housing market http://www.wisebread.com/taxonomy/term/10613/all en-US 6 Important Things You Need to Know About the Housing Market in 2016 http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-important-things-you-need-to-know-about-the-housing-market-in-2016" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/housing_market_000074855705.jpg" alt="Learning important changes coming to housing market in 2016" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Buying a home is still part of the American dream.</p> <p>According to a survey from Trulia, 75% of Americans dream of owning a home, up 1% from 2015. This dream is even more pressing among Millennials because 80% of those surveyed would like to buy a home &mdash; and 31% would like to do so by 2018.</p> <p>Whether you're looking to buy a home this year or already own one, there are important factors that will affect your investment. Here are the six important things you need to know about the housing market in 2016.</p> <h2>1. Mortgage Rates Are Staying Low (For Now!)</h2> <p>The Fed's December 2015 interest rate hike had many consumers worried that rock-bottom mortgage rates would finally come to an end. However, the economic events of the first two weeks of 2016 show that low mortgage rates will stick around for a bit longer.</p> <p>Given the lackluster performance of the stock market, many investors are buying bonds and driving down the yields of these investment vehicles. This is great news for those looking for a home loan, because the interest rates on 30-year mortgage loans are highly correlated with the yield of the U.S. Treasury 10-year bond. According to data from the Federal Reserve Bank of St. Louis, the average 30-year fixed rate mortgage average in the U.S. was <a href="https://research.stlouisfed.org/fred2/series/MORTGAGE30US">3.97% on January 7, 2016</a>, down from 4.1% in December 31, 2015.</p> <h2>2. HARP Refinance Deadline Receives Extension</h2> <p>Many experts expect mortgage interest rates to increase further down the road. Those mortgage holders that haven't been able to refinance to a lower rate yet should think about doing so this year &mdash; especially homeowners that are underwater on their mortgages.</p> <p>As of January 2015, about 700,000 borrowers who owed more than their homes were worth were <a href="http://www.nytimes.com/2015/01/24/your-money/700000-homeowners-could-still-benefit-from-us-harp-refinancing-program.html?_r=0">still eligible to refinance</a> their loans through the HARP program from the Federal Housing Finance Agency (FHFA). HARP was originally set to expire at the end of 2015, but it was extended for an additional year, until the end of 2016.</p> <p>Nearly 3.3 million Americans have benefited from a HARP refinance to lower their monthly payments on their mortgages. The five basic requirements to qualify for a HARP refinance are:</p> <ul> <li>Loan was originated on or before May 31, 2009.<br /> &nbsp;</li> <li>Property is a primary residence, one-unit second home, or one- to four-unit investment property.<br /> &nbsp;</li> <li>Loan is owned by Freddie Mac or Fannie Mae.<br /> &nbsp;</li> <li>Current loan-to-value ratio must be greater than 80%.<br /> &nbsp;</li> <li>Borrower is current on the mortgage, with no over-30-day late payments in the last six months and no more than one in the past 12 months.</li> </ul> <p>There are still close to 430,000 HARP-eligible loans out there and you can check the <a href="http://harp.gov/Default.aspx?Page=363">eligibility of loans</a> by zip code.</p> <h2>3. Home Prices Are Rising Less Than in Previous Years</h2> <p>One of the <a href="http://www.wisebread.com/8-necessities-that-will-be-cheaper-in-2016">necessities that will be cheaper in 2016</a> is the single-family home. In 2016, the national average price for a single-family home is expected to be 3% higher than last year, a much slower rate of growth than 2015's 5% increase.</p> <p>However, some markets will experience bigger price bumps, such as Sacramento, California with an expected 15% increase, and other markets will experience smaller price bumps, such as Houston, Texas with an expected 1.1% increase.</p> <h2>4. Rent Prices Are Increasing Faster</h2> <p>On the other hand, rent prices are expected to increase sharply. In the third quarter of 2015, U.S. home buyers were spending <a href="http://www.zillow.com/research/q3-2015-mortgage-rent-affordability-11197/">15% of their monthly income</a> on the mortgage payment of a typical home, while U.S. renters were spending 30% of their monthly income on the rent payment of a median-valued property.</p> <p>Higher rent prices will continue to be norm in 2016. According to a survey of more than 500 large U.S. property managers, <a href="http://www.rent.com/blog/2015-rental-market-report/">rental inventory</a> is at the lowest level in over 20 years.</p> <p>A smaller inventory of available units for rent enables landlords to demand higher prices from renters. Of the surveyed property managers, 55% reported to be &quot;less likely to offer concessions or lower rents to fill vacancies&quot; and 68% of them expected to continue raising their rental rates in 2016 by an average of 8%.</p> <h2>5. New FHA Loan Limits Take Effect</h2> <p>On December 9, 2015, the Federal Housing Administration (FHA) announced its new schedule of <a href="http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2015/HUDNo_15-156">loan limits for 2016</a>. FHA home loans allow homebuyers to access financing with a minimum 3.5% down payment of the market value of the property, among other requirements.</p> <p>Given the changes to median house prices in certain metropolitan areas, in 2016 the maximum FHA loan limit is higher in <a href="http://portal.hud.gov/hudportal/documents/huddoc?id=limitsincreasedcy15_cy16.pdf">188 counties</a>. However, the maximum nationwide FHA loan limit remains at $625,500 (here is a <a href="http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/lender/origination/mortgage_limits">list of areas</a> that are at the ceiling or that are considered &quot;high cost.&quot;)</p> <p>On the other hand, in 2016 the minimum FHA loan limit doesn't decrease for any areas in the country.</p> <h2>6. Fannie Mae Loosens Some Requirements</h2> <p>The Federal National Mortgage Association (FNMA), better known as Fannie Mae, is giving Americans a break in 2016. Through its new <a href="https://www.fanniemae.com/singlefamily/homeready">HomeReady mortgage program</a>, Fannie Mae aims to broaden access to home financing to credit-worthy low-to-moderate income borrowers.</p> <p>Some of the <a href="https://www.fanniemae.com/content/fact_sheet/homeready-overview.pdf">loosened requirements</a> from Fannie Mae include:</p> <ul> <li>Borrower isn't required to be a first-time homebuyer;<br /> &nbsp;</li> <li>Down payment can be as low as 3% of property's market value;<br /> &nbsp;</li> <li>Gifts, grants, and cash-on-hand are acceptable funds to cover downpayment and closing costs;<br /> &nbsp;</li> <li>Nontraditional credit is allowed;<br /> &nbsp;</li> <li>Income from non-borrower household members can be counted as part of the debt-to-income ratio of the borrower; and<br /> &nbsp;</li> <li>Underwriting process includes additional flexibilities.