Quotes
"One's dignity may be assaulted, vandalized and cruelly mocked, but it
cannot be taken away unless it is surrendered. "
-- Michael J. Fox, Actor
"We need to learn to set our course by the stars, not by the lights of
every passing ship."
-- General Omar N. Bradley, American General
"Ultimately we know deeply that the other side of every fear is
freedom."
-- Marilyn Ferguson, Author
"I have learned that success is to be measured not so much by the
position that one has reached in life as by the obstacles which he has
had to overcome while trying to succeed."
-- Booker T. Washington, Educator
"A work well begun is half-ended."
-- Plato, Philosopher
"The will to win is not nearly as important as the will to prepare to
win."
-- Bobby Knight, Basketball Head Coach
"To be what we are, and to become what we are capable of becoming, is
the only end in life."
-- Robert Louis Stevenson, Author
"Do what you can, with what you have, where you are."
-- Theodore Roosevelt, 26th President of the United States
"A man wrapped up in himself makes a very small bundle."
-- Benjamin Franklin, Inventor
"A ship in port is safe, but that's not what ships are built for."
-- Grace Hopper, American Computer Scientist
"You can't be a smart cookie if you have a crummy attitude."
-- John Maxwell
"The most powerful weapon on earth is the human soul on fire."
-- Ferdinand Foch, military strategist
"Chop your own wood and it will warm you twice."
-- Henry Ford, Founder of the Ford Motor Company
"A vision is a clearly-articulated, results-oriented picture of a future
you intend to create. It is a dream with direction."
-- Jesse Stoner Zemel
"Actions are seeds of fate. Seeds grow into destiny."
-- Harry Truman, 33rd President of the United States
"To carry a grudge is like being stung to death by one bee."
-- William H. Walton
"Men are anxious to improve their circumstances, but are unwilling to
improve themselves; they therefore remain bound."
-- James Allen
"Example is not the main thing in influencing others. It is the only
thing."
-- Albert Schweitzer
"Don't be afraid to take a big step if needed. You can't cross a chasm
in two small jumps."
-- Anonymous
"Sometimes the best helping hand you can get is a good, firm push."
-- Joann Thomas
"Failure is not fatal, but failure to change might be."
-- John Wooden, basketball coach
"Anger is a wind which blows out the lamp of the mind."
-- Robert G Ingersoll, American Political Leader
"If you aren't fired with enthusiasm, you will be fired with
enthusiasm."
-- Vince Lombardi, American Football Coach
"It's the little things that make the big things possible. Only close
attention to the fine details of any operation makes the operation first
class."
-- J. Willard Marriot
"Anything worth doing is worth doing poorly - until you learn to do it
well."
-- Steve Brown
"Only those who constantly retool themselves stand a chance of staying
employed in the years ahead."
-- Tom Peters, Author
"There is only one way to succeed at anything and that is to give
everything."
-- Vince Lombardi, American Football Coach
"The only thing we have to fear is fear itself."
-- Franklin D. Roosevelt, 32nd President of The United States of America
"It's in the struggle itself that you define yourself."
-- Pat Buchanan
"Become the kind of person that people would follow voluntarily, even if
you had no title or position."
-- Brian Tracy, Speaker, Author, Consultant
"Until you commit your goals to paper, you have intentions that are
seeds without soil."
-- Anonymous
"You are the way you are because that's the way you want to be. If you
really wanted to be any different, you would be in the process of
changing right now."
-- Fred Smith
Wednesday, February 24, 2010
Follow the Rents
Follow the Rents
A leading indicator for home prices? Follow the rents!
The big question for home buyers and sellers today is: "Where are home prices headed?" People want to know if now is a good time to buy or sell, or if they should wait. We all need to stay on top of trends in real estate values -- so what's a good way to analyze the situation?
Yale economist Robert Shiller states it bluntly: "If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure." Shiller is the co-developer of the S&P Case/Shiller Home Price Indices that monthly track residential real estate values nationally and in 20 metro areas.
Traditionally, people have been willing to pay a modest premium to own a home rather than rent it. Recent studies report that in 1999 rents averaged 87% of the after-tax mortgage payment for houses and condos of similar size in the same neighborhood.
When home prices took off, this percentage changed. By mid-2006, rents had fallen to less than 60% of after-tax mortgage payments. In some markets, owners were paying twice as much as renters for a similar property in the same neighborhood. In a few places, owner monthly payments were three times average rents.
The 87% ratio of rent to ownership cost for 1999 is a good benchmark because it stayed around that level throughout the 1990's and the steep rise in home prices hadn't really begun.
With that as our guide, we can conclude that home prices at last appear to be stabilizing. By the end of October 2009, rents on average were up to 83% of ownership costs!
Conditions vary from market to market, so check your own area. But with historically low mortgage rates, plus the homebuyer tax credit, this could be a great time to be buying or selling.... Have a great month!
A leading indicator for home prices? Follow the rents!
The big question for home buyers and sellers today is: "Where are home prices headed?" People want to know if now is a good time to buy or sell, or if they should wait. We all need to stay on top of trends in real estate values -- so what's a good way to analyze the situation?
Yale economist Robert Shiller states it bluntly: "If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure." Shiller is the co-developer of the S&P Case/Shiller Home Price Indices that monthly track residential real estate values nationally and in 20 metro areas.
Traditionally, people have been willing to pay a modest premium to own a home rather than rent it. Recent studies report that in 1999 rents averaged 87% of the after-tax mortgage payment for houses and condos of similar size in the same neighborhood.
When home prices took off, this percentage changed. By mid-2006, rents had fallen to less than 60% of after-tax mortgage payments. In some markets, owners were paying twice as much as renters for a similar property in the same neighborhood. In a few places, owner monthly payments were three times average rents.
The 87% ratio of rent to ownership cost for 1999 is a good benchmark because it stayed around that level throughout the 1990's and the steep rise in home prices hadn't really begun.
With that as our guide, we can conclude that home prices at last appear to be stabilizing. By the end of October 2009, rents on average were up to 83% of ownership costs!
Conditions vary from market to market, so check your own area. But with historically low mortgage rates, plus the homebuyer tax credit, this could be a great time to be buying or selling.... Have a great month!
Touch Of Grey
Touch Of Grey!
Like the Greatful Dead Song, there is ALWAYS a Silver Lining! There is no doubt that the immediate future of today’s housing market is, at best, cloudy. However, there is at least one silver lining which oft times goes unmentioned – affordability. We sometimes tend to concentrate on the seller in this market. There is no doubt that many sellers have seen much, if not all, of their equity disappear as prices have fallen.
