Money, Debt, Real Estate, and Credit talk with Jeff Underwood

Phoenix Arizona ranks as the most miserable city in America

Phoenix Arizona ranks as the most miserable city in America! How is this possible with all the sunshine?
article – http://blogs.wsj.com/economics/2011/03/29/where-are-americans-most-miserable/
and the map http://graphicsweb.wsj.com/documents/DJFX/pu.php?graphic=MISERY20110329

Join me for my latest episode of The Ugly Money Show on iTunes or on http://www.BlogTalkRadio.com/JeffUnderwood. And on Facebook at Facebook.com/TheUglyTruthAboutMoney

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Jeff Underwood, The Street Economist
The Ugly Truth About Money

Phoenix Arizona ranks as the most miserable city in America

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Standard & Poors released its Case-Shiller Index for the month of January this week. The index is a home valuation tool, measuring the monthly and annual changes in home prices in select cities nationwide.

January’s Case-Shiller Index gave a poor showing. As compared to December 2010, home values dropped in 19 of the Case-Shiller Index’s 20 tracked markets. Only Washington, D.C. gained. The results were only modestly better on an annual basis, too.

18 of 20 markets worsened in the 12 months ending January 2011.

According to the report, values are down 3.1% from last year, retreating to the same levels from Summer 2003. As a buyer or seller in today’s market, though, don’t read too much into it. The Case-Shiller Index is far too flawed to be the final word in housing.

The index has 3 main flaws, in fact.

The first flaw is the Case-Shiller Index’s lack of breadth. The report is positioned as a national index, but its data is sourced from just 20 cities nationwide.

Putting that number in perspective: the Case-Shiller Index tracks home values from fewer than 1% of the 3,100 U.S. municipalities – yet still calls the report a “U.S. Average”.

A second flaw in the Case-Shiller Index is how it measures home price changes, specifically. Because the index only considers “repeat sales” of the same home in its calculations, and only tracks single-family, detached property, it doesn’t capture the “full” U.S. market. Condominiums, multi-family homes, and new construction are ignored in the Case-Shiller Index algorithm.

In some regions, homes of these excluded types represent a large percentage of the market.

And, lastly, the Case-Shiller Index is flawed because of the amount of time required to release it.

Today, it’s almost April and we’re talking about closed home resales from January which is really comprised of homes that went under contract in October — close to 6 months ago. Sales prices from 6 months ago is of little value to today’s Phoenix home buyer, of course.

The Case-Shiller Index can be a helpful tool for economists and policy-makers trying to make sense of the broader housing market, but it tends to fail for individuals in Seville like you and me. When you want accurate, real-time housing figures for your local market, talk to your real estate professional instead.

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Jeff Underwood, The Street Economist
The Ugly Truth About Money

Mortgage markets worsened last week as nuclear meltdown concerns eased across Japan, and the war within Libya moved closer to a potential finish.

Wall Street voted with its dollars, and a return to risk-taking emerged. “Safe haven” buying softened last week and, as a result, conforming mortgage rates in Arizona made their biggest 1-week spike since late-January.

Mortgage rates remain historically low, but well above their November 2010 lows.

This week, rates could run higher again. Friday’s jobs report is a major story and it will affect mortgage rates in Chandler and across the country. Jobs are a key component of the nation’s economic recovery, and as the economy has improved, mortgage rates have tended to rise.

Economists expect that 190,000 jobs were created in March. If they’re correct, it will raise the 12-month tally to 1.3 million net new jobs created nationwide. This is still less than the 2 million jobs lost in the 12 months prior, but it’s a positive step that suggests sustained growth.

A positive net new jobs figure for March would mark the first time since June 2007 that jobs growth was net positive 6 months in a row. If March’s final figures are better than expected, expected mortgage rates to rise. If the figures are less, look for rates to fall.

The Unemployment Rate is expected to stay sub-9.0 percent, too.

Other news that could change rates this week include Monday’s Pending Home Sales report, Tuesday’s Consumer Confidence data, and any one of the 4 speeches from members of the Fed. In general, data and/or rhetoric that suggest more growth in 2011 will cause mortgage rates to rise.

If you are still floating a mortgage rate and have yet to lock one in, this week may represent your last chance for low rates. Good news about the economy will put pressure on mortgage rates to rise.

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Jeff Underwood, The Street Economist
The Ugly Truth About Money

What is the American Dream?

In this episode of The Ugly Money Show with Jeff Underwood, we are going to talk about the American Dream.  CLICK HERE

What do you think is the American Dream?  Most people say that owning a home is the American Dream.  I think it is time to get back to what the true American Dream really was early in our country’s history.

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Also join me at Facebook.com/TheUglyTruthAboutMoney.

Jeff Underwood, The Street Economist
The Ugly Truth About Money

What is the American Dream?

Sales of newly-built homes plunged 17 percent to an seasonally-adjusted, annualized 250,000 units in February, and the supply of new homes rose to 8.9 months in February — a 1.5 month jump from January.

It’s the lowest New Home Sales reading in recorded history, according to the Census Bureau, and the third straight report to signal that home values may be slow to rise in Chandler and nationwide this season.

Earlier this week, the National Association of REALTORS® reported Existing Home Sales down 10 percent from February, and the Federal Home Finance Agency said home values slipped 0.3 percent between December and January.

The media has picked up on the trend, too.

• No Spring In Housing’s Step (WSJ)
• Is Housing Really In Recovery (CNBC)
• Experts See Weak Recovery (UPI)

There’s two interesting angles here. First, the one that’s largely neglected in the stories online.

