Showing posts with label housing market. Show all posts
Showing posts with label housing market. Show all posts
28 January 2013
New Home Sales in 2011: Best since 2009
Story first appeared on USA Today
Sales of new homes cooled in December from November, but sales for all last year were the best since 2009.
The Commerce Department said Friday that new-home sales fell 7.3% last month to a seasonally adjusted annual rate of 369,000. That's down from November's 398,000 rate, which was the fastest in 2 ½ years.
For all of 2012, sales rose nearly 20% from 2011, to 367,000. That's the most since 2009 and the first annual gain since 2005, although that's coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.
The housing market began to recover last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes.
Sales of previously occupied homes rose to 4.65 million last year, the most in five years.
Home prices rose steadily, and the gains appear to be sustainable. Builders finished their best year for residential construction since 2008.
The housing market has a long way back to a full recovery. But most economists expect the recovery will strengthen in 2013.
One reason is more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
And the supply of both newly built and previously occupied homes for sale have dwindled. Fewer homes for sale have helped drive prices higher and made many markets more competitive.
Though new homes represent less than 20% of housing sales, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Homebuilders.
Gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.
Still, the number of first-time buyers remains low, which has limited sales. Many are unable to qualify for historically low mortgage rates because banks have adopted tighter credit standards and are requiring larger down payments..
21 January 2013
Home Construction Surge – Continuing Forward
Story first appeared on USA Today
Many homebuilders were forced to drastically scale back construction on new homes during the aftermath of the housing bust, to reduce the risk of being left with multiple newly build but as of yet unsold properties.
But an improving housing market has homebuilders feeling more confident about sales, and that's likely to kick the pace of new construction into a higher gear this year.
The Commerce Department said Thursday that builders broke ground on houses and apartments last month at a seasonally adjusted annual rate of 954,000. That's 12.1% higher than November's annual rate. And it is nearly double the recession low reached in April 2009.
Construction increased last month for both single-family homes and apartments. And the pace in which builders requested permits to start more homes ticked up to a 4½ year high.
For the year, builders started work on 780,000 homes. That's still roughly half of the annual number of starts consistent with healthier markets. But it is an increase of 28.1% from 2011. And it is the most since 2008 — shortly after the housing market began to collapse in late 2006 and 2007.
Steady hiring, record-low mortgage rates and a tight supply of new and previously occupied homes available for sale have helped boost sales and prices in most markets. That has persuaded builders to start more homes, which adds to economic growth and hiring.
David Williams, a homebuilding analyst with Williams Financial Group, says builders are very closely tied to what's happening in the housing market and they're going to build homes to meet demand, but not go overboard.
"I don't think, at this point, that they're going to overbuild," Williams said, noting that homebuilders are still holding back on building too many spec homes, or properties built before they're sold.
Having some spec homes can help sales, especially when a buyer isn't willing to wait several months for their home to be built. Builders tend to put up more of those homes heading into the spring home-selling season that traditionally begins next month.
Larry Webb, CEO of homebuilder The New Home Co., in Aliso Viejo, Calif., says he is building homes at a faster pace than a year ago, but he sticks to a sell-first, build-second approach.
Overall, Webb is selling and building a minimum of four homes a month, at least double the pace of sales and construction two years ago.
Webb believes the stepped-up pace of home construction will continue this year. But he's holding on to the sell-first approach.
"Based on what we've gone through in the last recession and the way we do business, we think we should primarily build after we sell homes," he said. "We only build after we sell."
The company, which builds homes in California, has 10 open communities and plans to open another 14 this year.
"Normally there's a big drop off between Thanksgiving and Christmas," Webb said. "We saw very solid traffic and we're anticipating a very good first quarter."
Thursday's positive housing report, along with a steep decline in unemployment benefit applications, contributed to a strong day on Wall Street. The Standard & Poor's 500 closed at a five-year high.
"There is no denying that the housing market recovery is solidifying, and we expect construction activity to ramp up to the 1 million annualized threshold by the end of this year," said Michael Dolega, an economist with TD Economics, in a note to clients.