The other side of that coin is that more and more buyers can now afford to purchase a home. The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) reported this month that:
Nationwide housing affordability, bolstered by favorable interest rates and low house prices, closed out the year near its highest level since the series was first compiled 18 years ago.
The HOI showed that 70.8 percent of all new and existing homes sold in the final quarter of 2009 were affordable to families earning the national median income of $64,000, slightly higher than the previous quarter and near the record-high 72.5 percent set during the first quarter of 2009. Affordability during the final quarter of the year was up from 62.4 percent during the fourth quarter of 2008.
NAHB Chairman Bob Jones said:
“Favorable mortgage rates and sliding house prices that have now started to stabilize nationally have both contributed to a record year for housing affordability in 2009.”
What does this mean to you?
This is the best time to buy a home. Don’t wait for the Tax Credit to end and interest rates to climb. Find the house you want and buy it.
You can go to www.bettshomes.com and Search 1000's of Homes, Live Now!
Like the Greatful Dead Song, there is ALWAYS a Silver Lining! There is no doubt that the immediate future of today’s housing market is, at best, cloudy. However, there is at least one silver lining which oft times goes unmentioned – affordability. We sometimes tend to concentrate on the seller in this market. There is no doubt that many sellers have seen much, if not all, of their equity disappear as prices have fallen.
The other side of that coin is that more and more buyers can now afford to purchase a home. The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) reported this month that:
Nationwide housing affordability, bolstered by favorable interest rates and low house prices, closed out the year near its highest level since the series was first compiled 18 years ago.
The HOI showed that 70.8 percent of all new and existing homes sold in the final quarter of 2009 were affordable to families earning the national median income of $64,000, slightly higher than the previous quarter and near the record-high 72.5 percent set during the first quarter of 2009. Affordability during the final quarter of the year was up from 62.4 percent during the fourth quarter of 2008.
NAHB Chairman Bob Jones said:
“Favorable mortgage rates and sliding house prices that have now started to stabilize nationally have both contributed to a record year for housing affordability in 2009.”
What does this mean to you?
This is the best time to buy a home. Don’t wait for the Tax Credit to end and interest rates to climb. Find the house you want and buy it.
You can go to www.bettshomes.com and Search 1000's of Homes, Live Now!
For the week of February 22, 2010
INFO THAT HITS US WHERE WE LIVE
Builders are jumping on the recovery bandwagon, as January Housing Starts beat consensus estimates, heading UP 2.8% to an annual rate of 591,000 units. Single-family starts are now 35.6% up from their low a year ago. Total new building permits dropped a tad in January, but single-family permits were up 0.4% for the month and UP 48.2% from a year ago.
The trend indicates more improvement ahead. Permits for single-family homes are 7.4% higher than starts in states requiring building permits, well above the historical norm. Many observers feel home building is in the early stages of a serious rebound. Supporting this, the National Association of Home Builders reported builder confidence higher in February, going from 15 to 17 points, 8 points up from a year ago.
Although the Fed will stop buying Mortgage Backed Securities (MBS) at the end of March, some analysts now feel this may not cause mortgage rates to rise much, if at all. That's because Fannie Mae and Freddie Mac recently announced their plan to buy up to $200 billion in delinquent loans from their own MBS and pass-through pools. Friday the Mortgage Bankers Association reported the percentage of delinquent home loans shrank in Q4. MBA chief economist Jay Brinkmann feels that fewer new problem mortgages could be signaling the "beginning of the end" of the foreclosure crisis. Let's hope so.
>> Review of Last Week
UP UP UP UP... YUP, stocks went UP four days in a row, which constituted all the trading days there were in the holiday-shortened week. Investors seemed to be responding to a cessation of fears coming out of Europe, encouraging economic data, good corporate earnings and the news from the Fed.
The minutes from the Fed's January FOMC meeting stated economic conditions still warrant low interest rates, although their GDP growth estimate went from 3.0% to 3.2% for the year. Then Thursday, as reported in an Inside Lending Bulletin, the Fed raised its discount rate on emergency loans to banks by 0.25%, to 0.75%. The discount rate is not the Fed funds rate and the central bank said the increase does not "...signal any change in the outlook for the economy or for monetary policy...." Some analysts feel the Fed was just trying to appease inflation "hawks". The irony was, the CPI inflation reading came in the next morning below consensus expectations, up a scant 0.2%!
Earlier in the week, the PPI reading on wholesale inflation came in a little higher than expected, but this was balanced by the good news on housing starts, plus better-than-expected earnings from John Deere, Merck, Kraft, Hewlett-Packard and Wal-Mart. Equally encouraging, industrial production went UP 0.9% in January, putting it up at an 8.9% annual rate for the last six months. More evidence that manufacturing is at the heart of this recovery.
For the week, the Dow was UP 3.0%, to 10402.35; the S&P 500 was UP 3.1%, to 1109.17; while the Nasdaq climbed UP 2.8%, to 2243.87.
Stocks went up for the week, so can you guess which way bonds headed? Correct. The FNMA 30-year 4.5% bond we watch ended down 69 basis points, closing at $100.22. Mortgage rates, however, still held at their historically low levels.
>> This Week’s Forecast
HOMES, CONSUMERS, Q4 GDP... The week gives us more takes on housing, with New Home Sales on Wednesday and Existing Home Sales Friday. There are two looks at the consumer mindset as well, with Consumer Confidence on Tuesday and the University of Michigan Consumer Sentiment Index on Friday. Also Friday is the second GDP estimate for Q4, showing positive economic growth coming out of the recession. The week ends on another key manufacturing measure --the Chicago PMI.
Builders are jumping on the recovery bandwagon, as January Housing Starts beat consensus estimates, heading UP 2.8% to an annual rate of 591,000 units. Single-family starts are now 35.6% up from their low a year ago. Total new building permits dropped a tad in January, but single-family permits were up 0.4% for the month and UP 48.2% from a year ago.
The trend indicates more improvement ahead. Permits for single-family homes are 7.4% higher than starts in states requiring building permits, well above the historical norm. Many observers feel home building is in the early stages of a serious rebound. Supporting this, the National Association of Home Builders reported builder confidence higher in February, going from 15 to 17 points, 8 points up from a year ago.
Although the Fed will stop buying Mortgage Backed Securities (MBS) at the end of March, some analysts now feel this may not cause mortgage rates to rise much, if at all. That's because Fannie Mae and Freddie Mac recently announced their plan to buy up to $200 billion in delinquent loans from their own MBS and pass-through pools. Friday the Mortgage Bankers Association reported the percentage of delinquent home loans shrank in Q4. MBA chief economist Jay Brinkmann feels that fewer new problem mortgages could be signaling the "beginning of the end" of the foreclosure crisis. Let's hope so.