Although New Home Sales read -17% last month, the data’s Margin of Error read ±19%. This means that, once additional homes are added to February’s New Home Sales tally, it’s possible that the reading actually rose 2%.

Because the Margin of Error exceeds the measured reading, February’s New Home Sales figures are of “zero confidence”. The Census Bureau even says as much in its report.

Or, if the initial reading is accurate, a second story emerges. Namely, how an increase in home supply may help this season’s buyers to negotiate better prices for a home, and upgrades from a builder.

There’s often more to a real estate story than its headline and February’s New Home Sales proves it.

Also, join me for my latest episode of The Ugly Money Show on iTunes or on http://www.BlogTalkRadio.com/JeffUnderwood.

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Jeff Underwood, The Street Economist
The Ugly Truth About Money

Mortgage markets improved again last week despite an inflation-acknowledging statement from the FOMC and stronger-than-expected jobless data.

Usually, events like this would lead mortgage rates higher, but violence in the Middle East and worsening fear for public safety in Japan took center stage instead, spurring a massive, global flight-to-quality instead.

Rate shoppers in Chandler  benefited.

As safe haven buying increased last week, conforming mortgage rates dropped, falling to their lowest levels since January. It marked the 5th straight week through which mortgage rates improved and is the longest such streak since August 2010.

This week, rates may run lower again. You may not want to gamble on it, though. Here’s why.

In general, when there’s inflation in the U.S. economy, mortgage rates rise. This is because inflation devalues mortgage bonds, the underlying security on which mortgage rates are based.

So, last Tuesday, the Federal Open Market Committee met and in its post-meeting press release, the group said inflation pressures were building, a signal that rates should rise. It then went one step further.

To keep the economy from slipping back into recession or into disinflation, the FOMC also said it plans to keep its existing monetary policies in place for the foreseeable future.  This, too, is considered inflationary — another signal that rates should rise. And they did.

Immediately following the FOMC announcement, mortgage rates spiked. But it didn’t last.

Starting Wednesday, the battles in Libya grew more intense, and Japan battled with its own domestic crisis (i.e. a potential nuclear meltdown). The economic implications of the events spurred the purchase of “safe” assets, and mortgage bonds improved.

And this is why mortgage rates won’t stay low for long.

Eventually, Wall Street will come to terms with Libya and Japan and the flight-to-quality will reverse. Inflation, however, is not likely to lessen. At least, not anytime soon.  Therefore, this week may represent the low-point in mortgage rates for a while. It’s important to lock your low rate while you still can.

There isn’t much economic data due this week so mortgage rates will take their cues from the broader market. If you haven’t locked a rate yet, or were waiting for rates to fall, this might be your best chance. Call your loan officer as soon as possible and get a fresh rate quote today.

Also, join me for my latest episode of The Ugly Money Show on iTunes or on http://www.BlogTalkRadio.com/JeffUnderwood.

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Jeff Underwood, The Street Economist
The Ugly Truth About Money

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The US Debt jumped $72 Billion the same day that the government voted to cut spending by $6 Billion!! Are you kidding me???

Also, join me for my latest episode of The Ugly Money Show on iTunes or on http://www.BlogTalkRadio.com/JeffUnderwood.

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Jeff Underwood, The Street Economist
The Ugly Truth About Money

Move Your Money Month Facebook Event this May

You owe it to yourself to look at this movement!  You can do this!  Move Your Money Month is May 2011.  It is time to start moving your money to smaller community banks and credit unions.  Support local business and jobs.  Join me at the “Move Your Money Month” event on Facebook.  CLICK HERE.         And SHARE this with others.

11 Million Homes Upside Down In America

With 11 million upside down mortgages, what does that mean for the future housing market and for you?

On this episode of The Ugly Money Show – Real Estate And Mortgage Talk with Jeff Underwood – we will discuss this very difficult situation that many homeowners in America are facing.   Join me.  CLICK HERE or http://www.blogtalkradio.com/jeffunderwood/2011/03/14/11-million-upside-down-mortgages-real-estate-and-mortgage-talk-with-jeff-underwood

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The Ugly Money Show with Jeff Underwood ….. http://www.blogtalkradio.com/jeffunderwood
iTunes – The Ugly Money Show

Jeff Underwood, The Street Economist
The Ugly Truth About Money

11 million homes upside down in America

Today, for the second straight meeting, the Federal Open Market Committee voted unanimously to leave the Fed Funds Rate unchanged within its target range of 0.000-0.250 percent.

The vote was 10-0.

In its press release, the FOMC noted that since its January 2011 meeting, the economic recovery “is on firming footing”, and that the labor markets are “improving gradually”. In addition, household spending “continues to expand”. Nonetheless, the Fed said, the economy remains constrained by rising commodity prices and the “depressed” housing sector.

The FOMC statement also re-affirms the group’s plan to keep the Fed Funds Rate near zero percent “for an extended period”, and to keep its $600 billion bond market support package — more commonly called “QE2″ — intact.

And, lastly, for the third straight time, the Federal Open Market Committee’s post-meeting release statement included a paragraph detailing the Federal Reserve’s dual mandate of managing inflation levels, and fostering maximum employment. Although it acknowledged inflationary pressures on the economy, the Fed said inflation remains too low for the economy currently, and that unemployment remains “elevated”.

In time, the Fed expects both measurements to improve.

Mortgage market reaction to the FOMC has been negative since the statement’s release. Mortgage rates in Phoenix are unchanged, but poised to worsen.

The FOMC’s next scheduled meeting is a 1-day event, March 15, 2011.

Jeff Underwood, The Street Economist

Also, join me on Facebook.com/TheUglyTruthAboutMoney.

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!