Fix jobs and housing will follow
Obama proposes jobs bill
President Obama addressed lawmakers in a press conference yesterday urging them to vote in favor of a $447 billion jobs bill: Read the rest of this entry »
Which major U.S. cities are poised for a housing pop?
While it may seem like doom and gloom are the dual engines driving the U.S. real estate market these days, the truth is, there are several markets out there that are poised for improvement in the near future.
HSH.com put together a list of five housing markets which are poised for a pop. We examined home prices, the city’s cost of living index, local unemployment and more.
Will the jobs report cause mortgage rates to fall?
It’s the first Friday of the month so that means the Labor Department has released their jobs report from the previous month. Even though December registered an increase of 103,000 private-sector jobs last month, it wasn’t quite as much as many economists were hoping for. Some good news is that both the November and October numbers have been revised upward by 70,000 jobs.
The unemployment rate fell from 9.8 percent in November to 9.4 percent in December, marking the largest one-month decline since April 1998. There are a couple factors that likely led to the lowest unemployment rate since May 2009; for starters, more individuals may have given up looking for work and so don’t count towards the unemployment rate. Another reason could be that more workers found jobs at companies not included in the government payroll survey, but may have been captured in the ADP report which registered an employment increase of nearly three times what the Labor Department reported.
Weak economic growth means low(er) mortgage rates
A lack of economic growth translates to, among many other things, a lack of employment opportunities. That was quite evident in September’s employment report:
After a two-quarter decline down to a 1.7% GDP, the economy may have stopped skidding in September. This deceleration has left growth at a place where there is insufficient demand to create many job opportunities, and without an expanding labor market, inflation remains tomorrow’s problem.
Will we eventually recover, or is this the new normal?
A new survey suggests that a growing number of Americans believe that the economy won’t return to pre-recession levels for years to come:
Fifty-nine percent of Americans feel “not good” or “bad” about the direction the economy is headed, up from 49% in May. And 76% don’t expect their quality of life, including their spending levels, to return to pre-recession levels until 2012 at the earliest, up from 63% who said that in May. That’s according to the findings of a survey released today by AlixPartners LLP, the global business-advisory firm.
Is it any wonder why we haven’t recovered?
For a mortgage blog, the subject of jobs has come up quite a lot here recently. The reason being, as noted here quite often, jobs play an essential role in maintaining the housing market’s health, vibrancy and sustainability. Steady jobs produce consumer confidence; it’s as simple as that. Consumers who have a steady paycheck are far more likely to buy and refinance. Also, if you’re employed, you are better suited to handle costs increases in everything from your monthly payment to an unexpected home repair.
The minutes from the Federal Open Market Committee’s (FOMC) latest meeting were released last week, confirming the important connection between jobs and housing: Read the rest of this entry »
Weekly Recap (8/30/10-9/4/10)
Saturday
“Initial homebuyer tax credit numbers are in“:
The Government Accountability Office (GAO) has released its report on how many homebuyers took advantage of the credit so far, and how much it cost us:
1 million buyers have claimed $7.3 billion of the repayable, $7500 tax credit for first-time buyers.
Obama addresses weak job growth
Each post that we wrote this week highlights a different problem that is holding back this country’s housing market: low rates aren’t enough, today’s mortgage market is mostly made up of the haves and the have nots, lowering home prices won’t create a more stable market and yesterday’s post discussed how the American dream of homeownership doesn’t have to turn into a nightmare. Each one of those posts identified something different that’s going wrong with housing.
But what good is identifying a problem if you can’t think of a way to fix it?
Lowering home prices won’t solve our problems
When asked whether Washington would consider instituting another homebuyer tax credit, HUD secretary Shaun Donovan responded saying, “I think it’s too early to say after one month of numbers whether the tax credit will be revived or not. All I can tell you is that we are watching very carefully.” Donovan’s comments have created a whirlwind of speculation that the government will once again step in and distort an already-unbalanced housing market.
Striking a balance
Giving the recession a visual representation
Unemployment’s influence on the struggling housing market is one connection that’s easily equated. Homebuyers need to feel absolutely confident that their income stream isn’t going to alter or falter before they make what’s likely to be the biggest transaction of their lives.
Today’s existing-home sales numbers were absolutely dismal. According to the National Association of Realtors (NAR), existing-home sales fell 27.2 percent in July from the month prior: Read the rest of this entry »