>> Review of Last Week
UP UP UP UP... YUP, stocks went UP four days in a row, which constituted all the trading days there were in the holiday-shortened week. Investors seemed to be responding to a cessation of fears coming out of Europe, encouraging economic data, good corporate earnings and the news from the Fed.
The minutes from the Fed's January FOMC meeting stated economic conditions still warrant low interest rates, although their GDP growth estimate went from 3.0% to 3.2% for the year. Then Thursday, as reported in an Inside Lending Bulletin, the Fed raised its discount rate on emergency loans to banks by 0.25%, to 0.75%. The discount rate is not the Fed funds rate and the central bank said the increase does not "...signal any change in the outlook for the economy or for monetary policy...." Some analysts feel the Fed was just trying to appease inflation "hawks". The irony was, the CPI inflation reading came in the next morning below consensus expectations, up a scant 0.2%!
Earlier in the week, the PPI reading on wholesale inflation came in a little higher than expected, but this was balanced by the good news on housing starts, plus better-than-expected earnings from John Deere, Merck, Kraft, Hewlett-Packard and Wal-Mart. Equally encouraging, industrial production went UP 0.9% in January, putting it up at an 8.9% annual rate for the last six months. More evidence that manufacturing is at the heart of this recovery.
For the week, the Dow was UP 3.0%, to 10402.35; the S&P 500 was UP 3.1%, to 1109.17; while the Nasdaq climbed UP 2.8%, to 2243.87.
Stocks went up for the week, so can you guess which way bonds headed? Correct. The FNMA 30-year 4.5% bond we watch ended down 69 basis points, closing at $100.22. Mortgage rates, however, still held at their historically low levels.
>> This Week’s Forecast
HOMES, CONSUMERS, Q4 GDP... The week gives us more takes on housing, with New Home Sales on Wednesday and Existing Home Sales Friday. There are two looks at the consumer mindset as well, with Consumer Confidence on Tuesday and the University of Michigan Consumer Sentiment Index on Friday. Also Friday is the second GDP estimate for Q4, showing positive economic growth coming out of the recession. The week ends on another key manufacturing measure --the Chicago PMI.
Federal Reserve Raises Interest Rate
News Alert: Federal Reserve Raises Interest Rate Charged to Banks, In First Move Since 2008
The Federal Reserve, taking its first step to return lending to normal after more than two years of extraordinary actions to prop up the economy, on Thursday raised its discount rate -- the interest rate it charges on emergency loans to banks -- by one-quarter percentage point.
The increase, to 0.75 percent from 0.50 percent, takes effect on Friday.
Officials said the move was not meant to be a broad tightening of credit. Rather, they said, it was intended to discourage emergency borrowing when other financing is available to banks.
The discount rate had been at 0.50 percent since December 2008.
The Federal Reserve, taking its first step to return lending to normal after more than two years of extraordinary actions to prop up the economy, on Thursday raised its discount rate -- the interest rate it charges on emergency loans to banks -- by one-quarter percentage point.
The increase, to 0.75 percent from 0.50 percent, takes effect on Friday.
Officials said the move was not meant to be a broad tightening of credit. Rather, they said, it was intended to discourage emergency borrowing when other financing is available to banks.
The discount rate had been at 0.50 percent since December 2008.
For the week of February 15, 2010
INFO THAT HITS US WHERE WE LIVE
The National Association of Realtors last Thursday reported existing home sales UP 27.2% for the last three months of 2009 versus a year earlier. This amounted to a seasonally adjusted annual rate of 6 million homes. -- a 13.9% increase over the third quarter's annual rate of 5.29 million homes. Clearly, buyers are taking advantage of the low mortgage interest rates and the tax credit that was extended and expanded by Congress.
The existing home sales increase from Q3 to Q4 occurred in 48 states and D.C., with 32 of those states showing double-digit gains. Year-over-year, sales were higher in 49 states and D.C., up by double digits in all but 3 states. And distressed property made up just 32% of Q4 sales versus 37% of sales a year ago. The national median price of an existing single-family home, at $172,900, was down 4.1% year-over-year -- but that was the smallest price decline in over two years. Even better, out of the 151 metropolitan statistical areas studied, 67 of them showed a RISE in the median home price!
>> Review of Last Week
ROCK 'N ROLL... It was another raucous week in the stock markets, but this time the festivities ended with all three major averages headed UP! There wasn't a lot of US economic news to stir things up, so investors instead fretted over Greece. Stock prices went up and down with the news, but when all was said and done, Greece was promised the support of the European Union (EU), the International Monetary Fund (IMF), the European Central Bank and the European Commission. Sure sounds like enough help. We note there is no major US bank exposure in Greece. Investors also got shook about China tightening its credit situation, but, hey, they're just trying to prevent their double-digit economic growth from getting out of hand.
Wednesday saw the trade deficit for December come in at $40.2 billion, an increase of $3.8 billion over the prior month, but still $1.7 billion smaller than last year. Exports are actually up eight months in a row, growing at a 27.1% annual rate. Total international trade -- imports and exports --is up at a 31% annual rate since bottoming in April last year, and up at a 42% annual rate in the last three months.
The week ended on more good news. Retail sales were UP 0.5% in January (UP 0.8% including upward revisions to previous months). In the past six months retail sales are UP 7.9% at an annual rate and since September they've blasted UP 10.9%. Observers put this to personal incomes on the rise, a substantial reduction in consumer debt and the beginning signs of improvement in the job market. In line with this last point, initial unemployment claims fell to 440,000, with the four-week moving average now down to 469,000 -- around 100,000 lower than six months ago. Continuing claims are now down to 4.538 million.
For the week, the Dow was UP 0.9%, to 10099.14; the S&P 500 was also UP 0.9%, to 1075.51; while the Nasdaq surged UP 2.0%, to 2183.53.
Bonds endured an up-and-down week too, mimicking stocks but finally ending in the opposite direction -- down for the week. The FNMA 30-year 4.5% bond we watch ended down 50 basis points, closing at $100.91. Nevertheless, mortgage rates continued at their historically low levels. But homebuyers and owners looking to refinance should remember the Fed says it will stop buying mortgage bonds March 31. Experts feel this will send rates up a bit.
>> This Week’s Forecast
NEW READS ON HOMEBUILDING, THE FED AND INFLATION...Markets are closed Monday for Presidents' Day, then Wednesday we get a look at the mindset of homebuilders, with Housing Starts and Building Permits. The day will also reveal the FOMC Minutes from the Fed's last meeting in January. Thursday's PPI measures wholesale inflation. Then Friday we get the CPI consumer inflation reading that the Fed pays such close attention to.