</li> </ul> <p>To learn more details about the HomeReady program, call 1-800-7FANNIE (1-800-732-6643) or visit <a href="http://www.fanniemae.com">FannieMae.com</a>.</p> <p><em>Do you expect 2016 to be better for the housing market &mdash; and your plans of owning a home?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-15"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-7-things-when-living-with-roommates">Avoid These 7 Things When Living With Roommates</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-smart-and-fun-things-you-could-do-if-you-paid-less-rent">8 Smart and Fun Things You Could Do if You Paid Less Rent</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/whats-faster-for-mortgage-payoff-100-month-extra-or-1-payment-year-extra">What&#039;s Faster for Mortgage Payoff: $100/Month Extra or 1 Payment/Year Extra?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-haggle-your-way-to-cheaper-rent">6 Ways to Haggle Your Way to Cheaper Rent</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-move-to-a-new-city-to-reduce-lifestyle-costs">Should You Move to a New City to Reduce Lifestyle Costs?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing fannie mae FHA HARP housing market loans mortgage rates rent Thu, 21 Jan 2016 14:00:03 +0000 Damian Davila 1642416 at http://www.wisebread.com Ask Yourself These 5 Questions Before Buying a Home http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/ask-yourself-these-5-questions-before-buying-a-home" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/family_new_house_000064268645.jpg" alt="Asking yourself 5 questions before buying a home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Buying a home is a major financial decision. The National Association of Realtors reported that in November 2015, the median sales price of existing homes hit $220,300, or 6.3% higher than in the same month one year earlier.</p> <p>As housing prices continue to climb, you need to make sure you're ready to make such a major investment. Here are five questions to ask to make sure that you are financially prepared for owning a home.</p> <h2>1. How Much Money Do You Spend and Earn Each Month?</h2> <p>Real estate professionals say that your total monthly housing expenses, including your estimated new mortgage payment, should never equal more than 28% of your gross monthly income. To know if you can afford your new home's mortgage payment, you'll have to first list what you're already spending each month on such items as car loans, student loans, groceries, and entertainment. (See also:&nbsp;<a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home">4 Easy Ways to Start Saving for a Down Payment on a Home</a>)</p> <p>&quot;Do I really know my current income and all expenses?&quot; asked Glenn Phillips, chief executive officer with Pelham, Alabama's Lake Homes Realty. &quot;If you know this for each month, you'll have a realistic understanding of how much money is available for both the purchase and monthly expenses of owning a home.&quot;</p> <p>Those monthly expenses are important, and can add up. And Phillips reminds homeowners that they'll need to budget money each month for additional expenses such as homeowners insurance, water, sewer, garbage pick-up, and of course, home maintenance.</p> <h2>2. How Handy Are You?</h2> <p>If you're handy enough to handle minor &mdash; or some major &mdash; home repairs and renovations on your own, you might be able to land a home in a desirable neighborhood for a cheaper price. Homes that need updates and renovations usually sell for less, which can be a positive for the handy homebuyer with a limited budget.</p> <p>But be careful: Home renovations might cost more than you think. If you're not able to do at least some of these renovations on your own, you might end up paying far more to update your home than you planned.</p> <p>&quot;Should I buy a home that needs no remodeling and is ready to move in at a higher price, rather than buying the same size home &mdash; but one that needs updating at perhaps a lower price?&quot; asked John Bodrozic, co-founder of digital home management site HomeZada. &quot;If I buy a home that needs some remodeling, how many projects are desired, and what is a realistic budget and time frame to get these projects done?&quot;</p> <h2>3. Can You Afford the Monthly Maintenance?</h2> <p>Having enough money to cover your mortgage, utility bills, property taxes, and homeowners insurance is one thing, but do you have enough dollars to cover the monthly upkeep involved with owning a home?</p> <p>A lot can go wrong with a home &mdash; even a new one. Your water heater might burst. Your roof might start leaking. Even smaller projects like maintaining your yard and landscaping can drain your dollars. It's important that new homeowners have enough financial slush in their accounts to handle the monthly cost of keeping a home running, said Melanie McShane, a real estate broker with Arcadia, California's BrokerInTrust Real Estate.</p> <p>&quot;Buying a home is just the beginning,&quot; McShane said. &quot;Once it is yours, you need to maintain and improve it. Replacing a roof or an AC unit are costly fixes. It is imperative that people have a small savings for the upkeep of the home.&quot;</p> <h2>4. How Strong Is Your Credit?</h2> <p>Your three-digit FICO credit score is an important number. Mortgage lenders will look at it to determine how likely you are to repay your mortgage loan. If your score is low &mdash; say under 640 &mdash; your lender will consider you a risk, and will charge you higher interest rates. If your score is in the excellent range &mdash; usually over 740 &mdash; your lenders will charge you far lower rates, making paying for a home more affordable.</p> <p>Remember that a lower credit score can make the entire process of buying a home more costly.</p> <p>&quot;Your credit is extremely important,&quot; said Michelle Richards, a real estate agent with RE/MAX Gold Coast Realty in Hoboken, New Jersey. &quot;The lower your credit score, the higher the down payment you'll need.&quot;</p> <h2>5. How Long Will You Live in Your Home?</h2> <p>If you don't plan on living in an area for at least five years, buying a home might not be a sound financial decision. Your home's value might not appreciate enough in such a short period of time to allow you to sell it for a high enough cost to cover your selling fees and make a profit, said Bill Golden, a real estate agent with RE/MAX Atlanta Cityside.