May 18, 2012 | Federal Reserve
The Federal Open Market Committee released its April 2012 meeting minutes this week, revealing a Federal Reserve in the ready in the event additional monetary stimulus is needed.
The Fed Minutes function much like the minutes from a business meeting; or, condominium association meeting, for example. It’s a detailed review of the conversations and debates between FOMC members, and is typically published 3 weeks after a Federal Reserve meeting.
The Fed Minutes is a follow-up statement on the FOMC’s more well-known, post-meeting press release. It’s also much more lengthy.
Whereas the April 25, 2012 press release totaled 444 words, the Fed Minutes spanned 6,618.
Those extra words are important, too, because the detail offered within the Fed Minutes lends insight into how our nation’s central bank views the U.S. economy, its strengths and weaknesses, and its threats.
From the Fed Minutes, some of the Fed’s comments includes :
- On employment : Unemployment may remain elevated through 2014
- On housing : Tight underwriting is “holding down” the housing market
- On rates : The Fed Funds Rate should remain low until late-2014
There was also substantial talk about Europe and its role in the U.S. economy. Notably, U.S. financial institutions have been actively reducing their European exposure to contain damage in the event of a full-blown economic crisis abroad.
This has had the net effect of lowering mortgage rates in Worcester County area. Mortgage bonds often benefit from economic uncertainty.
In addition, because several Fed members acknowledged a willingness to add new stimulus to the U.S. economy, mortgage markets are accounting for the possibility it could happen. It’s unclear whether stimulus would be added after the Fed’s next meeting, or at some point later in the year, or at all.
The FOMC has its next scheduled meeting June 19-20, 2012.
May 17, 2012 | Housing Analysis
The new construction housing market continues to improve.
One day after the National Association of Homebuilders reported a 5-year high in homebuilder confidence, the U.S. Census Bureau reports that single-family housing starts rose 2 percent for the second straight month last month.
In April, on a seasonally-adjusted, annualized basis, the government reports 492,000 single-family housing starts. A “housing start” is a home on which ground has broken.
In addition, March’s single-family housing starts were revised higher. What was previously reported as a three percent loss was re-measured and changed to a 0.2% gain.
The April tally marks a six percent increase over the one-year moving average and, along with the March revision, suggests that the springtime housing market may have just been seasonal.
In March, a number of reports suggested a housing retreat :
Since then, though, low mortgage rates and affordable home prices appear to have sustained the new construction market, which now appears poised for a strong 2012.
As one mark of proof, active buyers of newly-built homes in Massachusetts and nationwide are scheduling “model home” showings at the fastest pace since 2007. The burst of foot traffic high has builders upping their sales expectations for the next 6 months.
A scenario like this would normally lead new home prices higher, but the pressure for prices to rise may be offset by the amount of new home supply coming online.
In addition to a rise in Housing Starts, the Census Bureau also reports that, in April, the number of Building Permits for single-family homes rose 2 percent to move to its second-highest level since March 2010 — the month preceding the end of the 2010 federal Home buyer tax credit.
86 percent of homes break ground within one month of permit issuance.
It’s unclear whether housing is on a steady path higher, but there’s a growing body of evidence that suggests the market bottom has already passed.
May 16, 2012 | Housing Analysis
Homebuilder Confidence is on the rise once again.
After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.
The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below (more…)
May 15, 2012 | Mortgage Rates
Home affordability is receiving a boost from across the Atlantic Ocean this spring.
For the third time in as many years, a weakening Eurozone is pushing May mortgage rates to new lows throughout Worcester County area and nationwide.
The story centers in Greece and begins in 2010.
2 years ago, it was uncovered that successive Greece governments had purposefully misreported the nation-state’s economic statistics in order to meet European Union standards. The fraudulent data had permitted Greek governments to spend beyond their means while hiding deficits from EU auditors.
The realization that Greece was heavy in debt with little means to repay its creditors resulted in a massive bailout from the IMF and the rest of the Eurozone nations. The terms for Greece said that, in order to receive its €110 billion aid package, Greece would be required to enact strict spending controls.
This is known as “austerity” and the deal was met with outrage by the Greek public. There’s been general social unrest ever since and, on May 6 of this year, Greece held a special “early election” to elect all 300 members to its legislature.
No party won majority in the elections.
7 different groups garnered seats in the parliament last week with anti-austerity groups faring well. It’s spurred concern that Greece will end its bid for fiscal restraint, and that Greece may choose to leave the 17-nation Eurozone.
The uncertainty surrounding Greece is helping U.S. mortgage rates (more…)
May 14, 2012 | Around The Home
Among Worcester County area homeowners, granite countertops remain a popular kitchen and bathroom finishing choice. Granite boasts a combination of natural beauty and durability that’s unmatched among most commercial options.
But different from many other countertops choices, granite is a natural material; mined from the Earth. It is porous and highly absorbent.
To protect the granite in your home, therefore, and to ensure its quality over time, you’ll want to seal your countertops at least once annually. A proper granite sealing will prevent stains and damage that can ruin your countertops’ appearances.
Sealing your granite countertops is a simple job, but one that requires a little bit elbow grease.
First, you should make sure your granite is actually ready to be re-sealed. To do this, soak a white cotton cloth in water and leave it on the corner of your countertop for a 10 minutes. Lift the towel and check whether the area under the towel is discolored, or dark. This will indicate that your granite is absorbing liquid and needs sealing.
If the area is not disclored, your granite is already sufficiently sealed.
If your countertops do need to be sealed, here’s how to do it :
- With a spray cleaner, wipe down the entire surface and allow to dry
- Using a clean white rag, apply granite sealer to the surface uniformly
- Allow 30 minutes for the granite to absorb the sealer, or longer
- When dry, re-apply a second coat of sealer
Depending on the thickness and quality of your home’s granite, it may need to dry overnight so allow yourself the proper time to finish the job.
Once sealed, use preventative maintenance to keep your granite countertops looking great. Place coasters under beverages, hot plates under dishes and clean up spills immediately.
A well-cared for granite countertop will last for years.