The National Association of Realtors last Thursday reported existing home sales UP 27.2% for the last three months of 2009 versus a year earlier. This amounted to a seasonally adjusted annual rate of 6 million homes. -- a 13.9% increase over the third quarter's annual rate of 5.29 million homes. Clearly, buyers are taking advantage of the low mortgage interest rates and the tax credit that was extended and expanded by Congress.
The existing home sales increase from Q3 to Q4 occurred in 48 states and D.C., with 32 of those states showing double-digit gains. Year-over-year, sales were higher in 49 states and D.C., up by double digits in all but 3 states. And distressed property made up just 32% of Q4 sales versus 37% of sales a year ago. The national median price of an existing single-family home, at $172,900, was down 4.1% year-over-year -- but that was the smallest price decline in over two years. Even better, out of the 151 metropolitan statistical areas studied, 67 of them showed a RISE in the median home price!
>> Review of Last Week
ROCK 'N ROLL... It was another raucous week in the stock markets, but this time the festivities ended with all three major averages headed UP! There wasn't a lot of US economic news to stir things up, so investors instead fretted over Greece. Stock prices went up and down with the news, but when all was said and done, Greece was promised the support of the European Union (EU), the International Monetary Fund (IMF), the European Central Bank and the European Commission. Sure sounds like enough help. We note there is no major US bank exposure in Greece. Investors also got shook about China tightening its credit situation, but, hey, they're just trying to prevent their double-digit economic growth from getting out of hand.
Wednesday saw the trade deficit for December come in at $40.2 billion, an increase of $3.8 billion over the prior month, but still $1.7 billion smaller than last year. Exports are actually up eight months in a row, growing at a 27.1% annual rate. Total international trade -- imports and exports --is up at a 31% annual rate since bottoming in April last year, and up at a 42% annual rate in the last three months.
The week ended on more good news. Retail sales were UP 0.5% in January (UP 0.8% including upward revisions to previous months). In the past six months retail sales are UP 7.9% at an annual rate and since September they've blasted UP 10.9%. Observers put this to personal incomes on the rise, a substantial reduction in consumer debt and the beginning signs of improvement in the job market. In line with this last point, initial unemployment claims fell to 440,000, with the four-week moving average now down to 469,000 -- around 100,000 lower than six months ago. Continuing claims are now down to 4.538 million.
For the week, the Dow was UP 0.9%, to 10099.14; the S&P 500 was also UP 0.9%, to 1075.51; while the Nasdaq surged UP 2.0%, to 2183.53.
Bonds endured an up-and-down week too, mimicking stocks but finally ending in the opposite direction -- down for the week. The FNMA 30-year 4.5% bond we watch ended down 50 basis points, closing at $100.91. Nevertheless, mortgage rates continued at their historically low levels. But homebuyers and owners looking to refinance should remember the Fed says it will stop buying mortgage bonds March 31. Experts feel this will send rates up a bit.
>> This Week’s Forecast
NEW READS ON HOMEBUILDING, THE FED AND INFLATION...Markets are closed Monday for Presidents' Day, then Wednesday we get a look at the mindset of homebuilders, with Housing Starts and Building Permits. The day will also reveal the FOMC Minutes from the Fed's last meeting in January. Thursday's PPI measures wholesale inflation. Then Friday we get the CPI consumer inflation reading that the Fed pays such close attention to.
For the week of February 8, 2010
INFO THAT HITS US WHERE WE LIVE
The Pending Home Sales Index recovered from its November slump, increasing 1.0% in December, putting it 10.9% over its level of a year ago. National Association of Realtors chief economist Lawrence Yun sees "...a broad improvement over year-ago levels. December activity was the fifth-highest monthly tally in two years." The slump was attributed to the rush before November to grab the tax credit set to expire at the end of that month.
We now know the tax credit was extended to buyers who can sign a contract by April 30 and close on the home by June 30. It's also been expanded, adding a $6500 credit for repeat buyers to the $8,000 credit for first timers. The NAR's Yun estimates 2.4 million households should take advantage of the credit this year.
The NAR also released their adjusted overall outlook for this year and next. They estimate existing home sales will grow from 5.19 million in 2009 to 5.66 million in 2010 and 5.7 million in 2011. They see new home sales growing from 375,000 in 2009 to 446,000 in 2010 and 637,000 in 2011. They believe prices have bottomed, projecting a 3.4% hike in the median price for existing homes to $179,800 this year and then a 4.3% rise to $187,500 in 2011. New homes should go up 3.7% this year to a $221,300 median price and then 4.7% in 2011 to $231,700.
>> Review of Last Week
STILL NORTH OF 10,000... Last week, stocks took investors on a wild ride, but when all was said and done, the venerable Dow remained defiantly above 10,000. Investor concerns focused mostly on a "sovereign debt crisis" in Europe. Basically, Portugal had trouble selling its treasuries. Then, Spain, whose 19% unemployment is way worse than any European country except Latvia, raised its deficit forecasts. Finally, people questioned if the Greek government has the fiscal discipline necessary to pay back its loans. European markets tanked and Wall Street roller-coastered.
Investors also aren't completely sold on our own recovery. The problem of course is jobs, the most lagging of all economic indicators. Weekly initial jobless claims rose by 8,000, a bit worse than expected. Then Friday's January employment report showed a loss of 20,000 jobs, when a 13,000 gain was expected. But hey, the unemployment rate fell to 9.7%! Average hourly earnings were UP 0.2% for the month and UP 2.0% over last year. Also, total hours are up at a 1.8% annual rate in the last three months. This works out to about 200,000 jobs a month, showing there's a growing demand for labor, which companies are meeting by increasing hours. Needless to say, they can't keep that up indefinitely.
Now for some really good news. Personal income was UP 0.4% in December and personal consumption rose 0.2%. Over the past three months, real inflation-adjusted consumer spending is UP at a strong 3.6% annual rate. Not surprising, given that in the last nine months, compensation per worker is UP at a 4.7% annual rate. In line with that, several retailers announced same store sales, with most beating estimates -- some by substantial amounts! The ISM Manufacturing index hit 58.4, a five-year high, and ISM Services went to 50.5 in January, signaling expansion in the non-manufacturing sector too.
But for the week, the Dow was off 0.5%, to 10012.23; the S&P 500 slipped 0.7%, to 1066.19; while the Nasdaq was down just 0.3%, to 2141.12.