</p> <p>&quot;Except in rare cases when you'd be buying into a rapidly appreciating market, or you're renovating a total fixer-upper, if you don't plan on staying more than a minimum of two to three years, it probably makes more sense for you to rent,&quot; Golden said. &quot;If you know that your job is going to move you again in two years, buying a home might not be the best solution for you.&quot;</p> <p><em>What questions did you ask before buying your home?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/2-things-you-must-know-about-the-new-mortgage-rules">2 Things You Must Know About the New Mortgage Rules</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-ways-to-finance-a-tiny-house">3 Ways to Finance a Tiny House</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-reasons-why-2015-is-the-year-to-buy-a-house">5 Reasons Why 2015 is the Year to Buy a House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">6 Important Things You Need to Know About the Housing Market in 2016</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/home-equity-loan-or-heloc-which-is-right-for-you">Home Equity Loan or HELOC: Which Is Right for You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing homeownership housing market mortgages new home Thu, 14 Jan 2016 14:00:03 +0000 Dan Rafter 1635471 at http://www.wisebread.com America Is On a Roll: 5 Economic Predictions for 2016 http://www.wisebread.com/america-is-on-a-roll-5-economic-predictions-for-2016 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/america-is-on-a-roll-5-economic-predictions-for-2016" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/child_business_career_000022805836.jpg" alt="Child making economic predictions for America for 2016" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The past year was a good year for the American economy, and many positive <a href="http://www.wisebread.com/america-is-back-4-economic-predictions-for-2015">economic predictions</a> came true. Signs seem to indicate that 2016 will be another good one, as the U.S. will continue to outperform its peers, with GDP growth ranging from 2.1% to 4%, according to data from the International Monetary Fund.</p> <p>Here is an updated look at the economic outlook for the U.S. in 2016 &mdash; including several reasons why our nation is on a roll.</p> <h2>1. Oil Continues to Be Cheap</h2> <p>Gasoline is one of the cheaper buys of 2015 that will likely continue to be affordable throughout 2016. As many economists lower their forecasts for average oil prices next year, U.S. consumers will continue to have more room in their monthly budgets.</p> <p>The U.S. Energy Information Administration currently predicts an average retail price (including taxes) of <a href="http://www.eia.gov/forecasts/steo/">$2.06 per gallon</a> for regular grade gasoline and of $2.52 per gallon for diesel fuel for January, 2016. Lower gas prices also have a positive trickle-down effect on several industries, including the airline and retail sectors. Expect several stocks in those sectors to do well.</p> <h2>2. American Debt Is Smaller</h2> <p>The current average U.S. household credit card debt is down from the high levels of the 2007&ndash;2009 recession. For example, the average debt per U.S. household was $7,421 in 2014, down from $8,832 in 2008.</p> <p>These lower debt levels allow the average consumer to bridge a cash crunch when needed. With more consumers reaching a FICO score of 800 (19.9%) and fewer ones scoring below 550, there is strong evidence that Americans are getting better at handling debt.</p> <h2>3. Millennials Are Buying Homes</h2> <p>Improving credit scores are allowing more Americans to have access to financing.</p> <p>Pundits love to focus on stereotypes when talking about the Millennial generation. But many are missing out on the fact that Millennials are dominating the housing market in several U.S. cities.</p> <p>During the first half of 2015, <a href="http://www.bloomberg.com/news/articles/2015-09-28/the-cities-where-millennials-are-taking-over-the-housing-market">60% of home buyers</a> using a mortgage in Des Moines, Iowa were ages 25 to 34. Other cities where Millennials have the highest share of mortgages are Provo, Utah (49%), Baton Rouge, Louisiana (47%), Pittsburgh, Pennsylvania (47%), and Grand Rapids, Michigan (46%).</p> <p>While 70% of Millennial college graduates are borrowing to pay for their education, they are still able to purchase homes due to two reasons:</p> <p>First, recipients of a four-year degree make an <a href="https://www.whitehouse.gov/sites/default/files/docs/millennials_report.pdf">estimated $570,000 more</a> in lifetime earnings than those who only have a high school diploma, and even recipients of a two-year degree make an estimated $170,000 more. Second, having at least a four-year degree increases the probability of homeownership, no matter the size of your student debt. For example, the probability of homeownership for recipients of bachelor's degrees and master's degrees are <a href="http://www.zillow.com/blog/student-debt-effect-homeownership-182547/">61% and 66%</a>, respectively.</p> <p>As more Millennials are taking out more mortgages, they appear to be very responsible with their monthly payments. The percentage of the U.S. population with delinquency of at least 90 days <a href="http://www.fico.com/en/blogs/risk-compliance/us-credit-quality-continues-climb-will-level/">dropped from 6.4%</a> in April 2014 to 5.1% in April 2015. This can also partly explain the improving FICO score levels.</p> <p>Millennial home purchasing is a sign of improving economic conditions, and starts off a chain reaction of positive effects. For example, a home may need renovations, so a homeowner hires a contractor &mdash; or a kitchen needs more energy efficient appliances, so a buyer visits an electronics store. As Millennials spend, the broader economy benefits.</p> <h2>4. Wages Continue to Increase</h2> <p>In 2015, several American cities enjoyed <a href="http://www.wisebread.com/6-american-cities-with-the-highest-minimum-wage">higher minimum wages</a>, and there will be many more in 2016.</p> <p>Here are some cities and states with scheduled minimum wage bumps for next year:</p> <ul> <li>Berkeley, California: $12.53 per hour in October 1, 2016 (currently $11.00 per hour)</li> <li>Connecticut: $9.60 per hour in January 1, 2016 (currently $9.15 per hour)</li> <li>District of Columbia: $11.50 per hour in July 1, 2015 (currently $10.50 per hour)</li> <li>Honolulu, Hawaii: $8.50 per hour in January 1, 2016 (currently $7.75 per hour)</li> <li>San Francisco, California: $13.00 per hour in July 1, 2016 (currently $12.25 per hour)</li> <li>Vermont: $9.60 per hour in January 1, 2016 (currently $9.15 per hour)</li> </ul> <p>In Vermont, a full-time worker making the minimum wage would make $19,032 in 2015 and $19,968 in 2016, assuming no overtime and excluding other income, such as tips. That has the strong potential of improving the living conditions of workers who depend on the minimum wage to make a living.