April 2011 U.S. Economic Fundamentals
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NAR opposes high down payment requirement
High down payment requirements being proposed by federal regulatory agencies as part of the upcoming rule-making under the Dodd-Frank Wall Street Reform and Consumer Protection Act will unnecessarily burden home buyers and significantly impede the economic and housing recovery, according to the National Association of REALTORSÂ.
Six agencies (including the Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission) are developing a proposed risk retention regulation under the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a qualified residential mortgage (QRM); FHA and VA mortgages would also be exempted. The purpose is to create strong incentives for responsible lending and borrowing.
`As the leading advocate for home ownership, NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,` said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. `A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.`
Read the full article here.
High down payment requirements being proposed by federal regulatory agencies as part of the upcoming rule-making under the Dodd-Frank Wall Street Reform and Consumer Protection Act will unnecessarily burden home buyers and significantly impede the economic and housing recovery, according to the National Association of REALTORSÂ.
Six agencies (including the Department of Housing and Urban Development, Federal Deposit Insurance Corp., Federal Housing Finance Agency, Federal Reserve, Office of the Comptroller of the Currency, and the U.S. Securities and Exchange Commission) are developing a proposed risk retention regulation under the Dodd-Frank Act that requires lenders that securitize mortgage loans to retain 5 percent of the credit risk unless the mortgage is a qualified residential mortgage (QRM); FHA and VA mortgages would also be exempted. The purpose is to create strong incentives for responsible lending and borrowing.
`As the leading advocate for home ownership, NAR supports a reasonable and affordable cash investment requirement coupled with quality credit standards, strong documentation and sound underwriting,` said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. `A narrow definition of QRM, with an unnecessarily high down payment requirement, will increase the cost and reduce the availability of mortgage credit, significantly delaying a housing recovery.`
Read the full article here.
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Real estate crash catches up to cities as property taxes slide
The real-estate crash is catching up to U.S. municipalities.
Cities, counties and school districts had been sheltered from the full impact of the slump because of the lag between when realty prices fluctuate and values are reset by local tax assessors. That`s changing as property rolls are adjusted to the current market and residents push to have their taxes cut.
Local officials are now facing the consequences. Property- tax revenue dropped in the last three months of 2010 at the fastest pace since home prices slipped from their peak more than four years ago, the Census Bureau said yesterday. The decline may continue as values fall further, adding strains to cash- strapped localities that already fired workers, halted projects and cut spending because of the recession that began in 2007.
Read the full article here.
The real-estate crash is catching up to U.S. municipalities.
Cities, counties and school districts had been sheltered from the full impact of the slump because of the lag between when realty prices fluctuate and values are reset by local tax assessors. That`s changing as property rolls are adjusted to the current market and residents push to have their taxes cut.
Local officials are now facing the consequences. Property- tax revenue dropped in the last three months of 2010 at the fastest pace since home prices slipped from their peak more than four years ago, the Census Bureau said yesterday. The decline may continue as values fall further, adding strains to cash- strapped localities that already fired workers, halted projects and cut spending because of the recession that began in 2007.
Read the full article here.
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One in five Canadians eyeing U.S. housing market
The U.S. housing market continues along its dismal trajectory, with overall prices dropping slightly again in February from the previous month. The median existing house price is now $156,100, which is more than 30% below the peak four years ago. Meantime, there is now 8.6 months supply and not one economist on a housing panel sees the possibility that prices will recover in five years to pre-bubble levels.
So what is the reaction of many Canadians to their American neighbours` misfortune?
Yippee, say some Canadians who have been watching the U.S. housing collapse and rubbing their hands in anticipation of scooping up bargains. A recent survey for BMO Bank of Montreal by Leger Marketing shows that an astonishing one in five Canadians would consider buying a U.S. property.
Read the full article here.
The U.S. housing market continues along its dismal trajectory, with overall prices dropping slightly again in February from the previous month. The median existing house price is now $156,100, which is more than 30% below the peak four years ago. Meantime, there is now 8.6 months supply and not one economist on a housing panel sees the possibility that prices will recover in five years to pre-bubble levels.
So what is the reaction of many Canadians to their American neighbours` misfortune?
Yippee, say some Canadians who have been watching the U.S. housing collapse and rubbing their hands in anticipation of scooping up bargains. A recent survey for BMO Bank of Montreal by Leger Marketing shows that an astonishing one in five Canadians would consider buying a U.S. property.
Read the full article here.
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Forget Ireland and Greece, here's what country the U.S. is really in danger of becoming
People frequently claim that if the US doesn't watch out, it's in danger of becoming Ireland or Greece.
