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May 22, 2012
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Economy Articles

  • Housing Cycle Reaches Low Point
    05/01/2012

    Home sales volume last year was up modestly over 2010, but there was an important shift in their composition: Investors were stepping up to buy while households dropped back. There’s a positive side to this. Our surveys show that households getting into the market are doing so for all the right reasons. They’re seeking a different home or another neighborhood. They’re not buying just so they can flip the house at the first sign of market change.

  • Government Support and the Good Boom
    03/01/2012

    A truly healthy housing market boom occurred between 1940 and 1960. Supported by Fannie Mae as a quiet, behind-the-scenes government corporation, the home ownership rate grew from 40 percent to 60 percent. The company provided liquidity for FHA mortgages and for U.S. Veterans Affairs’ zero-down payment mortgages for returning World War II soldiers, which helped fuel the growth of the American middle class.

  • Rent’s Upward Ride: Could Prices Follow?
    11/01/2011

    Housing affordability is about the best it’s ever been, but tight lending conditions have made it difficult for buyers to take advantage of the good conditions. For investors with cash, though, it’s a golden time to buy, and we’re seeing the investor community step up. Its share of home purchases reached 22 percent in August, a good part of that in all-cash transactions, because lending is especially tight for non-primary occupant homes.

  • Ready to Invest in Homes Again
    10/01/2011

    Americans socked away $250 billion in each of the 10 years prior to 2008—before the onset of the financial crisis. The savings rate was a low 2 to 3 percent of disposable income. Starting in 2008, consumers became more careful about spending and are now saving some $600 billion a year.

  • Home Prices: Critical to Small Business
    09/01/2011

    The economy is barely crawling along. A recent downward revision in the country’s gross domestic product shows that current economic activity is still below the recent past cyclical peak, achieved in late 2007, even though the country added more than 10 million people in the workforce age range.

    Without economic growth, the large budget deficit and debt problems will continue to worsen. ­After all, so much of the federal government’s revenue comes from people working and paying taxes. The current unemployment rate of 9 percent is just too high.

  • Banks Must Get Back to Business
    07/01/2011

    You already know from real-world experience that banks are not lending. But now your experience is backed by hard data from the FDIC. The agency found that in the year ending March 2011, bank deposits rose by $300 billion, assets grew by $80 billion, and profits were up by $12 billion. Yet loan volumes fell $260 billion to $7.24 trillion.

  • Banks Get More Time to Revamp Foreclosures
    06/14/2011

    The nation’s 16 largest mortgage servicers and lenders were given an extra month to provide federal regulators with a plan on how they will address problems with their foreclosure and loan modification procedures.

    In April, federal regulators gave servicers and lenders 45 days to deliver plans--which would have been on Monday--but that timeline has been extended 30 days, the Fed says.

  • Why Home Sales Will Rise This Year
    06/01/2011

    The first quarter ended with decent home sales activity, with existing homes selling at an annualized pace of 5.1 million. The remainder of the year should be better still for the following reasons:

  • Keep an Eye on Oil Prices
    04/01/2011

    The federal government is inducing them to spend, too—a new rule permits businesses to depreciate their investments right away rather than over many years.

  • Fed to Maintain Stimulus Efforts
    03/07/2011

    Experts expect the Federal Reserve to wait for more proof of a self-sustaining economic recovery before scaling back stimulus efforts.

    Fed officials, meeting March 15, likely will keep short-term interest rates near zero and allow a $600 billion Treasury bond-purchase program to run until June as planned.

    Fed Chair Ben Bernanke told lawmakers he is waiting for signs of sustainable recovery, an improved job market, and inflation closer to the central bank's 2 percent goal before tightening monetary policy.