A volatile stock market, combined with sovereign debt worries, did wonders for bond prices. The FNMA 30-year 4.5% bond we watch ended UP a solid 38 basis points for the week, closing at $101.41. Mortgage rates stayed at the historically low levels we've been seeing. But homebuyers and owners looking to refinance should note that the Fed said it will stop buying mortgage bonds March 31. Experts feel this will send rates up a bit.
>> This Week’s Forecast
CHECK IN WITH CONSUMERS...This week the big economic indicators will be the January Retail Sales reports. Are consumers coming back into the game, or are they acting like the stock investors on Wall Street? We'll learn all on Thursday. That day's weekly unemployment numbers will also continue to get attention. Friday brings Michigan Consumer Sentiment, for another take on the mindset of the folks whose spending remains key to the recovery.
The Pending Home Sales Index recovered from its November slump, increasing 1.0% in December, putting it 10.9% over its level of a year ago. National Association of Realtors chief economist Lawrence Yun sees "...a broad improvement over year-ago levels. December activity was the fifth-highest monthly tally in two years." The slump was attributed to the rush before November to grab the tax credit set to expire at the end of that month.
We now know the tax credit was extended to buyers who can sign a contract by April 30 and close on the home by June 30. It's also been expanded, adding a $6500 credit for repeat buyers to the $8,000 credit for first timers. The NAR's Yun estimates 2.4 million households should take advantage of the credit this year.
The NAR also released their adjusted overall outlook for this year and next. They estimate existing home sales will grow from 5.19 million in 2009 to 5.66 million in 2010 and 5.7 million in 2011. They see new home sales growing from 375,000 in 2009 to 446,000 in 2010 and 637,000 in 2011. They believe prices have bottomed, projecting a 3.4% hike in the median price for existing homes to $179,800 this year and then a 4.3% rise to $187,500 in 2011. New homes should go up 3.7% this year to a $221,300 median price and then 4.7% in 2011 to $231,700.
>> Review of Last Week
STILL NORTH OF 10,000... Last week, stocks took investors on a wild ride, but when all was said and done, the venerable Dow remained defiantly above 10,000. Investor concerns focused mostly on a "sovereign debt crisis" in Europe. Basically, Portugal had trouble selling its treasuries. Then, Spain, whose 19% unemployment is way worse than any European country except Latvia, raised its deficit forecasts. Finally, people questioned if the Greek government has the fiscal discipline necessary to pay back its loans. European markets tanked and Wall Street roller-coastered.
Investors also aren't completely sold on our own recovery. The problem of course is jobs, the most lagging of all economic indicators. Weekly initial jobless claims rose by 8,000, a bit worse than expected. Then Friday's January employment report showed a loss of 20,000 jobs, when a 13,000 gain was expected. But hey, the unemployment rate fell to 9.7%! Average hourly earnings were UP 0.2% for the month and UP 2.0% over last year. Also, total hours are up at a 1.8% annual rate in the last three months. This works out to about 200,000 jobs a month, showing there's a growing demand for labor, which companies are meeting by increasing hours. Needless to say, they can't keep that up indefinitely.
Now for some really good news. Personal income was UP 0.4% in December and personal consumption rose 0.2%. Over the past three months, real inflation-adjusted consumer spending is UP at a strong 3.6% annual rate. Not surprising, given that in the last nine months, compensation per worker is UP at a 4.7% annual rate. In line with that, several retailers announced same store sales, with most beating estimates -- some by substantial amounts! The ISM Manufacturing index hit 58.4, a five-year high, and ISM Services went to 50.5 in January, signaling expansion in the non-manufacturing sector too.
But for the week, the Dow was off 0.5%, to 10012.23; the S&P 500 slipped 0.7%, to 1066.19; while the Nasdaq was down just 0.3%, to 2141.12.
A volatile stock market, combined with sovereign debt worries, did wonders for bond prices. The FNMA 30-year 4.5% bond we watch ended UP a solid 38 basis points for the week, closing at $101.41. Mortgage rates stayed at the historically low levels we've been seeing. But homebuyers and owners looking to refinance should note that the Fed said it will stop buying mortgage bonds March 31. Experts feel this will send rates up a bit.
>> This Week’s Forecast
CHECK IN WITH CONSUMERS...This week the big economic indicators will be the January Retail Sales reports. Are consumers coming back into the game, or are they acting like the stock investors on Wall Street? We'll learn all on Thursday. That day's weekly unemployment numbers will also continue to get attention. Friday brings Michigan Consumer Sentiment, for another take on the mindset of the folks whose spending remains key to the recovery.
HUD Waives FHA Rule on Flipping
HUD Waives FHA Rule on Flipping
In an effort to expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties, HUD has announced a temporary waiver of the 90-day flipping rule. The waiver takes effect February 1, 2010, and lasts for one year, unless otherwise extended or withdrawn by HUD.
The waiver is limited to those sales that meet the following conditions:
1. All transactions must be arms-length, with no identity of interest between the buyer and seller or any other parties participating in the sales transaction, including:
• Seller must hold title
• LLCs, Corporations and trusts must be established in accordance with state and federal law
• No evidence of previous flipping within 12 months
• Evidence that property was marketed openly, such as via MLS, auction, FSBO
• The waiver is limited to forward mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program
2. If the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will apply only if the lender meets the following conditions:
• Significant work has been done to the home (documented by a second appraisal verifying that legitimate repairs and rehabilitation have been done to substantiate an increase of more than 20%); or,
• In cases where no work has been done, the appraiser must provide explanation to support the increase since the prior transfer; and,
• A property inspection must be provided to the buyer prior to closing. (The lender may charge the borrower for the inspection.) The inspector does not need to be FHA approved, but must have no interest in the property, must not receive compensation other than from the lender and may not be involved with the repairs recommended from inspection.
In an effort to expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties, HUD has announced a temporary waiver of the 90-day flipping rule. The waiver takes effect February 1, 2010, and lasts for one year, unless otherwise extended or withdrawn by HUD.
The waiver is limited to those sales that meet the following conditions:
1. All transactions must be arms-length, with no identity of interest between the buyer and seller or any other parties participating in the sales transaction, including:
• Seller must hold title
• LLCs, Corporations and trusts must be established in accordance with state and federal law
• No evidence of previous flipping within 12 months
• Evidence that property was marketed openly, such as via MLS, auction, FSBO
• The waiver is limited to forward mortgages and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program
2. If the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will apply only if the lender meets the following conditions:
• Significant work has been done to the home (documented by a second appraisal verifying that legitimate repairs and rehabilitation have been done to substantiate an increase of more than 20%); or,
• In cases where no work has been done, the appraiser must provide explanation to support the increase since the prior transfer; and,
• A property inspection must be provided to the buyer prior to closing. (The lender may charge the borrower for the inspection.) The inspector does not need to be FHA approved, but must have no interest in the property, must not receive compensation other than from the lender and may not be involved with the repairs recommended from inspection.