</p> <h2>5. U.S. Interest Rates Will (Finally!) Go Up</h2> <p>2015 was supposed to be the year that the Federal Reserve would raise interest rates.</p> <p>However, as Yogi Berra once said, &quot;It ain't over, 'til it's over.&quot; Consumer prices <a href="http://www.bls.gov/news.release/pdf/cpi.pdf">increased in October 2015</a> after two straight months of declines. Add the appreciation of the U.S. dollar against other currencies and a jobless rate that is consistent with full employment to a moderate inflation increase, and you get a very likely chance that the U.S. Federal Reserve could finally increase interest rates this December 16, 2015.</p> <p>In the event that Janet Yellen, chair of the U.S. Federal Reserve, decides to hold on off to an interest rate hike, there's a slim chance that she will delay liftoff beyond early 2016.</p> <p><em>Do you expect 2016 to be better for the economy &mdash; and your pocketbook?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/america-is-on-a-roll-5-economic-predictions-for-2016">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-credit-card-debt">5 Sobering Facts About Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/funding-your-401k-when-youre-in-debt">Funding your 401(k) when you&#039;re in debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year">10 Ways to Increase Your Net Worth This Year</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-mistakes-to-stop-making-by-50">5 Money Mistakes to Stop Making by 50</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt gas prices housing market interest rates minimum wage u.s. economy Tue, 15 Dec 2015 14:00:03 +0000 Damian Davila 1619181 at http://www.wisebread.com The 4 Most Overpriced U.S. Housing Markets http://www.wisebread.com/the-4-most-overpriced-us-housing-markets <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-4-most-overpriced-us-housing-markets" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000007148318_Large.jpg" alt="housing market" title="housing market" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>A great deal has changed since the housing bust of last decade. No longer are many markets in the Southwest hugely underpriced due to high foreclosure rates. Instead, most of the country has since normalized &mdash; and in some big-city markets, home prices are back at pre-recession peaks. While the average American home is still <a href="http://www.marketwatch.com/story/10-most-overvalued-and-undervalued-housing-markets-2014-10-01">undervalued by approximately 3%</a>, homes in some of the biggest metropolitan areas are actually overvalued by up to 19%. (See also: <a href="http://www.wisebread.com/you-shouldn-t-buy-a-home-if?ref=seealso">You Shouldn't Buy a Home If&hellip;</a>)</p> <p>If you're considering purchasing a home in the coming months, it behooves you to know which markets are overpriced. Here's a look at the four most overpriced U.S. housing markets.</p> <h2>Denver, Colorado</h2> <p>While Denver's home market is only overpriced by about 7%, it's <a href="http://www.denverpost.com/business/ci_26289384/price-hikes-slowing-but-denver-housings-verge-unaffordable">nearing unaffordable</a> for many of the city's residents. In May, housing in Denver cost, on average, 33.64% of income. In a balanced market, that number is closer to 30%. This means that residents are spending more money on housing, so they are spending less on other things, like food and entertainment. Denver isn't yet <em>unaffordable</em>, but you may find it hard to purchase a home there unless your income is well above average for the area.</p> <h2>Honolulu, Hawaii</h2> <p>While Honolulu no longer&nbsp;<a href="http://www.valuewalk.com/2014/02/honolulu-ties-new-york-as-most-overpriced-us-city/">ties with New York</a> as the most overpriced city in America when it comes to housing, homes there are still overvalued by about 10%. Hawaii is known for its high cost of housing, caused in part by the fact that there is a limited amount of land available for construction. In addition, nearly all building and repair materials must be imported, which makes it more expensive to build and maintain homes. If you're buying a home in Honolulu, keep in mind that you're likely to pay inflated local prices.</p> <h2>California</h2> <p>While it's an oversimplification to say that all homes in California are overvalued, most of the large metropolitan areas have significantly overpriced housing. Los Angeles and Orange County tie at the top of the list, with houses overvalued at 15%. San Francisco is next, at 12%, followed by Riverside-San Bernardino at 11%, San Jose at 10%, and Oakland at 7%. California has long been known for its high cost of living, and it doesn't look like that will change anytime soon.</p> <h2>Texas</h2> <p>Texas is a state with some significant disparity when it comes to home value. Homes in at least a couple of metropolitan areas, though, are overvalued. In fact, Austin topped Trulia's most recent list, with houses there overpriced by 19%. Houston also made the top 10, though homes there are only overvalued by 8%. These two cities are growing quickly &mdash; some may even say that they are experiencing something of a renaissance. Growth like that almost always causes home prices to go up, but when it happens this fast (especially in Austin), there may come a time when <a href="http://finance.yahoo.com/blogs/top-best-most/overpriced-housing-markets%E2%80%94headed-for-a-bubble-165358921.html">the bubble has to burst</a>.</p> <h2>Does It Matter?</h2> <p>Whether your local housing market is overvalued may matter more to certain types of buyers. If you're planning to live in a home for a long time, for example, you may be willing to pay a bit more. Or, if it's cheaper to buy a house than to rent one, then whether your housing market is overpriced will be less of a concern.</p> <p>If, on the other hand, you're getting into real estate as an investment (or you hope to resell within a few years), you'll care a lot more about what's happening in your housing market.</p> <p>In general, however, if you're ready to buy a home and can comfortably afford to do so, then go ahead &mdash; interest rates are low and it may yet be possible to score a great deal.</p> <p><em>Are you looking to buy a home in one of the overpriced markets? How do you think about your home's value as you consider the future?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/the-4-most-overpriced-us-housing-markets">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/be-a-smarter-home-buyer-by-avoiding-these-12-house-hunter-cliches">Be a Smarter Home Buyer by Avoiding These 12 House Hunter Cliches</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">6 Important Things You Need to Know About the Housing Market in 2016</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/growin-home-how-much-house-do-you-really-need">Growin&#039; Home: How Much House Do You Really Need?