NEW YORK (CNNMoney) -- With job openings scarce, getting adult children to leave the nest is becoming a lot more difficult.
The number of adult children who live with their parents, especially young males, has soared since the economy started heading south. Among males age 25 to 34, 19% live with their parents today, a 5 percentage point increase from 2005, according to Census data released Thursday. Meanwhile, 10% of women in that age group live at home, up from 8% six years ago.
Among the college-aged set, the 18- to 24-year-olds, 59% of males and 50% of females lived with their parents, up from 53% and 46%, respectively.
The fact that so many young people are unable or unwilling to flee the nest "cuts into the formation of new households quite a lot," said Mark Zandi, chief economist for Moody's Analytics.
Zandi calculated that there are about 150,000 fewer households being formed per year than the 1.2 million that would be in a normal, well-functioning economy.
A decline in household formation means depressed demand for homes and as a result, lower home prices, explained Lawrence Yun, chief economist for the National Association of Realtors.
But even if all of those young adults rented it still would have an impact on home sales.
Friday, February 17, 2012
Monday, February 13, 2012
2012 Investment Picks
I've been asked "what are you investing in 2012"?
I don't have alot of money in the stock market, but what I do have are in two stocks: TGC and SIRI. TGC is a Gas Company and all indications are that Oil Prices may rise again in mid to late 2012. I have a target price of $1.30 to sell, but currently the price is below $.90.
SIRI stock is XM Radio. I'm expecting a big year but may sell towards the end of summer. Why? The 2012 Election is going to make XM Radio hot as folks from both sides are going to want to know what Talk Shows are saying. However, most will have XM Radio by the end of summer and I expect the economy to SLOW between the summer and November as folks step off the field and stand on the sidelines waiting to see who wins, as that will spell what kind of economic 2013 and beyond will look like. My target price is just above the 52 week high, then I'm dumping it. I'm into it cheap - time to make some money and sit on the sidelines myself.
Now, if I sell and market crashes in October, I'll probably buy BOTH back at a huge discount - that's how much I believe in their stock. If Obama WINS, I may buy back BOTH because I expect that OIL will soar and folks will flock to talk shows in hope to find guidance. If Republicans wins, SIRI stock is done as there will be nothing to talk about.
I'm also investing everything I can into Real Estate as I believe Hyper-Inflation is coming to a town near you. Real Estate is the best thing to combat inflation, as long as you have a fixed mortgage. I'm expecting Renting to reach historical heights.
So, there is my guesses - what's yours?
TB
I don't have alot of money in the stock market, but what I do have are in two stocks: TGC and SIRI. TGC is a Gas Company and all indications are that Oil Prices may rise again in mid to late 2012. I have a target price of $1.30 to sell, but currently the price is below $.90.
SIRI stock is XM Radio. I'm expecting a big year but may sell towards the end of summer. Why? The 2012 Election is going to make XM Radio hot as folks from both sides are going to want to know what Talk Shows are saying. However, most will have XM Radio by the end of summer and I expect the economy to SLOW between the summer and November as folks step off the field and stand on the sidelines waiting to see who wins, as that will spell what kind of economic 2013 and beyond will look like. My target price is just above the 52 week high, then I'm dumping it. I'm into it cheap - time to make some money and sit on the sidelines myself.
Now, if I sell and market crashes in October, I'll probably buy BOTH back at a huge discount - that's how much I believe in their stock. If Obama WINS, I may buy back BOTH because I expect that OIL will soar and folks will flock to talk shows in hope to find guidance. If Republicans wins, SIRI stock is done as there will be nothing to talk about.
I'm also investing everything I can into Real Estate as I believe Hyper-Inflation is coming to a town near you. Real Estate is the best thing to combat inflation, as long as you have a fixed mortgage. I'm expecting Renting to reach historical heights.
So, there is my guesses - what's yours?
TB
Sunday, February 12, 2012
Don't Pay Another Cent in Rent To Your Landlord
by Raul Pineyro
Don't Pay Another Cent in Rent To Your Landlord
"If you're like most renters, you feel trapped within the walls of a house or apartment
that doesn't feel like yours."