Dolega said the gains in home building helped boost construction hiring in December by 30,000 jobs — the most in 15 months. He predicts the construction industry could add half a million jobs in 2013.
In December, the pace of single-family home construction, which makes up two-thirds of the market, increased 8 percent. While that's well below healthy levels, single-family housing starts are now 75 percent higher than the recession low reached in March 2009.
Apartment construction, which is more volatile, surged 23 percent last month. It is now back to pre-recession levels.
Applications for building permits, a sign of future construction, inched up to a rate of 903,000 — the highest level since July 2008.
"The strong rise in single-family starts is a clear indication of builder confidence in the sales outlook," said Pierre Ellis, an economist at Decision Economics, in a note to clients.
Confidence among homebuilders held steady in January at the highest level in nearly seven years. But builders are feeling slightly less optimistic about their prospects for sales over the next six months, according to a survey released Wednesday.
In November, sales of previously occupied homes rose to their highest level in three years, while new-home sales reached a 2 1/2-year high.
Those factors have helped make homebuilders more confident and spurred new home construction. But homebuilders' are still warily watching the current standoff in Washington between President Obama and Congress over several approaching budget deadlines, including the need to boost the nation's $16.4 trillion borrowing limit.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. For each home built, there is approximately $90,000 in tax revenue and an average creation of three jobs lasting for at least a year, data from the homebuilder’s association shows.
02 August 2012
Third California City Files for Bankruptcy
Story first reported from CNN.com
A California city filed for bankruptcy Wednesday, the third in the Golden State to do so in recent weeks, stoking experts' concerns that other cities could follow suit.
The city of San Bernardino, with more than 200,000 residents on the eastern tip of greater Los Angeles, "filed an emergency petition for Chapter 9 Bankruptcy" with a regional U.S. bankruptcy court, according to a news release from the city's interim manager.
The other two to file recently were Stockton, with around 300,000 residents, according to 2010 U.S. census data, and Mammoth Lakes, a resort town, where visitors and seasonal residents outnumber the just over 8,000 permanent inhabitants.
Many municipalities in the Golden State and around the nation are struggling to cover their costs as the economic malaise continues to hurt tax revenue streams, experts said. This will lead to more municipal bankruptcies, which have been rare until now.
"This is not the end. This is the beginning," Peter Navarro, business professor at University of California, Irvine, told CNN recently. "As cities see it can be done and is being done, it will give them the idea to do it."
Eric Hoffman, an analyst at Moody's Investor Service agreed, saying more city bankruptcies are likely in California and throughout the nation.
Cities have also struggled from budget changes made on the state level. Because of massive budget shortfalls, Gov. Jerry Brown and the state legislature made changes to vehicle tax money and redevelopment agencies that stripped locales of hundreds of millions in state funding.
San Bernardino said it will continue to provide services during the bankruptcy phase.
"There will be no immediate service reductions or changes in service to the community as a result of the filing," interim city manager Andrea Travis-Miller said Wednesday. But "reductions may occur" in the future.
In a prior statement Travis-Miller hinted the city may continue to "negotiate in good faith with its creditors."
In early July, Miller and finance director Jason Simpson issued a report stating that the city was facing insolvency and its expenditures were projected to exceed revenues by $45 million. The city's general fund reserves had been as high as $19 million in 2001 but are now depleted, the report said.
"The city has reached a breaking point," the report said.
Some $10 million to $16 million in annual revenue has evaporated in recent years as taxable sales dried up and property values plummeted in the city, the report said.
Mammoth Lakes sought protection July 2 after a property developer won a $43 million court judgment against the resort town. Experts say this filing should not be lumped in with the other two California municipal bankruptcies since it was an unusual circumstance.
Stockton, however, filed for bankruptcy in late June after three months of mediation when creditors failed to close a $26 million budget shortfall. The city had already addressed $90 million in deficits over the past three years, mainly through reducing services and employee compensation.
