Rents on the rise as house prices start to increase


While reports on home prices have been mostly uninspiring, rent prices continue to make significant strides, with rent increasing more than 10 percent compared to a year ago in certain markets, according to findings from Trulia.

Rent prices rose 5.6 percent in April compared to a year ago during the same month, Trulia reported. Rent prices showed even greater increases in places experiencing rapid employment such as suburban Detroit (Warren-Troy-Farmington Hills, MI) and Silicon Valley (San Jose, CA).

“Rents have steadily increased as people who lost their homes in the crash became renters. At the same time, high unemployment and tight credit sidelined would-be homeowners,” said Jed Kolko, Trulia’s chief economist. “But relief for strapped renters may be in sight. Construction of multi-family buildings revved up last year. These new rental units will come to market later this year, giving renters more choices and less fierce competition.”

Good news was also in store for asking prices, which compared to the previous month of March, increased 0.5 percent in April on a seasonally adjusted basis, according to Trulia, which also noted that asking prices lead sales prices by approximately two or more months.

On a quarter-over-quarter basis, prices in April rose 1.9 percent. When not adjusted for seasons, prices saw an even greater increase at 4.8 percent since prices typically jump in the springtime.

Year-over-year, asking prices rose 0.2 percent.

“Prices have joined the recovery, alongside sales and construction. But foreclosures threaten prices, especially in judicial-foreclosure states like Florida, New Jersey, Illinois and New York, where many more distressed sales are still to come,” said said Jed Kolko, Trulia’s Chief Economist.

Rates on home loans reach all time low.

The demand for refinance has rose significantly as hundreds of thousands of home owners take advantage of new government programs designed to help qualify even those who are underwater on their homes.

There’s never been a better time to buy and housing experts are predicting this year could be the last chance to grab a bargain due to the weak housing market. It’s predicted that house prices will flatten out by the third quarter and start climbing by next year. The combined effect of a decline in foreclosures and continued job growth all help to bolster the housing market. In addition, homebuyers will have better access to home loans as they get their finances in order and improve their credit scores.
Some economists expect home prices to pick up even more quickly. Data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011. One major factor that will drive the trend is the cooling of the foreclosure crisis. The percentage of residential loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.” That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.
However, buyers should brace themselves for a temporary spike in the number of foreclosures as banks start expediting the processing of hundreds of thousands foreclosures that were stuck in the system following the robo-signing scandal. That backlog should move more quickly now that new guidelines for processing foreclosures have been outlined in the $26 billion foreclosure settlement. Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties.
Bargain home prices have jump-started sales on second homes, but more purchasers are opting to buy properties much closer to their primary residence. In the past, second-home buyers tended to buy properties out-of-state or were lured to vacation homes near far-flung resorts and tourist destinations. People prefer their second home to be within driving distance to have a better control and a network of people locally to maintain the property
Over the past year, consumer knowledge about credit scores improved significantly, including awareness of who collects information on which most scores are based, the importance of checking this information, what good scores are, how to raise them, and what service providers use these scores. But most consumers still do not know how costly low scores can be, when multiple inquiries hurt their scores, and the risks of purchasing credit repair services.
In a sample of over 1000 adult Americans by phone in late April 2012 by ORC International only 29 percent are aware that, on a $20,000, 60-month auto loan, a borrower with a low credit score is likely to pay at least $5000 more than a borrower with a high credit score.


Further to a meeting of ‘The Federal Reserve Board’ the Board have announced a more upbeat assessment of the economy.

With the Dow hitting its highest level since 2007 last month as well as car and real estate sales rising it can only be good news. The rise in Oil prices and interest rates are all a sign the economy is getting stronger, but how fast will these continue to rise ? The good news is The Fed Board have stated that they are committed to keeping short-term rates low until 2014. Long term rates will be dependent on the speed of economic recovery and there are still plenty of headwinds against a strong recovery. There are still millions of homes which are scheduled to go to foreclosure, that the real estate market need to absorb. Plus the world economy is still slowing and struggling in some areas such as Europe.
With all this considered a moderate but steady recovery is probably the best we can hope for and this would support low rates for the rest of 2012. But if we consider that rates have been the lowest of our generation, then even a small rise should still make the purchase of Investment Property an attractive proposition. So whilst there is a balance between rates and the economic recovery, it remains a good time to take advantage of it and make investments

The Effect of The Presidential Campaign on the Economy .

Although it is difficult to predict the future of the economy, it is important to look at all factors that could influence it in the future. One of these factors could be the up and coming Presidential Campaign.

Once the candidates and then the nominations are decided every word the Executive Branch and Congress say will be over-scrutinized and media attention will be high. The Federal Reserve Board usually ‘shut down’ for a few months prior to an election to avoid the slightest indication of bias towards any party, although they would never openly admit to this. However, if they acted now there is still time for the FED to undertake stimulus activity to aid the debt crisis. This could be beneficial in light of the recent elections in Europe that have highlighted the fact that the debt crisis there still has the attention of the world.
There could be 2 benefits to the pause , lower interest rates and lower oil prices. In the wake of the tepid jobs report, the reaction was as expected. Rates eased down a bit in the wake of the news. And oil prices corrected significantly. Why did oil prices move more quickly than rates? Because oil prices had run up significantly this year while rates had risen more moderately. Oil prices were being affected by potential supply disruptions as well as the economy. If you look at both sectors, prices are now back to where they were a few months ago. A word of warning. While lower rates and lower gas prices are both welcome news, a reversal in these trends could be at any time in the near future. If the pause continues we should enjoy these lower levels for a longer period of time, but there is no real way of knowing if the pause will be with us for long. However, rates are again at record lows and it’s hard to predict when the will change.

Welcome to the state of the wealthy homeless

In North Dakota, job seekers can make $100,000 a year with overtime and bonuses.

People are swarming to this oil boom state looking for work, and nearly everyone is finding it.

Williston, North Dakota is one of these cities situated on the Bakken formation, a deposit that is estimated to hold between 4 billion and 24 billion barrels of oil, reports the International Business Times.

Over 6,000 people have flocked to the state in search of jobs recently, the article reports, yet many of them cannot find homes.

The 2010 census reported that the population of the city is 14,716, says the Times, and with this new influx of workers there is little room for them to stay.

CNN tells several stories of these workers – people who have doubled or tripled their salaries yet are either homeless or living in poor conditions.

A man the article calls Matt told CNN that he has been living in his RV in a Walmart parking lot. He was transferred from Walmart in Minnesota over the summer, where his salary spiked.

Another family is living in a campground, having moved from a home with a yard to their yard-less RV, they told CNN.

The oil companies have been trying to help out the workers – without this manpower, the oil extraction would be much less efficient.

Some of the companies, the article reports, have rented out sections of hotels or apartment complexes, and many are also building low-budget housing around the areas for their workers.

This type of housing has been dubbed “man camps,” and though it’s cheap it is far from ideal.

Benjamin Lukes told CNN of his experience in these “man camps,” where he pays $400 a month for the space plus housekeeping and three meals a day.

And yet he equates the space to a “prison cell” and he hasn’t been able to bring his family to Williston with him, having no place for them to stay.

Unemployment in the state is 3.5%, one of the lowest in the country. And yet even the wealthy workers are homeless.