Aug 15, 2011 | Personal Finance
The ranks of the landlords are growing. Along with an increasing number of “accidental landlords”, real estate investors now account for close to 20 percent of all home resales, according to the National Association of REALTORS®.
If you plan to buy a rental property in Worcester , or to convert your current residence for long-term rental, make sure your home is properly insured.
A traditional homeowners insurance policy may be unsuitable for landlords.
A landlord insurance policy typically covers the home itself; the owner’s possessions in the home; structures on the land including garages and sheds; and, minimal liability coverage in the event of injury or lawsuit.
It’s common for landlords to increase that minimal liability coverage, adding an umbrella policy for $1,000,000 or more. Umbrella policies protect your home from an unfavorable lawsuit related to just about anything — housing-related or not.
Optionally, a policy may includes provisions for “lost rental income”.
Annual premiums for a landlord insurance policy are often 20% more costly than for a standard homeowners policy. This puts the average landlord insurance premium near $950 per year. (more…)
Aug 12, 2011 | Housing Analysis
Foreclosure activity continues to slow.
According to RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings nationwide fell 35 percent as compared to July 2010, a statistic suggesting that the housing market continues to improve.
“Foreclosure filing” is a catch-all term encompassing default notices, scheduled auctions, and bank repossessions.
Filings fell to a 44-month low in July 2011.
For all the improvement, though, activity remains concentrated in just a few states. More than half of all bank repossessions last month occurred in just a handful of states.
In July, 6 states accounted for 52% of activity. (more…)
Aug 11, 2011 | The Economy
More Americans are getting back to work.
The latest Non-Farm Payrolls survey from the Bureau of Labor Statistics shows that 117,000 net new jobs were created in July, thumping analyst estimates and surprising Wall Street investors.
In addition, May and June’s originally-reported figures were both revised higher:
- May 2011 was revised higher by 28,000 jobs
- June 2011 was revised higher by 28,000 jobs
The national Unemployment Rate slipped to 9.1 percent.
The jobs report’s strong readings would typically be a boon to stock market and a threat to mortgage rates. This is because more employed Americans means more disposable income spent on products and services; and more taxes paid to governments at the federal, state and local level.
This combination fuels consumer spending and supports new job growth, a self-reinforcing cycle that spurs economic growth and often to draw investors into equities.
This month, however, the market reaction has been decidedly different. (more…)
Aug 9, 2011 | Federal Reserve
Tuesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The vote was 7-3 — the first time in 5 meetings that the nation’s Central Bank was non-unanimous and the first time since 1992 that the FOMC adjourned with as many as three dissenters.
In its press release, the FOMC had little good to say about the U.S. economy, noting that since its last meeting in June:
- Growth has been “considerably slower” than expected
- Labor market conditions have deteriorated
- Household spendng has “flattened”
The Fed also noted that the housing sector remains depressed. (more…)
Aug 9, 2011 | Mortgage Rates, News, The Economy
Mortgage rates continue drifting downward, despite — or because of — a ratings downgrade on long-term U.S. government debt. Standard & Poors issued a single-notch downgrade after Friday’s market close, from AAA to AA+.
Of the roughly $9.4 billion in publicly-held U.S. debt, 72 percent is long-term (i.e. with duration of 2 years or longer).
U.S. short-term debt was not downgraded.
When an entity — government, business, or other — is cited for a credit downgrade, it means that the risk of lending money to that entity has increased. In theory, higher risk should lead to higher borrowing costs and higher consumer rates.
Except in today’s U.S. Treasury and mortgage bond markets, the opposite is occurring. U.S.-backed bonds are in demand, leading rates lower. It’s an unexpected response to the S&P downgrade. (more…)