The Remodeling Market
The Remodeling Market
During the housing boom, remodeling expenditures — including maintenance, repairs, and improvements to rental and owner-occupied homes — more than doubled to an estimated $326 billion between 1995 and 2007.
In recent years, remodels were financed with home equity loans and cash-out refinances. Owners extracted an average of $450 billion a year in home equity between 1999 and 2008 and reinvested more than 25% of extracted equity into home improvements. Because of the recent economic downturn, remodeling activity has shifted from high-end discretionary improvements to those that maintain structural integrity as well as generate cost savings.
Although residential remodeling remained relatively weak during the third quarter of 2009, remodelers are starting to report that conditions in their markets are stabilizing, according to the latest National Association of Home Builders' Remodeling Market Index.
In the most recent report, the current market conditions index rose to 39.8 from 38.1. The index of future indicators jumped to 38.7 from 34.2. An index reading below 50 indicates negative sentiment about the remodeling market. The RMI has been running below 50 since the final quarter of 2005.
As the home-remodeling market improves, the Joint Center for Housing Studies of Harvard University has identified three areas of growth:
The increasing need to upgrade the rental housing stock — almost 10% of rental inventory in the U.S. was considered structurally inadequate in 2007 and in need of remodeling.
Higher energy prices and greater environmental awareness, which will increase the demand for green remodeling projects.
Continued growth in improvements spending by foreign-born homeowners — their spending levels have grown almost 13% per year since 2000, well in excess of the 7% growth by native-born households.
During the housing boom, remodeling expenditures — including maintenance, repairs, and improvements to rental and owner-occupied homes — more than doubled to an estimated $326 billion between 1995 and 2007.
In recent years, remodels were financed with home equity loans and cash-out refinances. Owners extracted an average of $450 billion a year in home equity between 1999 and 2008 and reinvested more than 25% of extracted equity into home improvements. Because of the recent economic downturn, remodeling activity has shifted from high-end discretionary improvements to those that maintain structural integrity as well as generate cost savings.
Although residential remodeling remained relatively weak during the third quarter of 2009, remodelers are starting to report that conditions in their markets are stabilizing, according to the latest National Association of Home Builders' Remodeling Market Index.
In the most recent report, the current market conditions index rose to 39.8 from 38.1. The index of future indicators jumped to 38.7 from 34.2. An index reading below 50 indicates negative sentiment about the remodeling market. The RMI has been running below 50 since the final quarter of 2005.
As the home-remodeling market improves, the Joint Center for Housing Studies of Harvard University has identified three areas of growth:
The increasing need to upgrade the rental housing stock — almost 10% of rental inventory in the U.S. was considered structurally inadequate in 2007 and in need of remodeling.
Higher energy prices and greater environmental awareness, which will increase the demand for green remodeling projects.
Continued growth in improvements spending by foreign-born homeowners — their spending levels have grown almost 13% per year since 2000, well in excess of the 7% growth by native-born households.
HUD TAKES ACTION TO SPEED RESALE OF FORECLOSURES
HUD TAKES ACTION TO SPEED RESALE OF FORECLOSURES
With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
The waiver will take effect on February 1. 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.
Limits to waiver:
All transactions must be arms length.
In cases in which the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will only apply if the lender meets certain specific conditions.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Specific condition and other details are in the text of the waiver at www.hud.gov
With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.
The waiver will take effect on February 1. 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.
Limits to waiver:
All transactions must be arms length.
In cases in which the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will only apply if the lender meets certain specific conditions.
The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Specific condition and other details are in the text of the waiver at www.hud.gov
New RESPA laws
New RESPA laws
We wanted you to be aware of the vast changes that have once again challenged our industry beginning January 1, 2010. The new Regulation X (as it is being called) dramatically affects the way disclosures are handled on the loan side of a purchase or refinance. This has hit the whole industry nationally, whether the loan is done through a bank, broker or mortgage banker.
The new GFE (Good Faith Estimate) 2010 may have ramifications on the time a transaction can be completed and any changes that may affect the deal along the way. Any "change" to rate, fees, extensions, sales price, credits, etc... or anything that may affect the APR of the loan could impact the ability to close on time. Due to these changes, it has never been more important to fight for a reputable escrow, title and lending institution that you know and trust to handle your transactions. This is not a market for rookies!
There are many lenders pushing for changes to the purchase contract to now extend the loan contingency dates and to encourage longer escrow periods to allow for these changes. Many rush situations will now be completely out of the control of the lender to accommodate, as any change to the transaction will set into effect a new process for re-disclosure, so please establish realistic time frames when negotiating your purchase contract.
We will be sharing a lot of information on a go forward to keep you informed, but wanted to make sure you were aware of some of the implications of the changes that went into effect. This is said to be the biggest change to the mortgage lending industry in over 20 years and will have a vast impact on the ability to modify and change purchase transactions and any change that will impact the APR on the loan.
We have hit the ground running with significant training and education to keep us at the front of the pack. We will keep you informed as to how the change is impacting the lending world and to keep you up to date on what you can expect for the future.
We appreciate your support and will guarantee that we will do everything in our power to educate you and your clients and to insure a smooth lending process for your clients. We are committed to your success and know that 2010 will be solid year for Real Estate.
We wanted you to be aware of the vast changes that have once again challenged our industry beginning January 1, 2010. The new Regulation X (as it is being called) dramatically affects the way disclosures are handled on the loan side of a purchase or refinance. This has hit the whole industry nationally, whether the loan is done through a bank, broker or mortgage banker.
The new GFE (Good Faith Estimate) 2010 may have ramifications on the time a transaction can be completed and any changes that may affect the deal along the way. Any "change" to rate, fees, extensions, sales price, credits, etc... or anything that may affect the APR of the loan could impact the ability to close on time. Due to these changes, it has never been more important to fight for a reputable escrow, title and lending institution that you know and trust to handle your transactions. This is not a market for rookies!
There are many lenders pushing for changes to the purchase contract to now extend the loan contingency dates and to encourage longer escrow periods to allow for these changes. Many rush situations will now be completely out of the control of the lender to accommodate, as any change to the transaction will set into effect a new process for re-disclosure, so please establish realistic time frames when negotiating your purchase contract.
We will be sharing a lot of information on a go forward to keep you informed, but wanted to make sure you were aware of some of the implications of the changes that went into effect. This is said to be the biggest change to the mortgage lending industry in over 20 years and will have a vast impact on the ability to modify and change purchase transactions and any change that will impact the APR on the loan.