This is nonsense, since the US debt/monetary situation is nothing like Ireland or Greece's. It controls and borrows in its own money. In that respect, it's much more like Japan, which after years and years of people warning about its finances pays virtually nothing interest.
But there is a cautionary tale out there.
It's not Ireland and it's not Japan. It's the UK.
Read the full article here.
People frequently claim that if the US doesn't watch out, it's in danger of becoming Ireland or Greece.
This is nonsense, since the US debt/monetary situation is nothing like Ireland or Greece's. It controls and borrows in its own money. In that respect, it's much more like Japan, which after years and years of people warning about its finances pays virtually nothing interest.
But there is a cautionary tale out there.
It's not Ireland and it's not Japan. It's the UK.
Read the full article here.
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Overhaul needed of U.S. housing finance: IMF
Americans would rather lead than follow. But when it comes to housing finance, the International Monetary Fund would like to see the United States take lessons from some of its peers.
In its twice-annual review of the global financial system, the IMF singles out the United States for special attention in a chapter devoted to the role housing finance plays in causing instability in housing markets.
Read the full article here.
Americans would rather lead than follow. But when it comes to housing finance, the International Monetary Fund would like to see the United States take lessons from some of its peers.
In its twice-annual review of the global financial system, the IMF singles out the United States for special attention in a chapter devoted to the role housing finance plays in causing instability in housing markets.
Read the full article here.
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Shouldn't the market be losing faith in the U.S. right about now?
One of the arguments made for doing something about the debt now is that if we don't show some seriousness about fiscal consolidation, the market will lose confidence in us.
Under this logic, shouldn't the market be losing confidence NOW?
After all, this budget negotiation is totally pathetic. We can't even agree on $33 billion worth of cuts, and even at this level, the debate is getting infused with stuff about NPR and EPA funding and abortion. Really, it's totally silly.
Read the full article here.
One of the arguments made for doing something about the debt now is that if we don't show some seriousness about fiscal consolidation, the market will lose confidence in us.
Under this logic, shouldn't the market be losing confidence NOW?
After all, this budget negotiation is totally pathetic. We can't even agree on $33 billion worth of cuts, and even at this level, the debate is getting infused with stuff about NPR and EPA funding and abortion. Really, it's totally silly.
Read the full article here.
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For U.S. housing, a new collapse
Bordered to the west by idyllic Gulf of Mexico beaches and to the east by the natural bounty of the Everglades, upscale Naples is one of Florida`s premier retirement destinations.
Naples` charms made it an epicentre for the Florida property boom, where unfettered speculation and limitless credit lifted property values to the stratosphere.
Five years ago, the housing market in Naples was pegged as the country`s most overvalued, with single-family homes estimated to cost 85% more than they should. Now, one in three of those homes sits vacant, a testament to how deep the housing crisis runs in the United States and a signal that a recovery in real estate may not be in reach after all.
Read the full article here.
Bordered to the west by idyllic Gulf of Mexico beaches and to the east by the natural bounty of the Everglades, upscale Naples is one of Florida`s premier retirement destinations.
Naples` charms made it an epicentre for the Florida property boom, where unfettered speculation and limitless credit lifted property values to the stratosphere.
Five years ago, the housing market in Naples was pegged as the country`s most overvalued, with single-family homes estimated to cost 85% more than they should. Now, one in three of those homes sits vacant, a testament to how deep the housing crisis runs in the United States and a signal that a recovery in real estate may not be in reach after all.
Read the full article here.
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Cheap Florida real estate tempting for Snowbirds, but beware of trap
Sure, it`s spring now. But have you forgotten last month? It was -20C with the windchill. The sleet slapped your face. Even in winter proof boots your toes went numb.
Did it ever cross your mind that warmer climes might be more your style?
Or perhaps you`d like to invest in property but you`ve given up waiting for the Toronto real estate market to retreat enough to make one of those tiny, trendy condos financially viable.
Read the full article here.
Sure, it`s spring now. But have you forgotten last month? It was -20C with the windchill. The sleet slapped your face. Even in winter proof boots your toes went numb.
Did it ever cross your mind that warmer climes might be more your style?
Or perhaps you`d like to invest in property but you`ve given up waiting for the Toronto real estate market to retreat enough to make one of those tiny, trendy condos financially viable.
Read the full article here.
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The state of the U.S. economy in two graphs
Jobs and housing may be the two biggest clouds hanging over the U.S. economy right now.
They've been moving in opposite directions for the past several months, and a couple reports out today show that the trends are continuing: The job market is getting better, and the housing market is getting worse.
Read the full article here.
Jobs and housing may be the two biggest clouds hanging over the U.S. economy right now.
They've been moving in opposite directions for the past several months, and a couple reports out today show that the trends are continuing: The job market is getting better, and the housing market is getting worse.
