CBS News
Electricity prices are on the rise. Is it inflation or an underlying issue?
The sun is burning a hole in Americans’ wallets. Back-to-back months of heat records and sweltering days have contributed to rising electricity costs, and experts say that without action, it’s a problem that will likely only get worse.
According to CBS News’ price tracker, the cost of electricity has increased from $0.14 per kilowatt hour in 2019 to $0.18 per kilowatt hour in 2024 — a change of more than 28.5%. The average American is now paying nearly $300 a month just in utilities.
For many people, it just isn’t affordable.
“Sometimes I have to choose whether I’m going to pay the light bill or do I pay all the rent or buy food or not let my son do a sport?” Stacey Freeman, a 44-year-old North Carolina mom told KFF Health News.
Her energy bills have cost her hundreds a month, even as she relied on window units and space heaters in the summer and winter.
Freeman’s situation is known as “energy poverty,” or the inability to afford utilities to properly heat or cool their home.
A 2022 study published in Nature Communications found that 16% of U.S. households experience energy poverty, which researchers defined as spending more than 6% of household income on energy expenditures. It’s not a problem solely for those who are considered low-income. The study found that 5.2 million households that live above the poverty line face this issue, with Black, Hispanic and Native American communities feeling a disproportionate impact.
“Energy inequity is an issue of increasing urgency,” the study says. “…creating a federal energy poverty line would be a critical step in identifying families that face large disparities in access to affordable electricity and energy in the U.S. and improve programs’ abilities to address energy burdens.”
The cost of electricity is based on a multitude of factors, including the volatile prices for natural gas, wildfire risk, electricity transmission and distribution, regulations and, the one factor Americans know all too well, inflation. But experts say there’s an underlying problem that, unlike inflation, isn’t going away anytime soon — the heat.
An unreliable national grid
Recent years have seen back-to-back heat records across the world, including in the U.S. Rising temperatures fuel extreme weather events, such as heat waves in the summer and snow storms in the winter, which then increases energy consumption as people try to keep their homes warm or cool. It also increases the costs for the utility companies themselves to make sure that the electric infrastructure can handle it.
Currently, it can’t.
Power outages remain a major problem across the U.S. When Tropical Storm Ernesto passed by the U.S. Virgin Islands and Puerto Rico earlier this month, it knocked out power to hundreds of thousands of residents. At one point, nearly half of Puerto Rico and almost all of USVI were without electricity.
But it’s not just the islands — it’s the mainland too. Of all the major power outages in the U.S. from 2000 to 2023, scientists at the nonprofit Climate Central found that 80% were because of weather.
Climate Central
Every four years, the American Society of Civil Engineers issues a “report card” on how U.S. infrastructure fares in a variety of categories. In the latest report, the energy sector received a C-.
Engineering experts acknowledged that spending on transmission lines had grown and that utilities were being proactive about strengthening the national grid, but said that “weather remains an increasing threat” that is continuously causing power outages. Transmission and distribution systems are a major concern, they said, and “is likely to accelerate as the impacts of climate change persist and the public’s expectation of more reliable, ‘always-on’ electricity increases.”
“While the weather has always been the number one threat to the energy sector’s reliability, climate change has only exacerbated the frequency and intensity of these events and associated costs,” the report states. “The Department of Energy (DOE) found that power outages are costing the U.S. economy $28 billion to $169 billion annually.”
Multiple polls and studies show how pervasive energy poverty and the heat can be. An early August poll by The Associated Press-NORC Center for Public Affairs Research found that 39% of Americans say that heat has had a “major impact” on their electricity bills, with another 30% identifying a “minor impact.” About 40% of poll takers say they also had unexpected utility expenses because of extreme weather events, including storms, flooding, heat and wildfires.
The heat isn’t just costly, it’s also dangerous. Extreme heat is the No. 1 weather-related killer in the U.S. and is known for exacerbating cardiovascular and respiratory conditions. The cold is also a concern, with the EPA reporting that more than 19,000 Americans have died from cold-related causes since 1979.
“Not only are households living in more poverty and closer proximity to highly polluted areas at greater risk of adverse health impacts,” the 2022 Nature study says. “They must also consume more energy to overcome the particulate emissions, which, themselves, reduce the efficiency of clean sources such as solar panels.”