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-signs-the-house-you-want-to-buy-is-a-money-pit">5 Signs the House You Want to Buy Is a Money Pit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing home buying home ownership home prices housing market rental prices Tue, 13 Jan 2015 18:00:07 +0000 Sarah Winfrey 1277861 at http://www.wisebread.com The Housing Market Is Finally Rebounding http://www.wisebread.com/the-housing-market-is-finally-rebounding <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-housing-market-is-finally-rebounding" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4629169207_05751fefb6_z.jpg" alt="sale sign" title="sale sign" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>The housing market is rebounding. Really.</p> <p>After many premature predictions and optimistic announcements, the housing market has indeed turned a corner. Home prices and sales are up. Foreclosures and mortgage delinquencies are down.</p> <p>Average home prices in the top 20 metro areas were up 1.6% in July from a year ago, according to the S&amp;P/Case Shiller Home Price Indices. All 20 cities in the index reported rising home prices for the third month in a row.</p> <p>&quot;All in all, we are more optimistic about housing. Upbeat trends continue,&quot; said David M. Blitzer at S&amp;P Dow Jones Indices.</p> <p>The median existing-home price, including all housing types, was $183,900 in September, up 11.3% from a year ago, according to the National Association of Realtors. The year-over-year monthly home prices have increased for seven months in a row. The last time that happened was from November 2005 to May 2006.</p> <p>&quot;Despite occasional month-to-month setbacks, we're experiencing a genuine recovery,&quot; said Lawrence Yun, NAR chief economist. &quot;More people are attempting to buy homes than are able to qualify for mortgages, and recent price increases are not deterring buyer interest.&quot; (See also: <a href="http://www.wisebread.com/what-it-really-costs-to-own-a-home">What It Really&nbsp;Costs to&nbsp;Own a Home</a>)</p> <h2>The Buyer's Market Is Over</h2> <p>What's more, the buyer's market may be coming to an end as sentiment begins to favor sellers. A survey by RedFin, a technology-based real estate brokerage firm, showed that homebuyers believe the market may be shifting against them. Out of 982 homebuyers polled this summer, 46% said they believe that now is a good time to buy. That was down from 56% in the first quarter and 48% in the second quarter. Thirty-two percent think now is a good time to sell, up from 13% in the first quarter and 28% in the second quarter.</p> <p>Importantly, many homebuyers, 61%, believe home prices will increase, up from 32% in the first quarter. More buyers are coming across competition or even bidding wars for a limited number of homes being sold &mdash; 71% of respondents reported encountering competition on at least one offer.</p> <p>Homes are also selling faster. The median time on the market in September dropped 30.7% from 101 days in September 2011, another indication that housing has strengthened.</p> <h2>Too Many Buyers for Homes</h2> <p>The problem for home buyers is the shortage of homes being sold. In parts of the West, the shortage is especially acute, Yun said. The number of existing homes listed for sale fell 3.3% to 2.32 million at the end of September. That's down 20% from a year ago.</p> <p>Fewer homes being sold means rising prices, a trend that will accelerate unless home builders ramp up construction fast, Yun said.</p> <p>Why the shortage? Homeowners who bought their homes before the housing bubble bust are unwilling to sell now and take a loss. Homebuilders all but stopped home construction during the recession, and a wave of foreclosures hitting the market has failed to materialize.</p> <h2>Home Buying Is for the Fast and Ready</h2> <p>Real estate agents advise home buyers &mdash; don't fret about home price trends. If you love a house and are comfortable with the mortgage payments, make an offer.</p> <p>If you want to buy a home, don't keep waiting in an attempt to &quot;<a href="http://www.wisebread.com/once-again-safe-as-houses">wait for the bottom</a>.&quot; By the time you've concluded home prices have hit bottom, they'll probably already be rising. And even if prices do fall in your area, interest rates may rise. That will make mortgages more expensive, defeating the purpose of seeking affordable housing.</p> <p>Don't be too picky. You might not find your dream house, especially with fewer homes on the market than potential home buyers. Don't worry about appliances, colors of the walls, or weeds in the yard. You can always replace a refrigerator and paint walls latter.</p> <p>Be ready and fast. Obtain <a href="http://www.wisebread.com/buying-first-home/home-loans">mortgage preapproval</a>. Submit your financial documentation to a lender to get preapproval for a maximum home loan amount. Get to know the neighborhood where you're house hunting. Learn about multiple-offer situations and plan out what you'll do.&nbsp;</p> <h2>Should You Buy a House Now?</h2> <p>So should you should you rush to by a home before home prices increase even more? It depends.</p> <p>Because real estate is local, prices in your area might not follow national trends or the trend in a nearby metro area. Examine local home values when you're home shopping, not national or regional price indexes.</p> <p>Regardless of the home price outlook, before you jump into home buying, your personal and career situation should be settled enough for you to stay put for at least a few years. Buying a home is not like speculating in gold or stocks. You can sell a commodity like a stock fairly easily, but when you buy real estate, you pay an assortment of mortgage closing costs and fees. When you sell, you pay the real estate agent a commission. For that reason, you should plan to keep the property for at least several years to make the investment worthwhile.</p> <p>Your financial house, so to speak, should be in order, your credit good enough to obtain a favorable home loan rate, and a savings large enough for a down payment &mdash; ideally at least 10% but ideally 20% to avoid private mortgage insurance, which insures the lender and brings no benefit to you.</p> <p>You should be ready to pay for maintenance and repairs or to <a href="http://www.wisebread.com/5-household-fixes-you-should-stop-paying-others-for">fix things yourself</a>. Unlike a renter who calls the landlord when a faucet leaks, you'll be responsible for mowing the lawn and fixing anything that breaks.