August 22, 2012
A Pause For An Olympic Moment
Our athletes are home and it has occurred to us that the Olympics really provided so many special moments that we all should spend some time to pause and reflect. These moments included Michael Phelps' look of disappointment in his first race to domination of another Olympics at the end of a truly great career. Another great moment was Aly Raisman's first time ever American gold for the floor exercise and if you missed that routine, you should view the video. It was breathtaking. There was Misty May-Treanor, a winner a third gold medal for beach volleyball, skipping the closing ceremonies to fly home and appear at the Florida Marlin's baseball stadium to surprise her husband, a Los Angeles Dodger and an ex-Marlin. Matt Treanor missed her performance because he is a major league baseball player. Misty got a standing ovation from the tens of thousands there, pretty rare for the wife of an opposing player. But the moment that really stood out for many was American sprinter Manteo Mitchell breaking his leg and still finishing his leg of the relay so that his team could eventually win the silver medal. We must take our hats off not only to the American athletes, but those around the world.
The next you might ask is---what does this all have to do with an economic commentary? The answer is everything and we could spend hours giving examples. For one, if the world can compete in such an event, imagine if we cooperated in all areas instead of spending trillions of dollars on war and preventing war? Imagine the economic prosperity we could enjoy. Closer to home, what if Congress suspended their own battles and came to an agreement on a budget which avoided the fiscal cliff we would be facing if automatic budget cuts go into effect? Sure Congress will most likely come to an agreement at the last minute--but how much stronger will our economy be if they did so now and we did not have to sweat it out while the battle ensues and gets heated as the election gets closer? One can surmise that Manteo Mitchell finished his sprint in excruciating pain because it was a relay and if he did not finish his team members would not have earned a medal. Well, what we have to do with the budget will cause the pain of compromise, especially before the election. But the members of the American public will be depending upon our leaders to do the right thing. We would love to see an Olympic moment from our own government.
Eighty-five percent of Americans say they prefer home ownership over renting, according to a newly released Fannie Mae national housing survey of more than 12,000 interviews from 2011. The study finds that the housing and financial crisis has not been a big factor in Americans’ decisions to rent or buy. "The nonfinancial benefits that people derive from the consumption of housing mitigate the negative financial experiences that many home owners have had," says Steve Deggendorf, one of the authors of the study. Instead, “for a large number of people, emotions rule. We need to think about how they approach the housing decision and think about the kind of help that they may need [in the process].” The researchers note that it’s important to help Americans take a more conscious approach in their home-buying decisions, assisting them to better balance their “wants” in a home with what they can actually afford. The researchers add that buyers' emotions often lead them to ignore their practical ability to buy a home at all. "Our study shows that the negative housing events of the past few years have not discouraged people from wanting to own a home," according to the study. "Exposure to default, perceived home value appreciation/depreciation, and self-reported underwater status are not significant factors in the models in predicting individuals’ intentions to own a home for their next move." Instead, 33 percent of current renters say demographics like employment, age, income and marital status are important drivers for them on whether they will continue to rent or purchase a home. Only 25 percent of those surveyed cited financial attitudes as having an impact on their next housing decision.
Source: Fannie Mae
The echo boomers — those born between the late 1970s and early 1990s — are expected to help drive a housing market recovery in the coming years, according to a new report by Harvard University’s Joint Center for Housing Studies. Already, this generation is outpacing the number of baby boomers who at the same age were home owners. Studies show that about 900,000 households are made up of echo-boomer home owners, which compares to 500,000 baby boomers who owned homes at the same point in their lives. About 31 percent of echo boomers have already made a recent home purchase, according to data from the National Association of Realtors®. That number is expected to grow, according to housing analysts. About 5 million echo boomers turn 21 every year. According to KCM, a market and real estate commentator, echo boomers will likely add 1 million new households per year over the next decade.
Source: Business Insider
In a sign that the economy is building momentum on a sounder foundation than during the last housing boom, demand for prime residential loans is at its highest in 14 years, according to a Federal Reserve survey of bank senior loan officers. The quarterly survey showed that 54 percent of loan officers see stronger demand for residential loans to buyers with the best credit, the highest percentage since 1998, points out Michael Darda, chief economist and market strategist for MKM Partners. “We continue to believe the combination of a gradually healing financial system, a gradually healing labor market and a recovery in housing from a low base should drive the business cycle forward and may even lead to a pickup in activity before too long,” wrote Darda, in a report to clients. Easing lending standards is partly the cause for the pick-up. More importantly however, the survey shows that the economy’s biggest borrowers — who tend to lead the rest of the pack — have started to shore up their household finances after two devastating bear markets in the last 12 years. The Fed survey also showed loosening standards for business loans, another important leading indicator for the economy, according to Darda. “The fact that households are increasing their demand for residential loans tells us two things: one, they view housing as a fundamentally cheap asset and two, their future job and income prospects are better than what traditional consumer confidence surveys suggest,” said Joe LaVorgna, chief U.S. economist at Deutsche Bank.
Source: CNBC
No comments:
Post a Comment