It's a dream we all have - to own our own home and stop paying rent. But if you're like most renters, you feel trapped within the walls of a house or apartment that doesn't feel like yours. How could it when you're not even permitted to bang in a nail or two without a hassle. You feel like you're stuck in the renter's rut with no way of rising up out of it and owning your own home.
Don't Feel Trapped Anymore
It doesn't matter how long you've been renting, or how insurmountable your financial situation may seem. The truth is, there are some little known facts that can help you get over the hump, and transfer your status from renter to homeowner. With this information, you will begin to see how you really can:
- save for a down payment
- stop lining your landlord's pockets, and
- stop wasting thousands of dollars on rent.
6 Little Known Facts That Can Help You Buy Your First Home
The problem that most renters face isn't your ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down payment on something more permanent.
But saving for this lump sum doesn't have to be as difficult as you might think. Consider the following 6 important points:
1. You can buy a home with much less down than you think
There are some local or federal government programs (such as 1st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. Ensure your real estate agent is informed and knowledgeable in this important area and can offer programs to help you with your options.
2. You may be able to get your lender to help you with your down payment and closing costs
Even if you do not have enough cash for a downpayment, if you are debt-free, and own an asset free and clear (such as a car for example), your lending institution may be able to lend you the downpayment for your home by securing it against this asset.
3. You may be able to find a seller to help you buy and finance your home
Some sellers may be willing to hold a second mortgage for you as a 'seller take-back'. In this case, the seller becomes your lending institution. Instead of paying this seller a lump-sum full amount for his or her home, you would pay monthly mortgage installments.
4. You may be able to create a cash down payment without actually going into debt
By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a downpayment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.
5. You can buy a home even if you have problems with your credit rating
If you can come up with more than the minimum down-payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation.
6. You can, and should, get pre-approved for a home loan before you go looking for a home
Pre-approval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written pre-approval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you're looking for. Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter's rut forever. Typically there is no cost or obligation to inquire.
There are many important issues you should be aware of that affect you as a renter.
Why on earth would you continue to lose thousands by throwing it away on rent when with your agent you could take a few minutes to discuss your specific needs so that you can stop renting and start owning.
This conversation costs you nothing. And, of course, you shouldn't have to feel obligated to buy a home at the time you review this. But by taking the time to explore your options, and learn about the ways you can afford to buy a home, think how prepared and relaxed you'll be when you are ready to make this important step.
Tuesday, February 7, 2012
FHFA Solicits Investors for REO-to-Rental Sales
By: Carrie Bay
The Federal Housing Finance Agency (FHFA) on Wednesday issued a notice to investors interested in buying government-owned REOs in bulk for use as rental properties, encouraging them to register with Fannie Mae in order to pre-qualify as an eligible bidder.
FHFA says the first pilot transaction will be announced in the “near-term.” During the pilot phase, Fannie Mae will sell off pools of various types of assets, including rental properties, vacant properties, and nonperforming loans, with a focus on the hardest-hit areas.
These pilot sales represent the initial stage of the government’s Real-Estate Owned (REO) Initiative announced in August 2011, when FHFA issued a Request for Information (RFI) seeking input on options for selling single-family REO properties held by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA). The agency received more than 4,000 responses from industry stakeholders.
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties from government housing agencies with the requirement that the properties be rented out for a specified number of years.
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said Edward DeMarco, acting director of FHFA. “I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”
FHFA says the first pilot transaction will be announced in the “near-term.” During the pilot phase, Fannie Mae will sell off pools of various types of assets, including rental properties, vacant properties, and nonperforming loans, with a focus on the hardest-hit areas.
These pilot sales represent the initial stage of the government’s Real-Estate Owned (REO) Initiative announced in August 2011, when FHFA issued a Request for Information (RFI) seeking input on options for selling single-family REO properties held by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA). The agency received more than 4,000 responses from industry stakeholders.
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties from government housing agencies with the requirement that the properties be rented out for a specified number of years.
“This is an important step toward increasing private investment in foreclosed properties to maximize value and stabilize communities,” said Edward DeMarco, acting director of FHFA. “I am grateful for the collaborative effort by the many stakeholders including investors, nonprofit organizations, and state and local government officials, who have worked together on this Initiative.”