A solution for cheaper energy
Experts say there is a long-term solution that can drastically help — clean energy.
In 2023, about 60% of U.S. electricity generation came from the burning of fossil fuels, one of the primary drivers of rising global temperatures, according to the Energy Information Administration. Renewable energy has hit record highs, but last year, it was only used for 21% of electricity generation.
A March 2020 study found that the continued warming of the planet could take a significant toll on U.S. energy infrastructure as-is. Specifically, the study found that the most costly aspects will be the reduced lifespan of substation transformers and the increased need for vegetation management expenditures.
“Total infrastructure costs were found to rise considerably, with annual climate change expenditures increasing by as much as 25%,” the study says. “The results demonstrate that climate impacts will likely be substantial, though this analysis only captures a portion of the total potential impacts.”
They found that if the U.S. were to more aggressively tackle climate change, it could reduce the expected costs by as much as 50% by 2090.
Expanding clean energy has already proven to help communities.
In July, the think tank Energy Innovation found that “states with high levels of wind and solar generation like New Mexico, Iowa, and Oklahoma have experienced the lowest rate increases” in energy bills. When Hurricane Ian hit Florida in 2022, a community that runs completely on solar power managed to escape relatively unscathed while the areas around it faced rampant destruction. In 2021, The Center for American Progress found that investments in clean energy infrastructure could save U.S. households $500 every year just on energy costs.
And this is why it’s critical for better policy and funding, experts say.
“Clean energy technologies are expected to continue to decline in costs, enable substantial emissions reductions in the electricity sector without increasing costs,” Energy Innovation found in its report this year, noting, however, that it is up to regulators and policymakers to ensure that consumers are not hit with “unnecessary costs and risks” associated with the transition to clean energy.
Better planning, competitive resource procurement, grid-enhancing technologies, cooperation enhancement, and other strategies could help alleviate that issue, the group said, adding, “Regulators and policymakers have a range of tools they can deploy to mitigate pressure on rising rates, ensuring an affordable and accessible transition to clean electricity.”
Washington — A long-brewing legal standoff over the popular video-sharing app TikTok gets underway on Monday, with arguments in the challenge against a possible ban kicking off.
TikTok and its parent company ByteDance have been under fire by U.S. officials for years over warnings that China’s government could gain access to users’ data and use it to manipulate or spy on Americans. But a renewed push against the app gained momentum in Congress earlier this year, as lawmakers approved a foreign aid package that included provisions requiring it to be sold or be banned from U.S. app stores. President Biden signed the legislation into law in April, teeing up a countdown for TikTok’s sale.
TikTok and ByteDance filed a lawsuit against the Justice Department in May over the law, arguing that it violates First Amendment rights of users, among other claims. With the petition, the parties asked the court to block enforcement of the legislation, which they said would force a shutdown of the app by early next year, arguing that the sale of the app is untenable before then.
Given the timeline, the U.S. Court of Appeals for the District of Columbia Circuit fast-tracked oral arguments. The parties are appearing in federal court in Washington, D.C., on Monday, where TikTok will ask for a preliminary injunction against the law.
The video-sharing app will argue that Congress passed the law “hastily” under a “closed-door” legislative process, multiple sources told CBS News, while making the case that it’s the government’s burden, not TikTok’s, to prove that the speech restrictions further a compelling interest — and are tailored to achieve the interest. It will also argue that there’s “no information” that China has manipulated information Americans receive on TikTok.
TikTok has argued that the potential ban would be a “radical departure” from the U.S. supporting an open internet, while setting a “dangerous precedent.” Meanwhile, U.S. lawmakers and security experts stress that the Chinese government could tap TikTok’s trove of personal data from millions of U.S. users.
In a July filing, the Justice Department outlined that the concern “is grounded in the actions ByteDance and TikTok have already taken overseas, and in the PRC’s malign activities in the United States that, while not reliant on ByteDance and TikTok to date, demonstrate its capability and intent to engage in malign foreign influence and theft of sensitive data.”
On Monday, TikTok and the Justice Department will each get 25 minutes to present their case.
Getty Images
Homebuyers have faced a myriad of challenges that have persisted over the past few years, including elevated mortgage interest rates, scarce home inventory and high home prices. The combination of negative forces has priced many buyers out of the market and left their hopes of homeownership in doubt.