Both Stockton's and San Bernardino's fiscal troubles are due in large part to the massive housing downturn and recession that swept across California. Both towns were hit particularly hard by the foreclosure crisis, which left numerous abandoned homes and reduced property values in its wake. That led to lower property tax revenues, critical to supporting public services.
While some areas of the Golden State are starting to recover, the regions containing those two towns are not, said Chris McKenna, executive director of the League of California Cities.
By filing for bankruptcy, cities will be able to keep police and firefighters on the street and possibly keep some parks and libraries open while they work out their finances, he said.
A California city filed for bankruptcy Wednesday, the third in the Golden State to do so in recent weeks, stoking experts' concerns that other cities could follow suit.
The city of San Bernardino, with more than 200,000 residents on the eastern tip of greater Los Angeles, "filed an emergency petition for Chapter 9 Bankruptcy" with a regional U.S. bankruptcy court, according to a news release from the city's interim manager.
The other two to file recently were Stockton, with around 300,000 residents, according to 2010 U.S. census data, and Mammoth Lakes, a resort town, where visitors and seasonal residents outnumber the just over 8,000 permanent inhabitants.
Many municipalities in the Golden State and around the nation are struggling to cover their costs as the economic malaise continues to hurt tax revenue streams, experts said. This will lead to more municipal bankruptcies, which have been rare until now.
"This is not the end. This is the beginning," Peter Navarro, business professor at University of California, Irvine, told CNN recently. "As cities see it can be done and is being done, it will give them the idea to do it."
Eric Hoffman, an analyst at Moody's Investor Service agreed, saying more city bankruptcies are likely in California and throughout the nation.
Cities have also struggled from budget changes made on the state level. Because of massive budget shortfalls, Gov. Jerry Brown and the state legislature made changes to vehicle tax money and redevelopment agencies that stripped locales of hundreds of millions in state funding.
San Bernardino said it will continue to provide services during the bankruptcy phase.
"There will be no immediate service reductions or changes in service to the community as a result of the filing," interim city manager Andrea Travis-Miller said Wednesday. But "reductions may occur" in the future.
In a prior statement Travis-Miller hinted the city may continue to "negotiate in good faith with its creditors."
In early July, Miller and finance director Jason Simpson issued a report stating that the city was facing insolvency and its expenditures were projected to exceed revenues by $45 million. The city's general fund reserves had been as high as $19 million in 2001 but are now depleted, the report said.
"The city has reached a breaking point," the report said.
Some $10 million to $16 million in annual revenue has evaporated in recent years as taxable sales dried up and property values plummeted in the city, the report said.
Mammoth Lakes sought protection July 2 after a property developer won a $43 million court judgment against the resort town. Experts say this filing should not be lumped in with the other two California municipal bankruptcies since it was an unusual circumstance.
Stockton, however, filed for bankruptcy in late June after three months of mediation when creditors failed to close a $26 million budget shortfall. The city had already addressed $90 million in deficits over the past three years, mainly through reducing services and employee compensation.
Both Stockton's and San Bernardino's fiscal troubles are due in large part to the massive housing downturn and recession that swept across California. Both towns were hit particularly hard by the foreclosure crisis, which left numerous abandoned homes and reduced property values in its wake. That led to lower property tax revenues, critical to supporting public services.
While some areas of the Golden State are starting to recover, the regions containing those two towns are not, said Chris McKenna, executive director of the League of California Cities.
By filing for bankruptcy, cities will be able to keep police and firefighters on the street and possibly keep some parks and libraries open while they work out their finances, he said.
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22 June 2012
Sales Show Housing Market on the Mend
Story first appeared in The Wall Street Journal.
Sales of previously owned homes in May posted sharp gains compared with a year ago, but were down from April, underscoring the fragility of the housing market's recovery.
The National Association of Realtors reported Thursday that sales of existing, or previously owned, homes sold at a seasonally adjusted annual rate of 4.55 million units in May.