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/michael-kling">Michael Kling</a> of <a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">6 Important Things You Need to Know About the Housing Market in 2016</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-should-be-saving-big-with-bi-weekly-mortgage-payments">Why You Should Be Saving Big With Bi-Weekly Mortgage Payments</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-cost-of-a-free-ride-why-not-to-use-a-buyers-agent-submitted-by-ken-rick">The cost of a free ride - why not to use a buyer&#039;s agent</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">The Process for Purchasing a House With Cash</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Financial News Real Estate and Housing buying a house foreclosures housing market Fri, 16 Nov 2012 10:36:50 +0000 Michael Kling 955599 at http://www.wisebread.com Once Again Safe as Houses? http://www.wisebread.com/once-again-safe-as-houses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/once-again-safe-as-houses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/allerton-mansion-large.jpg" alt="Allerton Mansion across the pond" title="Allerton Mansion across the Pond" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>A good reason to buy a house: It's affordable, and you want to live in it. A bad reason to buy a house: You're worried about &quot;missing the bottom&quot; in the housing market. (See also: <a href="http://www.wisebread.com/your-equity-was-always-imaginary">Your Equity Was Always Imaginary</a>)</p> <p>As soon as housing prices made their initial leg down, I started seeing people thinking that it was time to buy. But very few of those people were saying, &quot;I just saw this perfect house!&quot; Most of them were saying, &quot;Maybe I'd better buy now, before prices go back up.&quot;</p> <p>I saw so many people talking that way, I wrote a post &mdash; <a href="http://www.wisebread.com/dont-worry-about-missing-the-bottom-in-houses">Don't Worry About Missing the Bottom in Houses</a>. My point was that &mdash; unlike the stock market, where prices turn on a dime and zoom back up so fast that it's hazardous to your wealth to try to time the market &mdash; the housing market turns very slowly. After the bottom is long past, there will still be houses whose owners didn't sell as prices were falling. Some of them will move to sell at the first sign of rising prices. And, of course, there will always be the occasional motivated seller who simply has to sell.</p> <p>You never need to rush to buy after a housing crash &mdash; house prices will stay down for years. But now, it's been years.</p> <p>One never knows the future, of course, but sometimes the trends are so strong and so obvious it seems safe to make a prediction. That's how I saw the housing market back in March of 2009, when I wrote that post.</p> <p>Having done so, I figured I was obliged to mention when it's no longer the case.</p> <p>I'm certainly not calling a bottom in the housing market. I'm not predicting that prices will go up soon.</p> <p>All I'm saying is that the abnormal situation where you really can predict a market is coming to an end. Three years ago, I was willing to bet that there was no reason to rush into the housing market. There was no danger of &quot;missing the bottom.&quot;</p> <p>Now things are returning to normal. I don't know that prices will head back up any time soon. But after years in which they really couldn't, I've begun to figure that now they could.</p> <p>I still think that the only good reason to <a href="http://www.wisebread.com/the-process-for-purchasing-a-house-with-cash">buy a house</a> is that you've found one you really want to live in, and you're able to get it at a price you can comfortably afford. And when that's the case, you don't really need to worry about whether the market is at the bottom or not.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/once-again-safe-as-houses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">6 Important Things You Need to Know About the Housing Market in 2016</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-costly-things-new-homeowners-dont-prepare-for">9 Costly Things New Homeowners Don&#039;t Prepare For</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-reduce-mortgage-closing-costs">8 Ways to Reduce Mortgage Closing Costs</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">The Housing Market Is Finally Rebounding</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing first time home buyer housing bubble housing market recession Tue, 24 Jul 2012 09:37:00 +0000 Philip Brewer 943654 at http://www.wisebread.com U.S. Banks and the Tokyo Drift http://www.wisebread.com/us-banks-and-the-tokyo-drift <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/us-banks-and-the-tokyo-drift" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3134995846_f6b734b24c.jpg" alt="yen" title="yen" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>You already know the story, but perhaps it may happen again. It's <em>that</em> familiar.</p> <p>A nation reeling from popped real estate and financial collapse mopes through a recession and struggles with a crisis of confidence, its president making pledges that everything will be okay.</p> <p>It sounds like a broken record, doesn't it?</p> <p>Well, except I'm talking about Japan and the president in question is not Barack Obama but Junichiro Koizumi, and the year in question was 2001, not 2010.</p> <p>But it <em>is</em> 2010, and parallels to <a href="http://www.aei.org/outlook/27568">Japanese banking</a> in the 1990s and our banks in the &quot;oughts&quot; now abound.</p> <p>Four words: bad loans and deflation risk.</p> <p>That's five words, but it's important to note that recently, U.S. banks such as BB&amp;T and Sun Trust both set up special panels to explore potential exposure to <a href="http://www.reuters.com/article/idUKTRE69B2AU20101012">deflation</a>.</p> <p>Deflation is the general decrease in the price level of goods and services across the board, usually due to a systemic downturn and the resulting desperate effort to cut prices to compete. Deflation also sometimes results from monetary policy that overdoes it in an effort to avoid inflation. Ironic, isn't it?</p> <p>According to <em>Reuters:</em></p> <blockquote><p>BB&amp;T ran its books through a stress test to gauge the bank's performance in a scenario in which there is deflation for the next 10 years, as part of the bank's own internal projections of various economic scenarios, Chief Financial Officer Daryl Bible said.&quot;</p> </blockquote> <h3>Why does Japan in the 1990s keeps coming up?</h3> <p>At the outset of the U.S. crisis in early 2008, the American Enterprise Institute examined Japan's lost decade, about which the think tank says that an &quot;economic cycle driven by a collapse in the market for an asset &mdash; such as land or housing &mdash; to which the banking system is heavily exposed is a dangerous beast.&quot;</p> <p>That &quot;dangerous beast&quot; was Japan 20 years ago and it ended just 10 years ago. That dangerous beast could also loom here in the U.S. today. The common denominator: bad bank loans were, by and large, the culprit.</p> <p>As the Reuters piece points out, Japanese banks discovered what is now known as the &quot;lost decade&quot;; deflation means that loan collateral values decline, exacerbating already under-performing loans.