Extended Homebuyers Credits & Jobless Benefits

New federal actions aid the real estate sector and the unemployed.

 provided by Rufino Autus, Jr. PRP, CRPC

After unanimous passage in the Senate and a 403-12 passage in the House of Representatives, President Obama signed H.R. 3548 into law on November 6. The bill extends and expands a key tax credit for homebuyers while also offering more help for those out of work.1,2

 The $8,000 credit for “first-time” homebuyers continues. This tax break is now extended until May 1, 2010. If you have never owned a home or haven’t owned a home in the previous three years, you are considered a “first-time” buyer and therefore eligible for the credit (it is a credit of up to $8,000, by the way). You must sign your purchase agreement before May 1, 2010 and close the transaction before July 1, 2010 to qualify for this tax break.3

The $6,500 tax break for move-up buyers. Okay, maybe you aren’t a “first-time” buyer. You may still qualify for this new real estate credit. Have you lived in your current home for more than five consecutive years? You may be eligible for a credit of up to $6,500 if you move out of that home and buy another. Again, you have to sign your purchase agreement before May 1 and close before July 1 to get the tax break.3

Worth noting: BusinessWeek.com contacted Sen. Chris Dodd’s office (the Connecticut lawmaker chairs the Senate Banking Committee) and received word that move-up buyers can qualify for this $6,500 credit even if they have signed a purchase contract prior to November 6, provided the purchase closes before July 1.4

Does everyone qualify for these credits? Not quite. They phase out for individuals with adjusted gross incomes of more than $125,000 a year and couples with AGI of more than $225,000 a year. (The old phase-outs respectively kicked in at $75,000 and $150,000. These higher phase-outs mean that the credit can now help an additional segment of the housing market.)5

You can’t buy a vacation home and claim one of these credits – they only apply to principal residences. In fact, the home you buy has to have a sale price of $800,000 or lower.5

What will this do for the economy? “Every economist will tell you we have to steady the housing market before the economy will turn around,” Sen. Dodd expressed on November 5. “We can’t afford to let this tax credit expire now.” Respected Moodys.com economist Mark Zandi agrees, saying that “from a macroeconomic perspective, nothing is more important than stabilizing housing values.” Zandi thinks that the $8,000 credit has led to 400,000 additional home sales in 2009. On the other hand, Dean Baker, the co-director of the Center for Economic and Policy and Research, questions why the extension is necessary: “For the most part, you’re just giving people money for something they would have done otherwise.” The Joint Committee on Taxation estimates that extending these credits into 2010 will cost $10.8 billion across the next decade.5,6

An extension of unemployment benefits. H.R. 3548 – sponsored by Rep. James McDermott (D-WA) – additionally extends state jobless benefits by up to 20 weeks. This will happen as a result of another extension – an extension of the federal unemployment tax on employers until June 30, 2011.5

If you are one of nearly two million Americans whose jobless benefits are set to run out at the end of 2009, this extension will help you. Your benefits will last at least another 14 weeks into the new year – in fact, they will last for another 20 weeks if you live in a state where the unemployment rate exceeds 8.5%. Have your unemployment checks already stopped? You may reapply for benefits.5

A chance for companies to convert losses into cash. What? Really? Yes. There is one provision of the new legislation that many have overlooked: it widens the window of time on the net-operating loss carryback. It lets all businesses apply losses from either 2009 or 2008 to any five years prior to 2008. So business owners, by virtue of the new legislation, have the potential for an IRS refund on the taxes they paid for the five years prior to 2008. There are two asterisks here. One, refunds for taxes in the fifth year of the carry back shrink by 50%. Two, any business that received TARP funds can’t take advantage of this tax break.7

 

Rufino Autus is a Representative with Centaurus Financial, Inc and may be reached at http://www.autusfinancialgroup.com, (858)486-4198 or rautus@cfiemail.com.

 

 

 

These are the views of Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

 

 Citations. 1 google.com/hostednews/ap/article/ALeqM5hZg_pvAKDYQV-RYmrmcBrJTaJ5CAD9BQ71981 [11/6/09] 2 latimes.com/business/la-fi-tax-credit6-2009nov06,0,2604220.story [11/6/09] 3 boston.com/business/articles/2009/11/06/first_time_home_buyer_credit_jobless_benefits_both_extended/ [11/6/09] 4 businessweek.com/the_thread/hotproperty/archives/2009/11/who_qualifies_f.html [11/6/09] 5 money.cnn.com/2009/11/05/news/economy/Extending_unemployment_benefits/index.htm?postversion=2009110612 [11/6/09] 6 latimes.com/business/la-fi-tax-credit5-2009nov05,0,1817786.story [11/5/09] 7 money.cnn.com/2009/11/05/news/economy/tax_breaks_for_business/index.htm?postversion=2009110611 [11/5/09]

Breaking Bad Money Habits

   Changing your behavior may help you improve your financial picture.

Many of us plan thoughtfully for all kinds of life goals. Yet many of us spend impulsively, using our money on the moment rather than saving or investing it for the future.