While that was down 1.5% from 4.62 million in April, it represented an increase of 9.6% compared with a year earlier and represented the 11th consecutive month of year-over-year increases in sales.
The data reflect completed sales transaction of single-family homes, townhouses and condominiums.
The monthly drop reflected tight inventory rather than softening demand. The normal seasonal upturn in inventory did not occur this spring, and the result is a shortage of properties for sale.
That is partly because some potential sellers are keeping their homes off the market in hopes of higher prices in the future. At the end of May, there was a 6.6-month supply of homes for sale, slightly higher than April but 20% below levels of a year ago, according to the report.
Banks have contributed to the tight inventory by limiting the number of foreclosed properties they put up for sale. Distressed properties—which includes foreclosures—accounted for a quarter of all sales in May, down from 31% in the same month a year ago.
Sellers held off selling because they thought they'd have to price their properties really low, and buyers held off because they thought the prices would keep coming down and down and down.
Meanwhile, prices are edging higher. The national median price of an existing home in May was $182,600, up 7.9% from a year ago and the third consecutive month of year-to-year price gains.
In Winnetka, Ill., a dermatologist just sold his $1.04 million home to move into a larger six-bedroom nearby. He wanted a bigger backyard and more space for his family. The house he bought for $1.87 million had been on the market for more than 400 days. Meanwhile, the old house received multiple offers and went into contract within five days.
The family was motivated to buy and sell quickly because they wanted to take advantage of low interest rates. A Freddie Mac survey this week showed 30-year fixed-rate mortgages fell to 3.66%, a record low.
Despite the recent improvements in the housing market, concern that conditions could change has made some people anxious.
Sales of previously owned homes in May posted sharp gains compared with a year ago, but were down from April, underscoring the fragility of the housing market's recovery.
The National Association of Realtors reported Thursday that sales of existing, or previously owned, homes sold at a seasonally adjusted annual rate of 4.55 million units in May.
While that was down 1.5% from 4.62 million in April, it represented an increase of 9.6% compared with a year earlier and represented the 11th consecutive month of year-over-year increases in sales.
The data reflect completed sales transaction of single-family homes, townhouses and condominiums.
The monthly drop reflected tight inventory rather than softening demand. The normal seasonal upturn in inventory did not occur this spring, and the result is a shortage of properties for sale.
That is partly because some potential sellers are keeping their homes off the market in hopes of higher prices in the future. At the end of May, there was a 6.6-month supply of homes for sale, slightly higher than April but 20% below levels of a year ago, according to the report.
Banks have contributed to the tight inventory by limiting the number of foreclosed properties they put up for sale. Distressed properties—which includes foreclosures—accounted for a quarter of all sales in May, down from 31% in the same month a year ago.
Sellers held off selling because they thought they'd have to price their properties really low, and buyers held off because they thought the prices would keep coming down and down and down.
Meanwhile, prices are edging higher. The national median price of an existing home in May was $182,600, up 7.9% from a year ago and the third consecutive month of year-to-year price gains.
In Winnetka, Ill., a dermatologist just sold his $1.04 million home to move into a larger six-bedroom nearby. He wanted a bigger backyard and more space for his family. The house he bought for $1.87 million had been on the market for more than 400 days. Meanwhile, the old house received multiple offers and went into contract within five days.
The family was motivated to buy and sell quickly because they wanted to take advantage of low interest rates. A Freddie Mac survey this week showed 30-year fixed-rate mortgages fell to 3.66%, a record low.
Despite the recent improvements in the housing market, concern that conditions could change has made some people anxious.
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29 May 2012
Housing Market Recovering
Story first appeared in The Wall Street Journal.
Sales of previously owned homes rose at a robust clip in April—and prices jumped—the latest indications that the hard-hit housing market is recovering.
Existing-home sales were up 3.4% from March to a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors trade group said Tuesday. If the pace holds, 2012 could be the strongest year for home sales since 2007, just after the housing boom. The median home price, meanwhile, increased 10.1% from a year earlier to $177,400, the strongest year-to-year gain since January 2006.