FHFA says pre-qualification of participating investors ensures they have the financial capacity and operational expertise to manage properties so that their efforts support the stabilization of communities that have been hit hard by the housing downturn.
The pre-qualification process requires those interested in receiving information regarding specific pilot transactions to meet certain minimum criteria. Beyond providing proof that they have the financial means to acquire the assets and the experience and knowledge to assume the risks associated with such an investment, FHFA says prospective investors must agree to keep certain information about the REO and related matters confidential.
The purpose of the REO Initiative pilot is to examine investor interest in various types of assets, including the location, size, and composition of pools of assets, as well as the ways in which investors maximize the participation of experienced local firms and organizations to provide the services and support needed to ensure community stabilization. The agency is also looking at which types of transactional structures and financing improve both sellers’ returns and home values in the impacted markets.
Interested investors can register to pre-qualify at FHFA’s REO Initiative page on the agency’s website.
FHFA says it is also looking at ways to improve REO sales to homeowners and small investors by enhancing the GSEs’ existing retail sales strategies. Both Fannie Mae and Freddie Mac sell the majority of their REO properties to owner-occupants at close to market value.
As of the end of the third quarter of 2011, Fannie Mae had 122,616 single-family REO properties on its books and Freddie Mac held 59,596.
Sunday, February 5, 2012
Housing Crisis to End in 2012 as Banks Loosen Credit Standards
By: Krista Franks
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
Friday, February 3, 2012
Mortgage rates tumble to record low
Average on the 30-year home loan slides to 3.87 percent from 3.98 percent
The average rate on the 30-year fixed mortgage dropped to the lowest since records have been kept, creating a tempting target for people to refinance their homes.
The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage
Mortgage rates tend to track the yield on the 10-year Treasury
Mortgage rates have hovered near 4 percent for the past three months, and have perhaps contributed to a slight improvement in the housing market. But many homeowners remain underwater and the pipeline of foreclosures continues to be huge, putting heavy pressure on housing prices.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don't want to sink money into a home that they fear could lose value over the next few years.
Sales of previously occupied homes were dismal last year. New-home sales in 2011 were the worst on records going back half a century.
Builders are hopeful that the low rates could boost sales next year. But so far, they have had a minimal impact.
Mortgage applications have risen slightly over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.
To calculate the average rates, Freddie
The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.85 percent. The average on the one-year adjustable loan rose to 2.76 percent from 2.74 percent.
The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable.
The Associated Press contributed to this report.
Kitchen Sells a House
by Carla Hill
It's a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.
A kitchen is the heart of a home. This is true all across the globe. The old saying that the "stomach is the way to the heart" carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It's the room where we nourish our bodies and our spirits.
Kitchens are integral to entertaining and in today's age of open floor plans, they're a focal piece of many family rooms. It's because of this that kitchens play such an important role in the buying and selling process.
This one room is the showpiece of the house. You'll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.
Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It's not just a new layer of paint.
Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren't willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.
What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.
The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won't find a buyer.
Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions' kitchens look like.
Do area homes have new solid wood cabinets and granite counters in today's designer colors? You'll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?
Are you in a higher-end neighborhood? It's time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don't want to put in the time yourself to make upgrades then you'll have to make concessions in the price.
Don't become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.
The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.
It's a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.
A kitchen is the heart of a home. This is true all across the globe. The old saying that the "stomach is the way to the heart" carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It's the room where we nourish our bodies and our spirits.
Kitchens are integral to entertaining and in today's age of open floor plans, they're a focal piece of many family rooms. It's because of this that kitchens play such an important role in the buying and selling process.
This one room is the showpiece of the house. You'll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.
Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It's not just a new layer of paint.
Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren't willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.
What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.
The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won't find a buyer.
Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions' kitchens look like.
Do area homes have new solid wood cabinets and granite counters in today's designer colors? You'll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?
Are you in a higher-end neighborhood? It's time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don't want to put in the time yourself to make upgrades then you'll have to make concessions in the price.
Don't become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.
The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.
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