Thankfully, the housing market is starting to turn the corner, with good news sprinkling into the sector. Inflation is cooling, and the Federal Reserve is expected to begin cutting rates this week. These developments could result in more favorable home loan rates.
If you’re in the market for a new mortgage loan, take the time to research the best mortgage lenders. Below, we’ve detailed our best picks for the top lenders that could benefit you, depending on your situation.
Start by seeing how low of a mortgage interest rate you could secure here today.
Best mortgage lenders 2024
Here are six of the best mortgage lenders on the market now, broken down into six different categories:
Best overall: Veterans United Home Loans
Low rates are great, but finding the best balance of competitive rates, favorable terms, quick preapproval and exceptional customer service wins the day. Veterans United Home Loans checks all the boxes and is our choice for the best overall mortgage lender. As its name suggests, Veterans United specializes in Veterans Affairs (VA) loans but also offers conventional loans—with down payments as low as 3%—and other government-backed mortgages including FHA and USDA mortgages. Veterans United boasts a 4.8 rating (out of 5) on its website with nearly 400,000 customer reviews.
Learn more about Veterans United Home Loans here.
Best for first-time homebuyers: PenFed Credit Union
PenFed Credit Union is an excellent option for first-time buyers as it offers rates on conventional loans as low as 5.5% and low or no down payment options, depending on your loan type. The credit union also offers a First Time Home Buyer Advantage mortgage with a 3% down payment option and no income limits.
Qualified borrowers may secure a conventional mortgage loan with a 3% down payment, an FHA loan with 3.5% down or a VA loan with no down payment at all. PenFed also offers jumbo loans, home equity lines of credit and refinances.
If you’re interested in a PenFed mortgage, you must become a member to qualify. Fortunately, the credit union is open to anyone who wishes to join.
Best for good credit: U.S. Bank
U.S. Bank is a large bank available to borrowers nationwide. You may prefer this bank if you like the idea of applying for a loan in person at a local branch. The bank also offers an online application process with a shorter approval time. U.S. Bank offers competitive rates for borrowers with a minimum credit score of 620, but higher scores may lead to a lower rate.
In 2023, U.S. Bank launched the Access Home Loan program to improve homeownership opportunities for communities of color. This Special Purpose Credit Program (SPCP) provides eligible buyers with up to $12,500 in down payment assistance and $5,000 lender credit.
Best for bad credit: New American Funding
New American Funding offers three government-backed mortgage programs: FHA, VA and USDA. These programs provide affordable mortgage options for homebuyers who might have trouble qualifying for a conventional loan.
With a 10% down payment, you may be eligible for an FHA loan with a 500 minimum credit score. With a smaller down payment of only 3.5%, you may qualify with a 580 or greater score.
If you’re looking for more than government-backed loans, New American Funding provides a wide range of options, with over 16 different mortgage products to choose from.
Get started with New American Funding online today.
Best for fast funding: Better
Better’s One-Day Mortgage option may be worth considering if you need a fast closing or quick rate lock. This program gives qualified borrowers a rate and loan commitment letter within 24 hours, instead of the days or weeks many traditional banks require. Better also claims to close mortgages up to 17 days faster than the industry average. And if you find a lower rate with another lender, Better will match it. However, this option is not available for FHA and VA loans. Better enjoys a 4.4 rating on Trustpilot with over 1,700 reviews, 76% of which gave the lender a 5-star rating.
Best for low fees or closing costs: Alliant Credit Union
Alliant is a popular credit union that provides low and no-down payment options to help borrowers achieve the dream of homeownership. Alliant offers a large portfolio of mortgage options, including purchase, refinance and construction loans. As a credit union, rates are often lower than its traditional bank counterparts. Alliant’s website is also a cut-above the competition, making it easy to explore your options, estimate your payment or get preapproved in minutes.
The bottom line
Mortgage rates and terms vary from one lender to another, so it pays to get multiple quotes to find the best offer. Most lenders allow you to prequalify in minutes without affecting your credit score, so you can see the loan amount and mortgage rates you might qualify for.
CBS News
Suspect in armed incident near Trump identified as former Ukraine volunteer with criminal record
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.