Economists said the higher median price reflects rising values and a shift toward fewer sales of foreclosed homes.
The higher sales are further confirmation that the industry is experiencing the best spring selling season since 2010, when home-buyer tax credits boosted demand. Sales improved partly thanks to strong demand from investors, who have been active buyers of distressed properties which they hope to sell at a profit. But they were also helped by traditional buyers who are feeling more confident about the economy and are ready to take advantage of low interest rates and bargain prices.
While prices are starting to rise, they remain significantly lower than a few years ago. Last week, Freddie Mac said average rates on 30-year fixed-rate mortgages dropped to 3.79% for the week ending May 16. In 2005, at the height of the housing boom, some 30-year rates topped 6%.
Tuesday's report held signs that conditions in the housing market are inching closer to normal: Foreclosures and other distressed properties, which sell at steep discounts and have dragged down prices in recent years, accounted for 28% of April's sales—down slightly from March and a steep drop from 37% a year earlier. First-time buyers, who have struggled with tightened lending standards in recent months, made up 35% of April's purchasers, up from 33% in March and down slightly from a year earlier.
Inventories remain lean, though they are expanding. The inventory of homes for sale increased 9.5% from March to 2.54 million at the end of April, indicating more sellers feel comfortable enough to list their homes. That represented a 6.6-month supply, a level considered healthy by economists.
But it appears to be getting harder to find big bargains. Sales of homes under $100,000 fell more than 25% from a year earlier in the foreclosure-heavy West. Nationwide, homes priced between $250,000 and $500,000 were up 21.2% from a year earlier.
Still, real-estate agents say the housing recovery could easily stall if inventory swells—for instance as banks seek to unload more foreclosed properties—if interest rates rise, or if the economy stumbles.
Sales of previously owned homes rose at a robust clip in April—and prices jumped—the latest indications that the hard-hit housing market is recovering.
Existing-home sales were up 3.4% from March to a seasonally adjusted annual rate of 4.62 million, the National Association of Realtors trade group said Tuesday. If the pace holds, 2012 could be the strongest year for home sales since 2007, just after the housing boom. The median home price, meanwhile, increased 10.1% from a year earlier to $177,400, the strongest year-to-year gain since January 2006.
Economists said the higher median price reflects rising values and a shift toward fewer sales of foreclosed homes.
The higher sales are further confirmation that the industry is experiencing the best spring selling season since 2010, when home-buyer tax credits boosted demand. Sales improved partly thanks to strong demand from investors, who have been active buyers of distressed properties which they hope to sell at a profit. But they were also helped by traditional buyers who are feeling more confident about the economy and are ready to take advantage of low interest rates and bargain prices.
While prices are starting to rise, they remain significantly lower than a few years ago. Last week, Freddie Mac said average rates on 30-year fixed-rate mortgages dropped to 3.79% for the week ending May 16. In 2005, at the height of the housing boom, some 30-year rates topped 6%.
Tuesday's report held signs that conditions in the housing market are inching closer to normal: Foreclosures and other distressed properties, which sell at steep discounts and have dragged down prices in recent years, accounted for 28% of April's sales—down slightly from March and a steep drop from 37% a year earlier. First-time buyers, who have struggled with tightened lending standards in recent months, made up 35% of April's purchasers, up from 33% in March and down slightly from a year earlier.
Inventories remain lean, though they are expanding. The inventory of homes for sale increased 9.5% from March to 2.54 million at the end of April, indicating more sellers feel comfortable enough to list their homes. That represented a 6.6-month supply, a level considered healthy by economists.
But it appears to be getting harder to find big bargains. Sales of homes under $100,000 fell more than 25% from a year earlier in the foreclosure-heavy West. Nationwide, homes priced between $250,000 and $500,000 were up 21.2% from a year earlier.
Still, real-estate agents say the housing recovery could easily stall if inventory swells—for instance as banks seek to unload more foreclosed properties—if interest rates rise, or if the economy stumbles.