We have hit the ground running with significant training and education to keep us at the front of the pack. We will keep you informed as to how the change is impacting the lending world and to keep you up to date on what you can expect for the future.
We appreciate your support and will guarantee that we will do everything in our power to educate you and your clients and to insure a smooth lending process for your clients. We are committed to your success and know that 2010 will be solid year for Real Estate.
The Role of Housing in Recession Cycles
The Role of Housing in Recession Cycles
Housing plays a substantial role in the U.S. economy. One method of measuring the impact of housing in the economy is to calculate the total amount of capital exchanged in home construction, remodeling, and fees associated with the buying and selling process. Together, this sum is known as the residential fixed investment (RFI). The RFI has averaged 4.8% of the U.S. gross domestic product (GDP) since recordkeeping began in 1947. If you add household-related investments, furnishings and rents to the RFI, the contribution of housing to GDP has averaged about 21% since 1947.
Housing is considered a leading indicator of economic cycles. The housing market will slow in advance of a recession, indicating an economic contraction. Conversely, the housing market tends to expand before the end of a recession. RFI often turns positive one-to-two quarters prior to the end of a recession. In six out of the last nine recessions since 1947, RFI turned positive during or before the final quarter of the contraction.
Most recently, RFI peaked at 6.3% of GDP in the fourth quarter of 2005, the highest level since 1951. RFI fell to 2.4% of GDP in the second quarter of 2009, dipping below the previous low of 3.2% set in the third quarter of 1982. On the rebound, GDP turned positive for the first time in a year in the third quarter of 2009. The RFI increased to 2.5% of GDP. So the current RFI pattern follows the majority of contractions since 1947: RFI was increasing during the first quarter of GDP growth leading out of the current recession.
The latest report for new home sales showed a 6.2% monthly increase. That left the inventory of new homes for sale at the lowest level in nearly four decades. Look for builders to start building soon and the most important component of the RFI — home construction — to increase.
Housing plays a substantial role in the U.S. economy. One method of measuring the impact of housing in the economy is to calculate the total amount of capital exchanged in home construction, remodeling, and fees associated with the buying and selling process. Together, this sum is known as the residential fixed investment (RFI). The RFI has averaged 4.8% of the U.S. gross domestic product (GDP) since recordkeeping began in 1947. If you add household-related investments, furnishings and rents to the RFI, the contribution of housing to GDP has averaged about 21% since 1947.
Housing is considered a leading indicator of economic cycles. The housing market will slow in advance of a recession, indicating an economic contraction. Conversely, the housing market tends to expand before the end of a recession. RFI often turns positive one-to-two quarters prior to the end of a recession. In six out of the last nine recessions since 1947, RFI turned positive during or before the final quarter of the contraction.
Most recently, RFI peaked at 6.3% of GDP in the fourth quarter of 2005, the highest level since 1951. RFI fell to 2.4% of GDP in the second quarter of 2009, dipping below the previous low of 3.2% set in the third quarter of 1982. On the rebound, GDP turned positive for the first time in a year in the third quarter of 2009. The RFI increased to 2.5% of GDP. So the current RFI pattern follows the majority of contractions since 1947: RFI was increasing during the first quarter of GDP growth leading out of the current recession.
The latest report for new home sales showed a 6.2% monthly increase. That left the inventory of new homes for sale at the lowest level in nearly four decades. Look for builders to start building soon and the most important component of the RFI — home construction — to increase.
Happiness is a sappy word and a flimsy concept
Happiness is a sappy word and a flimsy concept — more fleeting than contentment, several octaves lower than joy. But happiness is what pollsters test and economists track, however clumsily, so we're stuck with it as the medium for measuring our mood. Not surprisingly, that mood has bounced around over the years, with the general sense of well-being hitting its lowest points in 1973, 1982, 1992 and 2001, all recession years. So why is it that at least some aspects of the Great Recession of 2009 appear to have made people feel better?
In January 2008, the Gallup-Healthways Well-Being Index was launched. It was designed to work like a Dow Jones average of attitude. At least 1,000 people are surveyed daily, 350 days a year. (You can see how happy people are broken down by congressional district; Utah turns out to be the merriest state, West Virginia the glummest.) When the markets tanked last fall, happiness did too, and anyone who has lost his or her job, house or health care is probably still in a world of pain. But here's the funny thing: by this past summer, overall well-being was higher than it was in the summer of 2008, before the Apocalypse. In fact, the latest report finds America's cheeriness at an all-time high. An August report from the Pepsi Optimism Project (POP) positively fizzed: Americans are more optimistic now than a year ago about their well-being (88% vs. 84%); health, finances, relationships and odds of finding love (70% vs. 61%). Don't trust soda-company polls? Consumer Reports confirms that we don't plan to spend much money this Christmas, but the vast majority of us — 87% — expect this holiday season will be as happy as or even happier than last year's. Meanwhile, the Secret Society of Happy People (which "encourages the expression of happiness and discourages parade-raining") reports traffic to its not-so-secret website has increased since the downturn.
Everyone — or at least everyone who claims to be happy — has some reason for finding the upside to the downturn. Mine has to do with the end of Expectation Inflation, a phenomenon that can be as corrosive to our spirits as price inflation is to our savings. Expectations are a mash-up of hope and conceit, what you've earned and what you imagine luck might hand you as a bonus for just showing up. So what did it mean that over the past generation our expectations grew so big so fast that we had effectively supersized the American Dream?
Some parts of raised expectations are plainly good. We expect to live well into our 80s because medicine keeps getting better. Many more high school students expect to go to college. In 1973, 47% of recent high school graduates attended college; last year 69% of new graduates enrolled. We expect our gadgets to get smaller and smarter, cooler and cheaper, because technology evolves exponentially, and at light speed.
But the Great Recession has also exposed our magical thinking about what constitutes a middle-class lifestyle. Flash back a generation to the house with the white picket fence. It had a black-and-white TV with an antenna, a car in the garage, a chicken in every pot and two kinds of lettuce (light green and dark green). Now the average house is more than 50% bigger, the car is twice as powerful (and there's often more than one), the TV is flat and gets 900 channels, and we expect the grocery store to have strawberries year-round and about 50 flavors of mustard. Small wonder we started charging our life-insurance premiums on our credit cards; we only expected to pay when we died.
So while optimism is the all-American anesthetic, at some point Expectation Inflation was bound to take its toll. I'm struck by how many people tell pollsters that the voluntary downshifting and downsizing of the past year have come as a kind of relief. Maybe we've lowered our standards. But we already knew that money can buy only comfort, not contentment; happiness correlates much more closely with our causes and connections than with our net worth. Americans may have less money — charitable giving in current dollars dropped for the first time in 20 years in 2008 — but about a million more people volunteered their time to a cause. Which makes me wonder: Is it a coincidence that eight of the 10 happiest states in the country also rank in the top 10 for volunteering?