</p> <p>The article goes on to say:</p> <blockquote><p>Loans may become more likely to fail, as borrowers tire of paying high rates of interest to finance assets that are worth much less than they had been previously. A second credit crisis could emerge.&quot;</p> </blockquote> <p>If regional powerhouse U.S. banks such as Sun Trust and BB&amp;T &mdash; both of which received TARP money and both of which are present in areas hit by rising foreclosures &mdash; are either thinking about or hedging against deflation, then it's only a matter of time before cheap money and sluggish economic growth increases the possibility of making widespread deflation an actual reality.</p> <p>Indeed, the risk of continued deterioration of already bad loans continue to scare U.S. banks, which have a danger of falling further into hock on outstanding loans to say nothing of the continued &quot;<a href="http://www.npr.org/blogs/money/2010/10/07/130408926/quantitative-easing-explained">quantitative easing</a>&quot; at the U.S. Federal Reserve and currently low Treasury yield curves.</p> <p>Who better to explain what might happen than Bank of Tokyo-Mitsubishi UFJ, Japan's largest bank and &quot;lost decade&ndash;bad loan&quot; poster child?</p> <p>According to a <a href="http://www.bloomberg.com/news/2010-07-22/treasury-curve-to-flatten-on-economic-lost-decade-mitsubishi-ufj-says.html">Bloomberg</a> piece earlier this summer, the bank's proprietary trading chief <a target="_blank" title="Search News" href="http://search.bloomberg.com/search?q=Kenichi%20Imai&amp;site=wnews&amp;client=wnews&amp;proxystylesheet=wnews&amp;output=xml_no_dtd&amp;ie=UTF-8&amp;oe=UTF-8&amp;filter=p&amp;getfields=wnnis&amp;sort=date:D:S:d1&amp;partialfields=-wnnis:NOAVSYND&amp;lr=-lang_ja">Kenichi Imai</a> had this to say:</p> <blockquote><p>With the effect of government stimulus measures wearing off, the U.S. economy may face a prolonged soft patch, rather than a double bottom.&quot;</p> </blockquote> <p>Soft Patch? Opposite of a hard patch? Flaccid? Sounds maybe a little bit, I don't know...deflated, even.</p> <p>Let's hope not.</p> <p>As Bill Isaac, chairman of LECG Global Financial Services and a former FDIC chairman, points out, deflation is not good given that U.S. banks are still assessing non-performing and under-performing loans and testing their balance sheets against deflationary scenarios.</p> <p>Think you've heard this already? Just wait.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jabulani-leffall">Jabulani Leffall</a> of <a href="http://www.wisebread.com/us-banks-and-the-tokyo-drift">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/bank-based-small-dollar-loans-an-alternative-to-payday-loans">Bank-Based Small-Dollar Loans: An Alternative to Payday Loans</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-countries-where-banks-pay-crazy-interest-rates">10 Countries Where Banks Pay Crazy Interest Rates</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/credit-unions-vs-banks-whats-the-difference">Credit Unions vs. Banks: What&#039;s the Difference?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/six-options-if-youre-underwater-on-your-mortgage">6 Options if You&#039;re Underwater on Your Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/citimortage-told-me-to-default-on-my-loan-if-i-want-their-help">CitiMortgage Told Me to Default on My Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Financial News bank loans banking strategies currency rates deflation dollar value housing market international japan yen Thu, 21 Oct 2010 12:00:10 +0000 Jabulani Leffall 266327 at http://www.wisebread.com What's in Store for the Economy? http://www.wisebread.com/whats-in-store-for-the-economy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/whats-in-store-for-the-economy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000005556364XSmall.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="269" /></a> </div> </div> </div> <p>So does anybody really know where the economy is headed? For a little while there, things seemed to be looking up, thanks to improved stock prices. But with the market having slipped again and unemployment continuing to brew, it's hard to feel confident about the economy these days. Not to mention that we seem to be heading into round two of a stubborn recession, due to uncertain financial conditions in Europe.</p> <p>How we perceive this economy is completely dependent on the needs of the politician that&rsquo;s reporting it. What few people realize is that the Federal Reserve, the Secretary of the Treasury, and all those other economists and talking heads all have an agenda, whether it&rsquo;s to bolster the confidence of the American people in the current Administration or to shake that confidence down to the core.</p> <p>The truth is that the economy, just like a most other things in life, simply can&rsquo;t be measured in straight line gains and losses. The economy is so much more than a line graph on a chart. It&rsquo;s beyond stock and options trading and big corporations. It&rsquo;s more than just mom and pop stores and consumers. It&rsquo;s almost a living, breathing organism. The housing market, the stock market, the banks, the consumers, and the government all have a small but significant role to play in the equation and the contributions of each simply can&rsquo;t be measured in finite terms.</p> <p><strong>For instance, let&rsquo;s look at the housing market.</strong> Even though there seems to be more activity in the housing market when it comes to house sales, there is still an overwhelming number of houses falling into foreclosure. Does this mean that the housing market is recovering or that it&rsquo;s still in dire straits? Big banks are finally showing signs of stability and their recovering stock prices prove it. But maybe it's because of the huge subsidies they've received. And is our economy really on the mend when small bank after small bank (somewhere in the neighborhood of 20-50 or more a month) continues to shut its doors?</p> <p><strong>And what about the stock market?</strong> Are we as consumers supposed to be comforted by the fact that the stock market has recovered nicely from its lows? If you notice the market's behavior, there have been equally as many &quot;up&quot; days as there are &quot;down&quot; days, and this is the normal ebb and flow of the <a href="http://www.wisebread.com/who-cares-about-where-the-stock-market-is-headed">ever-volatile stock market</a>. We haven't really made as much progress as it seems.</p> <p>And while the credit card industry looks to be recovering after a tough period of tight credit, issuers are still keeping an eye on the kind of customers they extend credit to. Getting approved for a prime credit card may be just a tad bit easier than it was a couple of years ago, but things certainly haven&rsquo;t returned to those days of yore when subprime loans, easy credit and quick cash ruled the day. Those days won&rsquo;t be back anytime soon, if at all.