This last recession caused us to take a second look at where our dollars go. If you seem to be making adequate money and yet dollars still appear to be slipping away from you, maybe it is time to break some budgeting and spending habits.   

First of all, have a budget. Many people live without one – and that includes many affluent people. This exercise is starkly simple, but might be illuminating: make a two-column chart, with the left column listing your monthly income and the right column detailing your expenses. Detail them as best as you can, type and monthly amount. Include your credit card expenses. This little exercise shows you how much you are spending on essentials and how much of your income you are assigning to comparative frivolities. Perhaps you will find some dollars you could reassign to planning for your financial future.

Distinguish needs from desires. Do you need that material item or merely want it? Slick marketing and advertising leaves many consumers unable to tell the difference. They run up debts to buy what they want, rather than what they need. How many of them understand that by borrowing, they are actually spending away future earnings?   

Discern the difference between good & bad debt. Do you know the difference? A bad debt is a debt you incur on a disposable item or a durable good that will depreciate. It is a debt on something that has no potential to gain value. You want to avoid as many bad debts as you can. Of course, there is also good debt – for example, a mortgage, a business loan or a student loan. These are so-called “investment debts” that can potentially create value down the road.

Educate yourself. Some people are very cavalier when it comes to spending and saving money. Others are convinced that they will never be able to build wealth, so they spend their days addressing short-term financial needs and give no thought to the wealth and income they will need in maturity.

In both cases, the root problem is a lack of education. Those who spend money like water don’t understand its value; those who shun financial planning and investing don’t understand its potential. People with greater degrees of financial education tend to be more rational when it comes to financial decisions. (Not always, but often.) 

Set financial goals and take them seriously. When people educate themselves about money – the ways to potentially make it, the ways to plan to protect it – they start to see how the financial world “works” and they tend to explore their own financial potential. This exploration may lead them to meet with a financial advisor. That conversation can inspire them to set and plan for specific objectives, and get a relationship going – a shared commitment to wealth building. If you haven’t had such a conversation, today is as good as any day for that to happen.

RufinoAutus, CRPC, PRP is a Representative with Centaurus Financial, Inc.  and may be reached at www.autusfinancialgroup.com (858)486-4198 or rautus@cfiemail.com

Is America prepared to retire?

64% of Americans have no financial strategy at all. That’s right – no plan whatsoever to build wealth or keep it. That finding comes from the 2009 National Consumer Survey on Personal Finance conducted by the Certified Financial Planner Board of Standards, Inc. (The survey collected data from 1,700+ U.S. residents.)¹

Only 17% of us have a written financial plan that is updated regularly. So congratulate yourself if you are in that group. The CFP Board found that just 17% of the 36% polled who did have a written financial plan had reviewed it in light of changing times. Notably, 48% said they had benefited from having a written plan.^1,2

Just 38% of the 36% having written financial plans retain a financial advisor. The really troubling part: 37% of those with written plans are doing their financial planning on their own. Another 12% of respondents with written plans have consulted a friend or family member who isn’t a financial services professional for advice.¹

Why don’t more people have a financial plan? After all, Americans of all incomes and savings levels certainly are free to set financial goals. In the survey, the reasons varied. Some cited the expense of engaging a financial advisor; some said they get along just fine without a financial plan, and others felt their finances weren’t complicated enough to warrant one. Others were hazy about financial services industry qualifications – 40% of respondents had no idea that there were professional credentials or designations for financial advisors.

Syndicated financial columnist Humberto Cruz recently noted that when he told some fellow vacationers in Orlando that he wrote about financial planning, they all asked him if he gave stock tips. He had to explain that he was simply a journalist, not a financial planner.^3,4

Defined goals lead to definite plans. If you set financial objectives and plan for them, you vault ahead of most Americans – at least according to the CFP Board’s findings. A written financial plan does not imply or guarantee wealth, of course; nor does it ensure that you will reach your goals. Yet that financial plan does give you an understanding of the distance between your current financial situation (where you are) and where you want to be. Too many Americans, it seems, have little comprehension of their financial situation or their financial potential.

How much planning have you done? Retiring without a financial plan is an enormous risk; retiring with a financial plan that hasn’t been reviewed in several years is also chancy. A relationship with a financial advisor can help to bring you up to date about what you need to do, and provide you with more clarity and confidence when it comes to the financial future.

 

Rufino Autus is a Representative with Centaurus Financial, Inc and may be reached at http://www.autusfinancialgroup.com, (858)486-4198 or rautus@cfiemail.com.

 

These are the views of Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.

 Citations.

¹ cfp.net/downloads/CFP_Board_2009_National_Consumer_Survey.pdf [7/24/09]

² reuters.com/article/pressRelease/idUS132983+24-Sep-2009+BW20090924 [9/24/09]

³ sltrib.com/business/ci_13467337 [10/2/09]

⁴ chicagotribune.com/topic/hc-cl-cruz-bio,0,84843.story [10/9/09]

What do kids know about building wealth?

What would you like to have known at 18, 25, or 35?

When you were 20 or 25, what was your level of financial literacy? What did you think of when the nightly news mentioned Wall Street or the Federal Reserve? Did you even care about those things at that time?