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16 May 2012
Homebuilding Goes Up
Story first appeared in the Los Angeles Times.
U.S. builders began work on more homes last month, evidence that the battered housing market is slowly healing.
The Commerce Department said Wednesday that builders broke ground at a seasonally adjusted annual pace of 717,000 homes in April from March. That's 2.6 percent more than March's total, which was revised higher. Construction rose for both single-family homes and apartments.
Building permits, a gauge of future construction, fell last month from a 3 1 / 2 year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23 percent drop in the volatile apartment category. Permits for single-family homes rose almost 2 percent.
Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. But the increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.
Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index.
Construction Project Management teams for homebuilders have reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also rose to 34 from 31.
Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can't afford larger down payments required by banks.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what's owed on the mortgage.
Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That's nearly twice the markup typical in a healthy housing market.
Another report found that U.S. factory output increased in April, helped by a gain in auto production. Busier factories have driven stronger hiring this year and helped the economy grow.
The Federal Reserve says factory production rose 0.6 percent in April, erasing a 0.5 percent decline in March.
Half of the April increase reflected a 3.9 percent jump in the production of motor vehicles and parts. That's the fifth consecutive gain at auto plants and the biggest rise since January.
Overall industrial production increased 1.1 percent in April. In addition to the big gain at factories, output at mines and utilities both showed strong gains in April.
Factory output has risen 18.3 percent since it hit a low in June 2009, the month the recession ended.
U.S. builders began work on more homes last month, evidence that the battered housing market is slowly healing.
The Commerce Department said Wednesday that builders broke ground at a seasonally adjusted annual pace of 717,000 homes in April from March. That's 2.6 percent more than March's total, which was revised higher. Construction rose for both single-family homes and apartments.
Building permits, a gauge of future construction, fell last month from a 3 1 / 2 year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23 percent drop in the volatile apartment category. Permits for single-family homes rose almost 2 percent.
Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. But the increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.
Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index.
Construction Project Management teams for homebuilders have reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also rose to 34 from 31.
Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can't afford larger down payments required by banks.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what's owed on the mortgage.
Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That's nearly twice the markup typical in a healthy housing market.
Another report found that U.S. factory output increased in April, helped by a gain in auto production. Busier factories have driven stronger hiring this year and helped the economy grow.
The Federal Reserve says factory production rose 0.6 percent in April, erasing a 0.5 percent decline in March.
Half of the April increase reflected a 3.9 percent jump in the production of motor vehicles and parts. That's the fifth consecutive gain at auto plants and the biggest rise since January.
Overall industrial production increased 1.1 percent in April. In addition to the big gain at factories, output at mines and utilities both showed strong gains in April.
Factory output has risen 18.3 percent since it hit a low in June 2009, the month the recession ended.
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Housing Industry Does A 180
Story first appeared in USA Today.
Townhouses and single-family homes are sprouting on old industrial sites in the heart of Southern California cities. In Florida, developers are coveting foreclosed golf courses in urban centers to put up new subdivisions. Builders in Texas are going after available land even near landfills for residential and retail development.
Why are the giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs, doing an about-face? Why are they suddenly building smaller neighborhoods in and close to cities on land more likely to be near a train station than a pig farm?
A housing industry slowly shaking off the worst economic conditions in decades is rethinking what type of housing to build and where to build it. It's a response to a new wave of home buyers who have no desire to live in traditional subdivisions far from urban amenities.
The nation's development patterns may be at a historic juncture as builders begin to reverse 60-year-old trends. They're shifting from giant communities on wide-open "greenfields" to compact "infill" housing in already-developed urban settings.
The market slowdown has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.
Townhouses and single-family homes are sprouting on old industrial sites in the heart of Southern California cities. In Florida, developers are coveting foreclosed golf courses in urban centers to put up new subdivisions. Builders in Texas are going after available land even near landfills for residential and retail development.