Whatever you make of the psychology of happiness, we know something of its physics. It rises as it ricochets off other people, returning to us stronger by virtue of being released. It gets bigger when we don't care if it gets smaller; we stopped buying all the stuff we didn't need that was supposed to make us happier, and we seem to be happier for it. And who would have expected that?
Nancy Gibbs, Time Magazine, 11/23/2009
In January 2008, the Gallup-Healthways Well-Being Index was launched. It was designed to work like a Dow Jones average of attitude. At least 1,000 people are surveyed daily, 350 days a year. (You can see how happy people are broken down by congressional district; Utah turns out to be the merriest state, West Virginia the glummest.) When the markets tanked last fall, happiness did too, and anyone who has lost his or her job, house or health care is probably still in a world of pain. But here's the funny thing: by this past summer, overall well-being was higher than it was in the summer of 2008, before the Apocalypse. In fact, the latest report finds America's cheeriness at an all-time high. An August report from the Pepsi Optimism Project (POP) positively fizzed: Americans are more optimistic now than a year ago about their well-being (88% vs. 84%); health, finances, relationships and odds of finding love (70% vs. 61%). Don't trust soda-company polls? Consumer Reports confirms that we don't plan to spend much money this Christmas, but the vast majority of us — 87% — expect this holiday season will be as happy as or even happier than last year's. Meanwhile, the Secret Society of Happy People (which "encourages the expression of happiness and discourages parade-raining") reports traffic to its not-so-secret website has increased since the downturn.
Everyone — or at least everyone who claims to be happy — has some reason for finding the upside to the downturn. Mine has to do with the end of Expectation Inflation, a phenomenon that can be as corrosive to our spirits as price inflation is to our savings. Expectations are a mash-up of hope and conceit, what you've earned and what you imagine luck might hand you as a bonus for just showing up. So what did it mean that over the past generation our expectations grew so big so fast that we had effectively supersized the American Dream?
Some parts of raised expectations are plainly good. We expect to live well into our 80s because medicine keeps getting better. Many more high school students expect to go to college. In 1973, 47% of recent high school graduates attended college; last year 69% of new graduates enrolled. We expect our gadgets to get smaller and smarter, cooler and cheaper, because technology evolves exponentially, and at light speed.
But the Great Recession has also exposed our magical thinking about what constitutes a middle-class lifestyle. Flash back a generation to the house with the white picket fence. It had a black-and-white TV with an antenna, a car in the garage, a chicken in every pot and two kinds of lettuce (light green and dark green). Now the average house is more than 50% bigger, the car is twice as powerful (and there's often more than one), the TV is flat and gets 900 channels, and we expect the grocery store to have strawberries year-round and about 50 flavors of mustard. Small wonder we started charging our life-insurance premiums on our credit cards; we only expected to pay when we died.
So while optimism is the all-American anesthetic, at some point Expectation Inflation was bound to take its toll. I'm struck by how many people tell pollsters that the voluntary downshifting and downsizing of the past year have come as a kind of relief. Maybe we've lowered our standards. But we already knew that money can buy only comfort, not contentment; happiness correlates much more closely with our causes and connections than with our net worth. Americans may have less money — charitable giving in current dollars dropped for the first time in 20 years in 2008 — but about a million more people volunteered their time to a cause. Which makes me wonder: Is it a coincidence that eight of the 10 happiest states in the country also rank in the top 10 for volunteering?
Whatever you make of the psychology of happiness, we know something of its physics. It rises as it ricochets off other people, returning to us stronger by virtue of being released. It gets bigger when we don't care if it gets smaller; we stopped buying all the stuff we didn't need that was supposed to make us happier, and we seem to be happier for it. And who would have expected that?
Nancy Gibbs, Time Magazine, 11/23/2009
All The Single Ladies!
All the Single Ladies!
Single Women Homebuyers
Single women account for the fastest growing segment of the home-buying population in the U.S. This trend has been on the rise for many years. From 1994 to 2002, the number of unmarried women owning homes climbed from 13.9 million to 17.5 million. By 2004, 18% of all homebuyers were single women. According to the latest NAR profile of homebuyers and sellers, that number has risen to 22%.
Factors leading to this increase include the following demographic trends: better education, more women working and seeking financial independence, and young women delaying marriage. Also, women have significantly increased their purchasing power. They own and operate 38% of all businesses in America and make up nearly 40% of all business school graduates. More immediately, historically low interest rates, affordable home prices, ample housing supply and the first-time homebuyer tax credit are fueling the increase of single women homebuyers.
Statistically, women do more research and spend a longer period of time searching for a home. They’re also more inclined to make home repairs. Studies show that nearly half of all purchases made in Home Depot and Lowes are made by women. And 94% of women homeowners claimed to have completed a home improvement project by themselves in the last five years.
Some home characteristics that experts say appeal to women: a safe community (single women account for a large number of condominium purchases where they find a sense of security), a home office (home-based businesses are very popular among women), maintenance friendly yards, lots of storage, and natural light, particularly in the master suite and bathroom. Statistically, women are also more likely to work with female mortgage brokers, attorneys and real estate professionals.
Single Women Homebuyers
Single women account for the fastest growing segment of the home-buying population in the U.S. This trend has been on the rise for many years. From 1994 to 2002, the number of unmarried women owning homes climbed from 13.9 million to 17.5 million. By 2004, 18% of all homebuyers were single women. According to the latest NAR profile of homebuyers and sellers, that number has risen to 22%.
Factors leading to this increase include the following demographic trends: better education, more women working and seeking financial independence, and young women delaying marriage. Also, women have significantly increased their purchasing power. They own and operate 38% of all businesses in America and make up nearly 40% of all business school graduates. More immediately, historically low interest rates, affordable home prices, ample housing supply and the first-time homebuyer tax credit are fueling the increase of single women homebuyers.
Statistically, women do more research and spend a longer period of time searching for a home. They’re also more inclined to make home repairs. Studies show that nearly half of all purchases made in Home Depot and Lowes are made by women. And 94% of women homeowners claimed to have completed a home improvement project by themselves in the last five years.
Some home characteristics that experts say appeal to women: a safe community (single women account for a large number of condominium purchases where they find a sense of security), a home office (home-based businesses are very popular among women), maintenance friendly yards, lots of storage, and natural light, particularly in the master suite and bathroom. Statistically, women are also more likely to work with female mortgage brokers, attorneys and real estate professionals.
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