Well, new home sales look to be taking another down turn for this month - to the tune of almost 5%, which is fairly significant in the world of mortgage lending and mortgages, home buyer’s market, and the economy in general. Is it a sign of a slow economy, or what exactly is the deal with the overall slump in the home buying and selling market?
It’s actually the largest decline in new home sales since February, when the home buying market took a larger than life plunge down the economic toilet, dropping almost 12%, which is almost unheard of unless times are tough.
And they are indeed. More and more people are turning to high interest debt such as credit cards to bail them out right now, and people are having to learn to really budget their money better in this time of high energy costs and less jobs that pay higher wages to afford a high lifestyle.
This comes at the same time that a slip in the unemployment rate has occurred ( a good thing actually) so it’s rather oxymoronic that we’ve seen this slow down in new home sales simultaneously, with “good” economic news like lower unemployment.
According to the National Association of Realtors, the average price of homes has taken a turn for the worse, in light of interest rate fluctuation and a freeze on the home buying market in general, owing to a weak economy.
This is now the second fiscal quarter in a row where home prices have not met expectations, and in fact, have actually fallen below the expectations for housing cost. One of the regions most effected by the home price slide is actually by me - Ohio. Columbus OH to be more specific, where it is actually a buyer’s market due to record low housing costs. In other words, you might be getting a steal in many Ohio metropolitan areas, or more money for your buck than you’d normally get.
Why the decline in price? Simply put, there are just more sellers on the market than home buyers right now, making it a soft market for home sellers.
Even home contractors and builders are feeling the squeeze, with their profits and sales falling by the minute. Heck, a perfect example is Ryan homes, who offered us a steal on a house that “retails” for over $300,000. They wanted to waive the points on the loan, as well as give us free add ons, after we declined to buy in July. This shows the stress the home market is feeling now.
What are the best credit card options to get for a kid in college? Are there any that fit this bill? Well, obviously we all know that credit card companies can really charge a huge interest tab to “high risk” college students who may not have necessarity built the greatest credit record for themselves, or simply do not have enough credit card history to justify a low rate credit card.
It is estimated that over 3/4 of all active college students actually have a credit card. A credit card for college students is a college necessity, like food and water. College kids practically live on credit cards many times (unfortunately), and it’s important to find one they will not be paying on for an eternity due to high interest rates that never seem to go away, and make for one awfully LOOOONG payoff period.
Financial experts say that although college kids often times do not have adequate credit history due to their age, they are still entitled to receiving a decent interest rate. By decent, I mean one in the mid teens, which is the “accepted” standard in credit card interest for not getting completely ripped off.
Also they should look for a credit card with no annual fees and a grace period on late payments. This way, they will not end up incurring late fees over and over for only being a few days late if they run into trouble, another road block to getting high interest credit card debt paid off in any reasonable amount of time.
In a recent report, it has been determined that consumers - American consumers, that is - are in more debt than they’ve ever been in. But they’re not borrowing simply to buy items that they shouldn’t be - they’re borrowing to dig themselves out of other debts, which is actually worse and signifies a growing problem here for our economy.
Economists say this is the first time in recorded history that consumers have been in this much debt. Americans actually owe more debt to financial institutions than they actually make per year. Household debt now exceeds household income by an mean average of about 8% - that is just plain scary.
The American middle class is suffering the most, with wages not growing, and the job market stagnating, as well as the skyrocketing cost of living outpacing the raises people receive from their employers.
Experts say that it’s only going to get worse too, since interest rate levels are at a historically good all time low right now too, which means our debt levels should subside, but they have not.
They also say that this shift is due to the rising energy and gas prices, as well as a stagnant hiring and job market, with little advancement in pay, since companies themselves are struggling to make ends meet as well. It’s all a domino effect, and major reform will be needed in all sectors in order to get our economy, and consumer debt, back in check and healthy again.
OK, I know it’s been a rough ride lately, but there is some good news now for those looking to buy a new home. Mortgage loans are back baby - meaning they are now offering lower interest rates on mortgages again.
Ben Bernanke, the almighty money controller in the US, has decided not to budge the rates as was anticipated for loans and more specifically mortgage loans, so people are once again getting the green light to go about their home shopping without worrying about getting ripped off on their loan interest rates.
This is good news for the home buying market, which has somewhat stagnated since the rates have gone up . Many homes have been sitting on the market waiting to be sold for months, sometimes years due to this stagnation.
But, this can also be good if you’re looking for homes because people are getting desperate to sell, and are forced to lower their home’s price. It’s kind of a catch 22, this whole mortgage loan rate thing, but any way yhou slice it, lower interest rates are better for everyone in the end.
With the high energy costs, including the outrageous cost of gasoline lately in the US and abroad, Americans are having to budget less on extracurricular spending and more on energy costs such as electric, heat, air conditioning, and most of all, gas to get them from point a to point b and to and from their jobs.
This is hitting the economy hard, since they have less to spend on the better things in life. It’s all a vicious cycle that is bound to have a profound effect on the economy as a whole. When consumer spending slows on other things beside the bare minimum necessities, the whole economy is affected negatively.
Many people when polled said that they have had to drastically rearrange their budgets, and go out to eat and shop less.