Read the full article here.
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Buying a home in the U.S. fraught with pitfalls
CALGARY, AB, Apr. 10, 2011/ Troy Media/ ` With the Canadian dollar on a tear this week, popping above US$1.04 to buy one loonie, it`s not surprising that many canucks feel the urge to look at investing in some U.S. assets.
This is particularly true during the winter of 2010-11 which has seemed endless in Alberta. The idea of a home in Arizona, Nevada or anywhere sunny and warm is appealing.
Golfing in January aside, there are several things to keep in mind about buying real estate south of the border.
Get expert advice
First of all, for anyone looking to invest their money, it`s important that they seek out professional investment advice. Smart investment decisions are unique to the individual making the purchase, so there is never a `one-size-fits-all` investment strategy. And, in some cases, buying a home in the U.S. may make sense.
Read the full article here.
CALGARY, AB, Apr. 10, 2011/ Troy Media/ ` With the Canadian dollar on a tear this week, popping above US$1.04 to buy one loonie, it`s not surprising that many canucks feel the urge to look at investing in some U.S. assets.
This is particularly true during the winter of 2010-11 which has seemed endless in Alberta. The idea of a home in Arizona, Nevada or anywhere sunny and warm is appealing.
Golfing in January aside, there are several things to keep in mind about buying real estate south of the border.
Get expert advice
First of all, for anyone looking to invest their money, it`s important that they seek out professional investment advice. Smart investment decisions are unique to the individual making the purchase, so there is never a `one-size-fits-all` investment strategy. And, in some cases, buying a home in the U.S. may make sense.
Read the full article here.
- Joined
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Buying a home in the U.S. fraught with pitfalls
CALGARY, AB, Apr. 10, 2011/ Troy Media/ ` With the Canadian dollar on a tear this week, popping above US$1.04 to buy one loonie, it`s not surprising that many canucks feel the urge to look at investing in some U.S. assets.
This is particularly true during the winter of 2010-11 which has seemed endless in Alberta. The idea of a home in Arizona, Nevada or anywhere sunny and warm is appealing.
Golfing in January aside, there are several things to keep in mind about buying real estate south of the border.
Get expert advice
First of all, for anyone looking to invest their money, it`s important that they seek out professional investment advice. Smart investment decisions are unique to the individual making the purchase, so there is never a `one-size-fits-all` investment strategy. And, in some cases, buying a home in the U.S. may make sense.
Read the full article here.
CALGARY, AB, Apr. 10, 2011/ Troy Media/ ` With the Canadian dollar on a tear this week, popping above US$1.04 to buy one loonie, it`s not surprising that many canucks feel the urge to look at investing in some U.S. assets.
This is particularly true during the winter of 2010-11 which has seemed endless in Alberta. The idea of a home in Arizona, Nevada or anywhere sunny and warm is appealing.
Golfing in January aside, there are several things to keep in mind about buying real estate south of the border.
Get expert advice
First of all, for anyone looking to invest their money, it`s important that they seek out professional investment advice. Smart investment decisions are unique to the individual making the purchase, so there is never a `one-size-fits-all` investment strategy. And, in some cases, buying a home in the U.S. may make sense.
Read the full article here.
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U.S. home prices will slide more: Economist
TORONTO . U.S. housing prices will continue to fall well into next year, continuing to put pressure on an American economy that is struggling to sustain its recovery.
That is the view from Paul Dales, senior U.S. economist with Capital Economics.
"Most analysts expect prices to stop falling by the second half of this year -we believe they're wrong," he said Monday at Capital Economic's annual conference in Toronto.
Mr. Dales said that the excess of foreclosed homes set to be sold this year and next will likely push down prices by 5% by the end of 2011.
Read the full article here.
TORONTO . U.S. housing prices will continue to fall well into next year, continuing to put pressure on an American economy that is struggling to sustain its recovery.
That is the view from Paul Dales, senior U.S. economist with Capital Economics.
"Most analysts expect prices to stop falling by the second half of this year -we believe they're wrong," he said Monday at Capital Economic's annual conference in Toronto.
Mr. Dales said that the excess of foreclosed homes set to be sold this year and next will likely push down prices by 5% by the end of 2011.
Read the full article here.
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Only recessions can deliver Obama's energy targets
Like many in the White House before him, President Barack Obama charted out a plan last week to reduce America`s dependence on foreign oil. And like his predecessors, his road map to cut U.S. oil imports by one-third over the next decade comes against the backdrop of sharply rising oil prices and supply disruptions from an increasingly volatile Middle East.
Read the full article here.
