levels are low, and lenders have been cautious, so most homeowners who bought in the last few years can still afford their mortgages. Cash purchasers include downsizing retirees and investors, who account for about 26% of transactions, are unaffected by interest rates. Assuming the economy and employment remain steady, millennials in their prime home-buying years should be in high demand.

Tips for Bewildered First Buyers.

If ExxonMobil employees will take a mortgage, buying a home would stabilize their housing costs for as long as the payment is fixed, while paying rent indefinitely might not help their finances. Or you could create equity in your home as you pay down your loan balance, especially if the home goes up in value.

No one knows where mortgage rates are heading or what will happen next in the housing market despite widespread speculation to the contrary. So how does a ExxonMobil employee know whether buying a home is financially prudent? As always, the answer is dependent on where you want to live, how you want to spend your time and money. Here are three ways ExxonMobil customers can get ready for homebuying.

Develop into a better borrower. ExxonMobil employees should get a copy of their credit report before applying for a mortgage to catch errors and correct mistakes. High credit scores may qualify for low interest rates.
Collect a down payment. Conventional mortgages require 20% down, but some loan programs allow down payments of 5% to 10%. Should parents or another relative 'gift' cash as a down payment, lenders might ask for a letter of verification as to where the money came from. Local programs might help ExxonMobil employees who earn enough to qualify and who attend homeownership classes with down-payment assistance.

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Figure out what you can afford to spend. Our ExxonMobil customers understand their budgets. Start with online calculators that consider income, debt, and expenses. A mortgage lender can determine how much you could borrow. Real estate transaction costs can be three to five years before they recover, so consider the stability of your ExxonMobil employment and your income.

Bloomberg May 12 & May 19, 2022.

2-3, 7) National Association of Realtors, 2022
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The Wall Street Journal May 5, 2022.
NPR, May 12, 2022.
Wall Street Journal, December 14, 2021.

Added Fact:

Rising Rates Add to Long List of Housing Dilemmas:
Those 60-something ExxonMobil workers and retirees need to understand how rising interest rates could affect their retirement plans and housing decisions. A study by the National Association of Realtors in March 2023 found that 60% of homeowners over 60 have mortgage debt. It means an enormous chunk of this age group could be affected by rising interest rates, which could mean higher mortgage payments and possibly affect retirement savings and financial stability. Age-related issues include evaluating housing options and assessing whether rising rates will affect retirement plans.

Added Analogy:

So the current housing market situation of sky-high prices, low inventory, and rising interest rates is akin to sailing across rough water on a sailing trip toward retirement. Now imagine yourself as a sailor approaching turbulent seas with whipping winds and crushing waves. The housing market is like a body of water - with its moving prices and shrinking options - and rising interest rates are like winds against your financial stability. You must navigate bidding wars and mounting costs while adjusting your sails to reflect the market conditions. As a seasoned sailor looks at wind patterns and charts course to avoid rocky reefs, ExxonMobil workers planning to retire and current retirees need to evaluate market conditions, assess financial potential, and make sound decisions about how to sail toward retirement goals.

Sources:

'How Higher Interest Rates Are Impacting Retirees.' Retirement Stewardship , 20 Sept. 2023, www.retirementstewardship.com/2023/09/20/how-higher-interest-rates-are-impacting-retirees/ .
Malagies, Didier. 'How the Housing Crisis Impacts Your Retirement Savings.' U.S. News & World Report , 9 Jan. 2025, money.usnews.com/money/retirement/articles/how-the-housing-crisis-impacts-your-retirement-savings .
'Nearly Half of Retirees Worry They'll Outlive Their Savings, While 25% Are Burdened by Housing Costs.' DDAMortgage , 9 Jan. 2025, www.ddamortgage.com/nearly-half-of-retirees-worry-theyll-outlive-their-savings-while-25-are-burdened-by-housing-costs .
'Older Homeowners Are Financially Confident Aging in Place.' Fannie Mae , 29 Feb. 2024, www.fanniemae.com/research-and-insights/perspectives/older-homeowners-are-financially-confident-aging-place .
'How Housing Can Play An Important Role in Retirement Security.' Investopedia , Nov. 2024, www.investopedia.com/how-housing-can-play-an-important-role-in-retirement-security-8746025 .

How does the ExxonMobil Savings Plan compare against typical retirement savings plans, and what unique features does it offer that can benefit employees approaching retirement? Additionally, can you elaborate on the necessary steps ExxonMobil employees should take within the savings plan to ensure maximum contributions and employer match during their service years?

ExxonMobil Savings Plan: ExxonMobil's Savings Plan offers flexibility with pre-tax, after-tax, and Roth contributions, and features a 7% company match for the first 6% of employee contributions, a unique benefit compared to typical plans. Employees should contribute the maximum percentage to receive the full match and regularly review their investment allocations through the Voya platform(ExxonMobil_2024_ExxonMo…).

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ExxonMobil Pension Plan: Employees are automatically enrolled and eligible for benefits after five years of service, with full retirement benefits offered at 55 with 15 years of service. The pension is calculated based on 1.6% of final average pay multiplied by years of service, minus a social security offset. Lump-sum and annuity options affect long-term financial planning, with lump sums offering immediate flexibility while annuities provide a steady income(ExxonMobil_2024_ExxonMo…).

In what ways does the ExxonMobil Employee Assistance Program (EAP) support employees during personal or family crises, and what confidentiality measures are in place to protect their privacy? Additionally, how can ExxonMobil employees access these services, and what are the key resources available through this program?

