The Real Estate Report 9/11/2013

The Employment Report "Report"

Every month we seem to sit on edge waiting for the employment numbers. There is good reason for this, of course. During the recession America lost several million jobs and we have yet to recover fully from these significant losses. Though the unemployment rate keeps falling from its peak during the recession, it is nowhere near the low of 4.4% we reached in 2007. What we are talking about is slow and steady progress. A drop in the unemployment rate from 10.0% to 7.3% is pretty significant. But at least some of that decrease is due to many adults leaving the labor force. That includes those who are retiring and those who become discouraged and put their job hunt on hold. For example, a spouse may decide to stay at home with their children if the job they can find does not pay for child care and other expenses of working.

This slow and steady progress mirrors exactly the state of our economic recovery for the past four years. Slow growth is much better than a recession or no growth. But it is not strong enough to satisfy our appetite for repairing the damage done by the recession. The real question is whether the Federal Reserve Board thinks that the jobs numbers are strong enough to start easing off the gas pedal with regard to stimulus activity. Interest rates have risen precipitously this year in anticipation of the Fed reversing course. The Fed is watching the jobs numbers closely as well. The average jobs creation for the past three months has been just under 150,000 per month. That is a big improvement from the recession years, but not strong enough to keep up with population growth. If the Fed concludes the numbers are not strong enough, we may enjoy lower rates for a longer period of time. And that would be good news. The Fed meeting this month will be watched closely for clues in this regard.

 

Once you've graduated from college, how soon should you be out of your parents' house and living on your own? Well, the younger you are, the more time you're willing to give. A new study by Coldwell Banker Real Estate finds that younger parents are more forgiving of their kids living at home post-college than older parents. Overall, 20 percent of Americans say it's OK for adult children to live at home as long as they want, while 13 percent said it's never OK to live at home with mom and dad after college, according to the study. But Millennial parents — those ages 18 to 34 — say it's acceptable for adult kids to live at home for up to six years after college. Parents ages 55 and older say kids should be out of the house by no more than three years after college. “In terms of transitioning into independent adulthood, it’s almost as if 27 is the new 18,” said psychotherapist Dr. Robi Ludwig, who serves as Coldwell Banker's lifestyle correspondent. “Living at home can be a great opportunity for young adults who need some time to get on their feet, but it’s only beneficial if the time is used wisely. Our twenties are a very crucial time because the decisions we make and the lessons we learn then influence who we become as adults.” Despite the leniency among some parents, 65 percent of Americans say they believe adult kids living at home are overstaying their welcome, according to the study. That sentiment is stronger among parents 55 and older (73 percent) than Millennial parents (58 percent). Source: Coldwell Banker Real Estate

Owning a home can make families healthier, happier, and more financially secure, according to new research by Canada Mortgage and Housing Corp. on the benefits of home ownership. Researchers worked with Habitat for Humanity families to evaluate how their lives changed after moving into their homes. Eighty-nine percent of the Canadian families surveyed said their lives improved since they moved into their homes. Eighty-six percent said they’re happier since owning a home. The survey also found home ownership led to an improvement in children’s school performance. The families reported that the children had increased confidence, improved behavior, higher grades, and enjoyed school more after becoming home owners. What’s more, more than 75 percent of families surveyed say their health had improved since becoming home owners. They reported fewer illnesses caused by colds, flu, allergies, and stress, according to the study. Canada’s home ownership rate -- at about 70 percent -- is one of the highest in the world. The study’s release coincided with the National Association of Realtors(R) recent release of a new publication, “Social Benefits of Homeownership and Stable Housing." "There is evidence from numerous studies that attest to the benefits [of home ownership] accruing to many segments of society,” according to Canadian researchers. “Home ownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency." Source: Realty Times

The housing market is inching closer to what it once was: Home prices are now within 15.2 percent nationally from their peak, according to a new report by Lender Processing Services. The LPS price index rose in June to $229,000, up 6.9 percent from last year's levels. In June 2006, the peak was $270,000. However, two states — California and New Jersey — are still playing catch up to their peak levels. California home prices are still down 26.3 percent and New Jersey is down 21.2 percent from its peak, according to LPS’ index. Meanwhile, Massachusetts is only 10 percent from its peak housing price levels, and Pennsylvania and Tennessee are about 5 percent from their pre-crash highs, LPS says. Texas and Colorado are two states that surpassed their pre-crash peaks. Source: Mortgage News Daily

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