Like many in the White House before him, President Barack Obama charted out a plan last week to reduce America`s dependence on foreign oil. And like his predecessors, his road map to cut U.S. oil imports by one-third over the next decade comes against the backdrop of sharply rising oil prices and supply disruptions from an increasingly volatile Middle East.
Read the full article here.
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The 10 fastest dying industries in America
Do you remember the last time you walked into an HMV store in the US? It would have been in 2004. Then Virgin closed shop. So did thousands of smaller stores.
Record stores, newspaper publishing and apparel manufacturing are some of the industries that appear on this list.
Technological development, cheap foreign competitors and a general stagnation have led to the demise of the 10 industries on this list that together had a $283 billion turnover in 2010, according to IBISWorld.
Read the full article here.
Do you remember the last time you walked into an HMV store in the US? It would have been in 2004. Then Virgin closed shop. So did thousands of smaller stores.
Record stores, newspaper publishing and apparel manufacturing are some of the industries that appear on this list.
Technological development, cheap foreign competitors and a general stagnation have led to the demise of the 10 industries on this list that together had a $283 billion turnover in 2010, according to IBISWorld.
Read the full article here.
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Oil price 'great concern' for economy: U.S. energy secretary
ABU DHABI ` U.S. Energy Secretary Steven Chu said on Thursday high oil prices posed a threat to the global economy.
`The oil producer countries and the oil consuming countries are concerned because it does have an impact on a very fragile economic recovery. There is great concern,` Chu told a news conference while attending a clean energy conference.
`There`s ongoing discussions ... I`m not going to go into any of the details of the discussions. There is a concern about trying to stabilize prices. There is a concern about rising prices,` he said.
Read the full article here.
ABU DHABI ` U.S. Energy Secretary Steven Chu said on Thursday high oil prices posed a threat to the global economy.
`The oil producer countries and the oil consuming countries are concerned because it does have an impact on a very fragile economic recovery. There is great concern,` Chu told a news conference while attending a clean energy conference.
`There`s ongoing discussions ... I`m not going to go into any of the details of the discussions. There is a concern about trying to stabilize prices. There is a concern about rising prices,` he said.
Read the full article here.
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U.S. core producer prices, jobless claims rise
Reuters - Prices paid by U.S. factories picked up pace in March as the disruption caused by Japan's earthquake began to be felt in the auto industry and fuel prices rose strongly.
Another report on Thursday showed a surprise jump in U.S. jobless claims that raised some questions among investors about the health of the labor market recovery, though economists said the number could be a one-off.
Core U.S. producer prices rose slightly faster than expected in March from February and the increase from a year ago was the largest since August 2009.
The Labor Department said its seasonally adjusted index for prices paid at the farm and factory gate -- excluding volatile food and energy costs -- rose 0.3 percent after gaining 0.2 percent in February.
Read the full article here.
Reuters - Prices paid by U.S. factories picked up pace in March as the disruption caused by Japan's earthquake began to be felt in the auto industry and fuel prices rose strongly.
Another report on Thursday showed a surprise jump in U.S. jobless claims that raised some questions among investors about the health of the labor market recovery, though economists said the number could be a one-off.
Core U.S. producer prices rose slightly faster than expected in March from February and the increase from a year ago was the largest since August 2009.
The Labor Department said its seasonally adjusted index for prices paid at the farm and factory gate -- excluding volatile food and energy costs -- rose 0.3 percent after gaining 0.2 percent in February.
Read the full article here.
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Is the U.S. the new Greece? (Investors can buy Canada)
Here's what Pierre Lapointe and Alex Bellefleur said in the wake of yesterdays decision by Standard & Poor's to downgrade its outlook on the United States:
"Fiscal austerity of about 5 per cent of GDP is needed in order to restore the sustainability of its debt-to-GDP ratio. This is not inconsequential and will provide a headwind to the U.S. economy some time down the road. Whereas we initially thought austerity would be delayed until after the next federal election, we think the negative outlook from S&P might provide impetus for the current administration to front-load some austerity measures. The warning will increase the need for the current President to bolster his credentials as a responsible fiscal manager."
Read the full article here.
Here's what Pierre Lapointe and Alex Bellefleur said in the wake of yesterdays decision by Standard & Poor's to downgrade its outlook on the United States:
"Fiscal austerity of about 5 per cent of GDP is needed in order to restore the sustainability of its debt-to-GDP ratio. This is not inconsequential and will provide a headwind to the U.S. economy some time down the road. Whereas we initially thought austerity would be delayed until after the next federal election, we think the negative outlook from S&P might provide impetus for the current administration to front-load some austerity measures. The warning will increase the need for the current President to bolster his credentials as a responsible fiscal manager."
Read the full article here.