Employee Assistance Program (EAP): ExxonMobil's EAP provides confidential counseling services for personal and family issues like anxiety, addiction, and family conflict. Services are accessible by phone, video chat, or text, with privacy strictly protected. Employees can contact ComPsych for guidance and support through the GuidanceNow app or website(ExxonMobil_2024_ExxonMo…).

With the introduction of Flexible Spending Accounts (FSAs) at ExxonMobil, how do these accounts help employees manage their health care and dependent care expenses more effectively? What guidelines should employees follow to ensure they maximize their tax advantages while complying with IRS regulations during the enrollment process?

Flexible Spending Accounts (FSAs): FSAs at ExxonMobil allow employees to reduce taxable income by contributing pre-tax dollars to healthcare or dependent care expenses. Employees should estimate their expenses carefully during the enrollment period and comply with IRS rules, ensuring they submit claims by April 15th of the following year(ExxonMobil_2024_ExxonMo…).

How does ExxonMobil define "work-life balance," and what specific benefits and programs are in place to support this philosophy for employees? Can you discuss how employees can utilize these options, such as flexible schedules and leave of absence policies, without negatively impacting their career progression within the company?

Work-Life Balance: ExxonMobil promotes work-life balance with programs like “Flex Your Day,” allowing flexibility in work hours, and up to 20 days of back-up dependent care. Employees are encouraged to use these options strategically to maintain career progression while balancing personal obligations(ExxonMobil_2024_ExxonMo…).

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Medical Plan Selection: ExxonMobil offers Aetna POS II and network-only options, allowing employees to choose between plans based on cost, coverage, and provider access. Employees should assess their family's healthcare needs, financial situation, and preferred providers when selecting the most appropriate plan(ExxonMobil_2024_ExxonMo…).

For ExxonMobil employees nearing retirement, what resources are available to help them understand the nuances of health benefits coordination through Medicare and their ExxonMobil coverage? How can they best navigate this transition, and what checkpoints should they be aware of to ensure they remain compliant with company policies during retirement?

Retirement Health Benefits and Medicare: ExxonMobil offers resources to help employees coordinate health benefits with Medicare upon retirement. Employees nearing retirement should explore their options through the Your Total Rewards portal and ensure compliance with company policies during the transition(ExxonMobil_2024_ExxonMo…).

What financial education resources does ExxonMobil provide to employees to promote informed decision-making about their retirement savings and benefits? Can you detail how programs like the Financial Fitness Program enable employees to strategically manage their finances and plan for retirement?

Financial Education Resources: ExxonMobil's Financial Fitness Program, provided in collaboration with Ernst & Young, helps employees manage their finances with resources such as EY Navigate and personalized financial planning. This program supports informed decision-making about retirement and savings strategies(ExxonMobil_2024_ExxonMo…).

As part of the benefits provided by ExxonMobil, how does the company facilitate employee participation in volunteer programs and charitable activities through the ExxonMobil Foundation? How can employees engage with these initiatives while also balancing their work commitments?

Volunteer Programs: Through the ExxonMobil Foundation, employees can engage in charitable activities via the Volunteer Involvement Program (VIP), which offers grants to nonprofits based on time spent volunteering. Participation in these programs is flexible, enabling employees to balance work commitments with volunteer efforts(ExxonMobil_2024_ExxonMo…).

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Contacting Benefits Representatives: Employees can reach out to the ExxonMobil Benefits Service Center at 833-776-9966 during business hours (8 a.m. to 4 p.m. CST) for assistance with retirement and savings plan questions. The Your Total Rewards portal also offers 24/7 access for reviewing and managing benefits(ExxonMobil_2024_ExxonMo…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

ExxonMobil offers a traditional defined benefit pension plan that provides a monthly retirement benefit. Employees can choose between a lump-sum payment or a monthly annuity. The plan calculates benefits based on final average pay and years of service.

Layoffs and Restructuring: ExxonMobil announced plans to lay off approximately 1,900 employees in 2024 as part of its ongoing restructuring efforts. These layoffs are aimed at improving cost efficiency and adapting to market changes amidst fluctuating oil prices (Sources: MarketScreener, Nasdaq). Facility Closures: The company is closing its Clinton, New Jersey facility, leading to the loss of hundreds of jobs. Most affected employees are being offered roles at the Houston headquarters (Source: ROI-NJ). Operational Strategy: The restructuring is part of ExxonMobil's broader strategy to consolidate its North American research and technology operations in Houston, which is expected to enhance research capabilities and drive long-term growth (Source: ROI-NJ).

ExxonMobil provides RSUs that vest over time, offering employees shares upon vesting. They also grant stock options, allowing employees to buy shares at a set price.

ExxonMobil offers a comprehensive benefits package that addresses a wide range of employee needs. For 2023, the company continued to provide robust health insurance options, including various medical, dental, and vision plans. These plans offer extensive coverage for preventive care, major dental services, and comprehensive vision care, including allowances for lenses and frames or contact lenses. Notably, the medical plans also cover telemedicine services, second opinion services, and enhanced fertility benefits. This reflects ExxonMobil's commitment to ensuring its employees have access to high-quality healthcare options that cater to their specific needs. In 2024, ExxonMobil has introduced several enhancements to its benefits offerings. The Employee Health Advisory Program provides professional counseling services for mental health issues, including anxiety, depression, and family conflicts, in a confidential environment. Additionally, the company continues to support employees through a pre-tax spending plan, allowing them to make tax-free contributions to cover eligible health care and dependent care expenses. These benefits are particularly relevant in today's economic and political climate, where managing healthcare costs and ensuring mental well-being are critical. ExxonMobil's focus on comprehensive and flexible healthcare benefits underscores its commitment to supporting the overall well-being of its employees.