Why are the giants of the building industry, the creators for decades of massive communities of cookie-cutter homes, cul-de-sacs and McMansions in far-flung suburbs, doing an about-face? Why are they suddenly building smaller neighborhoods in and close to cities on land more likely to be near a train station than a pig farm?
A housing industry slowly shaking off the worst economic conditions in decades is rethinking what type of housing to build and where to build it. It's a response to a new wave of home buyers who have no desire to live in traditional subdivisions far from urban amenities.
The nation's development patterns may be at a historic juncture as builders begin to reverse 60-year-old trends. They're shifting from giant communities on wide-open "greenfields" to compact "infill" housing in already-developed urban settings.
The market slowdown has given builders time to assess sweeping demographic changes that are transforming the way Americans want to live.
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State Governments Using Settlement for Other Things
Story first appeared in The New York Times.
Hundreds of millions of dollars meant to provide a little relief to the nation’s struggling homeowners is being diverted to plug state budget gaps.
In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nation’s biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and the Governor has proposed using the bulk of that sum to pay the state’s debts.
The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes.
The settlement, reached in February after a year of talks and intervention by the Obama administration, was the second-largest in history involving the states, trailing the tobacco industry settlement, and represented the first large-scale commitment by banks to provide direct aid to borrowers.
As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge. But critics complained that this was the only cash the banks were required to pay — the rest comes in the form of “credits” for reducing mortgage debt and other activities. Even that relatively small amount has proved too great a temptation for lawmakers.
Only 27 states have devoted all their funds from the banks to housing programs, according to a report by Enterprise Community Partners, a national affordable housing group. So far about 15 states have said they will use all or most of the money for other purposes.
In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments.
Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state.
The governor of Georgia has decided to use the discretionary money for economic development. He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in the state.
The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a “civil penalty” won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections.
The federal housing secretary has been privately urging state officials to spend the money as intended. Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live.
Some attorneys general have complied quietly with requests to repurpose the money, while others have protested. The Democratic attorney general of Illinois, said she would oppose any effort to divert the funds. The Republican attorney general of Arizona, said he disagreed with the state’s move to take about half its $97 million, which officials initially said was needed for prisons. But he said he would not oppose the shift because the governor and the Legislature had authority over budgetary matters. The Arizona Center for Law in the Public Interest has said it will sue to stop the transferring of the money.
In California, the Attorney General had played hardball in the settlement negotiations, holding out until the very end for a deal guaranteeing that a large share of the benefits would go to California, and then trumpeting her success in a news conference and a flurry of interviews with national news outlets.
While the state is undeniably facing a difficult budget gap, these funds should be used to help Californians stay in their homes.
When asked if the Californian governor could legally appropriate the money, which is supposed to be held in a special fund for the benefit of California homeowners affected by the mortgage/foreclosure crisis, a spokesman for the attorney general declined to comment.
Just last week, the attorney general announced plans to give about half the money to groups that provide housing counseling and legal assistance to homeowners — groups whose budgets have shrunk while demand for their services grows. The other half would be used primarily for investigation of mortgage-related crime.
States using some or all of their money for housing have designated it for a wide variety of programs, like a small fund for low-interest loans to build housing in low-income neighborhoods, in Virginia, and Ohio’s sweeping plan to demolish abandoned property.
In New York, the Attorney General stepped in with $15 million in settlement money for housing counseling and legal assistance when state support ran out last month, and plans to spend the bulk of its $130 million on similar programs. North Dakota will use its tiny allotment, $1.9 million, to provide housing to police officers and emergency responders in its booming oil-field counties, where shelter is scarce.
Using the money for other purposes is shortsighted, housing advocates warn. If you leave homeowners hanging out there to dry, then in the short term maybe you help to meet the budget gap this year, but in the long term the more people we have going through foreclosure, the worse it’s going to be for the economy as a whole.
In some states, redirecting the money could have a racially discriminatory effect, because in some cities black homeowners disproportionately lost their homes. If you dump all of these funds into the general coffers, the African-American homeowners are not going to benefit in any real way because they represent such a small percentage of the larger state.