</p> <p>So as far as the economic recovery is concerned, the truth is that we don&rsquo;t know what&rsquo;s going on and where this economy will be in the near term. I believe that the so-called financial &ldquo;experts&rdquo; are just as in the dark as we are. Sure they can look at their statistical data and make some educated guesses, but in the end, it&rsquo;s really no more accurate or scientific than predicting tomorrow&rsquo;s weather. Sometimes they get lucky and get some things right, but, more often than not, they&rsquo;re nowhere even close.</p> <p>So, I&rsquo;ve vowed to take a step back from the overwhelming wave of &ldquo;knowledge&rdquo; and information being floated around out there about the state of our economy, and I've decided to make sound financial decisions based on what works for me. I&rsquo;m no longer listening to the people who once told me that debt and leverage were the ways to get what I wanted out of life five years ago, but who are now telling me (in an about face) that no debt is good debt.</p> <p>It would be nice to have that peace of mind of knowing that you can pay your mortgage with only one income if you have to. And wouldn't it be great if you didn't have to worry about losing your car because you hold the title to it? But here's the irony &mdash; if we work to minimize our credit card debt, cut down on spending, and make a commitment to live within our means, would we be influencing the course of our economy for the better? While becoming more financially responsible and putting a lid on spending may be what's good for our family budget, who knows what kind of collective impact such changes would have on our economy. After all, doesn't the economy rely on a spending, consumerist base? If we become a nation of hard-core savers, where does this leave the economy?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/silicon-valley-blogger">Silicon Valley Blogger</a> of <a href="http://www.wisebread.com/whats-in-store-for-the-economy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-these-8-things-to-profit-from-the-improving-economy">Do These 8 Things to Profit From the Improving Economy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-housing-market-is-finally-rebounding">The Housing Market Is Finally Rebounding</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-i-miss-about-the-recession">What I Miss About the Recession</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/etfs-offer-incredible-benefitswith-a-dark-side">ETFs Offer Incredible Benefits...with a Dark Side</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-reasons-why-the-us-economy-is-kicking-the-worlds-butt">9 Reasons Why the U.S. Economy Is Kicking the World&#039;s Butt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Financial News Economy finance housing market stock market Thu, 22 Jul 2010 12:00:09 +0000 Silicon Valley Blogger 181548 at http://www.wisebread.com Don't worry about missing the bottom in houses http://www.wisebread.com/dont-worry-about-missing-the-bottom-in-houses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-worry-about-missing-the-bottom-in-houses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/gutted-house.jpg" alt="Gutted house" title="Gutted House" class="imagecache imagecache-250w" width="250" height="164" /></a> </div> </div> </div> <p>I've recently heard from several people who want to buy a house and are thinking that now may be the time.&nbsp; In particular, they're worried that waiting might cause them to &quot;miss the bottom&quot; and lose the chance to get a great house cheap.&nbsp; In housing (unlike, for example, the stock market) you don't need to worry about that.</p> <p>It's a real issue in the stock market.&nbsp; One reason that people recommend keeping your money in the market through downturns is that, when the market does turn up, it tends to turn up sharply.&nbsp; More than one study has shown that having your money out of the market for just a few days a year--if they're the few days with the biggest gains--can cut your total return by half or more.</p> <p>This is not, however, true for houses.&nbsp; There is absolutely no need to try to catch the bottom in the market for houses, because of all those individual sellers out there.</p> <p>Take a house that has been sitting on the market for years, with the owners cutting their asking price repeatedly--from what they <strong>hoped</strong> to make to what their <strong>realtor said</strong> they could make to just enough to <strong>break even</strong> to just enough to <strong>cover the mortgage</strong> to just enough that the sales price plus <strong>all their savings</strong> could cover the mortgage--but the house still hasn't sold.&nbsp; When you make an offer on this house, the owner is going to take it unless the bank won't let him.&nbsp; He's going to take it even if the market has &quot;hit bottom;&quot; even if his neighbors' houses have started selling; even if there are rumors that some buyers aren't low-balling every offer.&nbsp; He's been waiting too long to risk letting a firm offer slip through his fingers.</p> <p>Of course, for any particular house you can miss your chance to buy.&nbsp; Once someone else makes an offer for that house you won't be able to get it with a low-ball offer.&nbsp; But there will still be all those other houses out there that the owners have been trying to sell for years.</p> <p>Don't worry about catching the bottom.&nbsp; Even a year or two after the bottom there will still be houses that haven't sold, and they'll still be available for rock-bottom prices.&nbsp; It's completely different from the stock market.<br /> &nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/dont-worry-about-missing-the-bottom-in-houses">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-does-the-fannie-mae-and-freddie-mac-bailout-affect-you">How does the Fannie Mae and Freddie Mac bailout affect you?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-create-a-speculative-bubble-and-profit">How to create a speculative bubble and profit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-important-things-you-need-to-know-about-the-housing-market-in-2016">6 Important Things You Need to Know About the Housing Market in 2016</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ask-yourself-these-5-questions-before-buying-a-home">Ask Yourself These 5 Questions Before Buying a Home</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/real-estate-appraisals-ten-things-most-people-just-dont-understand-about-them">Real Estate Appraisals - Ten things most people just don&#039;t understand about them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Real Estate and Housing bottom housing housing market low-ball market market bottom Thu, 26 Mar 2009 15:39:19 +0000 Philip Brewer 2978 at http://www.wisebread.com