Each year for 10 years prior to 2008 Americans saving rate was $250 billion (2.5% of disposable income) per year, while their debt to income was rising. Now, for the past three years, savings rate has been $600 billion per year with debt decreasing.
over the past 12 months, prices have fallen in all but two cities: Detroit and Washington. Home prices increased in July from June in 17 of the 20 cities tracked. Fourth straight month in most major U.S. cities in July, buoyed by the peak buying season, all according to Standard & Poor’s/Case-Shiller index.
initial reaction by the stock market was negative. The idea of the Fed pushing interest rates even lower indicates the economy is weak. Well, it is! Besides pushing longer treasury rates lower, the Fed plans to reinvest principal payments from its current holdings of agency debt and agency mortgage-backed securities into agency MBS. In other words, the Fed is going to be buying paper from Fannie Mae and Freddie Mac again “to help support conditions in mortgage markets” to help the housing market. FSBO.com is seeing a slight easing in credit requirements, based on reports by home buyers and investors
to International buyers, U.S. real estate is the new undervalued asset, the new fire sale. International buyers bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida, international buyers account for a third of purchases, up from 10 percent in 2007. “Luxury properties are drawing buyers from all over the world,” says CoreLogic’s chief economist, Mark Fleming.
The Commerce Department reported today that builders began work on a seasonally adjusted 571,000 homes last month, a 5 percent decline from July and a three-month low. That’s less than half the 1.2 million that economists say is consistent with healthy housing markets.
not working as states move very slow to help the jobless make mortgage payments, reported by USA Today.
Freddie Mac says the average rate on the 30-year fixed mortgage fell to 4.09 percent this week, down from 4.12 percent. That’s the lowest rate seen since 1951. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Yet, banks own over 1 million vacant foreclosed homes they can’t sell. It is up to them to solve the problem.
up 7% compared to July, but were still 33% lower than they were a year ago — marking the eleventh straight month of year-over-year declines, according to RealtyTrac, an online marketer of foreclosed properties. Meanwhile, foreclosure auctions were scheduled for 84,405 homes, the lowest number in more than three years. Is the cup half empty or half full?
good ideas by the President, but all involve spending money. Here is FSBO.com’s idea of jobs creation and economic stimulus without Govt spending:
Sell all FNMA, Freddie and HUD homes by year end with the following incentives:
1. with 20% down, no credit report needed, 5% rate on a 15 yr mortgage
2. no capital gains tax when these properties are resold
Credit reports did not prevent the financial and housing problems, but they are getting in the way of a rebound in values!! These properties require materials purchased and labor hired to fix them up, thus increase home values!! Everybody wins and no govt money spent!!
Reversing an upward trend that has been almost uninterrupted since Thomas Edison invented the modern light bulb. The reasons are many, such as; efficient types of lighting and electric devices, home energy savings programs, and in tough times, people do turn off things when not in use.