Hundreds of millions of dollars meant to provide a little relief to the nation’s struggling homeowners is being diverted to plug state budget gaps.
In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nation’s biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and the Governor has proposed using the bulk of that sum to pay the state’s debts.
The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes.
The settlement, reached in February after a year of talks and intervention by the Obama administration, was the second-largest in history involving the states, trailing the tobacco industry settlement, and represented the first large-scale commitment by banks to provide direct aid to borrowers.
As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge. But critics complained that this was the only cash the banks were required to pay — the rest comes in the form of “credits” for reducing mortgage debt and other activities. Even that relatively small amount has proved too great a temptation for lawmakers.
Only 27 states have devoted all their funds from the banks to housing programs, according to a report by Enterprise Community Partners, a national affordable housing group. So far about 15 states have said they will use all or most of the money for other purposes.
In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments.
Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state.
The governor of Georgia has decided to use the discretionary money for economic development. He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in the state.
The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a “civil penalty” won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections.
The federal housing secretary has been privately urging state officials to spend the money as intended. Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live.
Some attorneys general have complied quietly with requests to repurpose the money, while others have protested. The Democratic attorney general of Illinois, said she would oppose any effort to divert the funds. The Republican attorney general of Arizona, said he disagreed with the state’s move to take about half its $97 million, which officials initially said was needed for prisons. But he said he would not oppose the shift because the governor and the Legislature had authority over budgetary matters. The Arizona Center for Law in the Public Interest has said it will sue to stop the transferring of the money.
In California, the Attorney General had played hardball in the settlement negotiations, holding out until the very end for a deal guaranteeing that a large share of the benefits would go to California, and then trumpeting her success in a news conference and a flurry of interviews with national news outlets.
While the state is undeniably facing a difficult budget gap, these funds should be used to help Californians stay in their homes.
When asked if the Californian governor could legally appropriate the money, which is supposed to be held in a special fund for the benefit of California homeowners affected by the mortgage/foreclosure crisis, a spokesman for the attorney general declined to comment.
Just last week, the attorney general announced plans to give about half the money to groups that provide housing counseling and legal assistance to homeowners — groups whose budgets have shrunk while demand for their services grows. The other half would be used primarily for investigation of mortgage-related crime.
States using some or all of their money for housing have designated it for a wide variety of programs, like a small fund for low-interest loans to build housing in low-income neighborhoods, in Virginia, and Ohio’s sweeping plan to demolish abandoned property.
In New York, the Attorney General stepped in with $15 million in settlement money for housing counseling and legal assistance when state support ran out last month, and plans to spend the bulk of its $130 million on similar programs. North Dakota will use its tiny allotment, $1.9 million, to provide housing to police officers and emergency responders in its booming oil-field counties, where shelter is scarce.
Using the money for other purposes is shortsighted, housing advocates warn. If you leave homeowners hanging out there to dry, then in the short term maybe you help to meet the budget gap this year, but in the long term the more people we have going through foreclosure, the worse it’s going to be for the economy as a whole.
In some states, redirecting the money could have a racially discriminatory effect, because in some cities black homeowners disproportionately lost their homes. If you dump all of these funds into the general coffers, the African-American homeowners are not going to benefit in any real way because they represent such a small percentage of the larger state.
For more Real Estate News,
visit the Commercial and Residential Real Estate blog.
For more national and worldwide Business News, visit the Peak News
Room blog.
For more local and state of Michigan Business News, visit
the Michigan Business News blog.
For more Health News, visit the
Healthcare and Medical News blog.
For more Electronics
News, visit the Electronics America blog.
For more Law News,
visit the Nation of Law blog.
For more Advertising
News, visit the Advertising, Marketing and Media blog.
For more Environmental News,
visit the Environmental Responsibility News blog.
For information on website optimization or for the latest SEO News, visit the SEO Done Right
blog.
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