Few young adults fully understand how wealth can be built. That’s a shame. Decades from now, many will wish they had started planning to amass wealth earlier in life. How can you encourage your children to start that process?

Help them start before they turn 18. If your child is a minor, there are still several ways she or he can get a head start on growing wealth. Besides the basic move of opening a savings account, it is possible for your child to open a Roth IRA. The I.R.S. sets no minimum age limit for IRA contributions; if your son or daughter has earned income from a job and filed taxes, he or she can open a Roth or traditional IRA with your assistance and contribute to it. Your child may also buy a government bond with your help, or buy equity shares or make a direct stock purchase via a guardian account or custodial account.^1,2,3

Encourage them to set life and financial goals. Why not? It is not far-fetched if your teen wants to become a millionaire; given inflation over time, we may need to be millionaires down the road. Even if your son or daughter simply sets a life goal – for example, to start a business someday or to graduate from a prestigious university – he or she will start to think about what that will take financially.

Wean them off plastic. As your children become young adults, the great lesson is a simple one – spend less than what you make. If they have to go into big debt, it better be for education’s sake and not for comparatively frivolous reasons. Remind them that it is possible to pay off debt and plan to build wealth at the same time.

Look back over your life for a moment. What shaped you more – the material things you bought when you were 18 or 21, or the experiences you had when you were 18 or 21? It is wiser for your son or daughter to spend money on an experience that may “pay off” in life skills and character development, rather than on a material item that will inevitably depreciate. 

Convey that is not what you own, but what you do that counts. Hopefully, your son or daughter will start investing early – and sensibly. Some young investors like the thrill of day trading – of looking for the next hot stock that will be the talk of Wall Street. It is better for your son or daughter to learn principles of diversification from the start (and not retrospectively). Getting rich slowly is not a bad idea. Investing seriously means staying invested through market cycles.

Remind them of the power of compounding. If your child opens an IRA or 401(k) before age 30, that does so much in terms of retirement savings potential. Yet few young adults focus on these retirement savings tools. The tax information service CCH took a poll in 2007 and found that just 4% of employees aged 25 and younger were maxing out retirement plans. That same year, Charles Schwab conducted a survey and learned that only 40% of adults aged 26-40 were contributing to an IRA.⁴

Looking back, what did you wish you had known? Today is as good as any day to let your son or daughter know about some investment and asset-building principles. At first glance, it may seem boring to them – but making money sure isn’t. The more they know now, the more years they have on their side to grow wealth.

 

Citations.

¹ irs.gov/publications/p590/ch02.html#en_US_publink10006507 [TY2008]

² kiplinger.com/columns/drt/archive/2008/dt080130.html [1/30/08]

³ investopedia.com/ask/answers/06/underagebrokerageaccount.asp [1/30/08]

⁴ articles.moneycentral.msn.com/CollegeAndFamily/MoneyInYour20s/YoungAdultsAllButIgnore401ksIRAs.aspx?page=all [5/3/07]

Weekly Economic Update for the Week of September 28, 2009

Rufino Autus, Jr. Presents

Weekly Economic Update for the Week of September 28, 2009

_______________________________________________________________________________

 Quote of the week. “It is characteristic of wisdom not to do desperate things.”– Henry David Thoreau

 How strong is the housing recovery? That was a major question on Wall Street last week. The Commerce Department had new home sales up 0.7% for August, below expectations of analysts but still rising to the highest level in almost a year. However, existing home sales fell 2.7% in August – the first dip since March. In better news, the backlog of unsold existing homes shrank to 8.5 months in August, down from this recession’s peak of nearly 12 months; 6 months is typical in a healthy housing market.^1,2 

Fed holds rates, winds down auctions. The other big question last week: was the timing right for the Federal Reserve to scale back its auctions of Treasuries and cash loans? The auctions will be gradually decreased to $100 billion in January from the current $450 billion. As expected, the Fed left the key interest rate alone last week. It also said it would fulfill its plan to buy $1.25 trillion in mortgage-linked securities by March.³

 Breaking down durable goods data. In August, durable goods orders slipped 2.4%. The silver lining (of sorts): excluding transportation orders, durable goods orders were merely flat last month.⁴

 Fresh optimism. The Conference Board’s leading economic indicators index rose 0.6% in August – the fifth straight monthly gain. The Reuters/University of Michigan consumer sentiment index rose to a final September number of 73.5, far above the 65.7 mark registered in August.^1,5 

A challenging week for stocks. The home sales statistics and the Fed’s plan to scale back emergency lending programs weighed on equities. The S&P 500 came in at 1,044.38 at the Friday close. The NASDAQ finished the week at 2,090.92, and the DJIA was at 9,665.19 at the closing bell Friday.⁶ 

% Change	Y-T-D	1-Yr Avg	5-Yr Avg	10-Yr Avg
DJIA	+10.13	-12.31	-0.76	-0.60
NASDAQ	+32.59	-4.37	+2.25	-2.37
S&P 500	+15.62	-13.63	-1.18	-1.82
Real Yield	9/25	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.60%	2.09%	1.78%	4.04%

(Source: CNNMoney.com, ustreas.gov, bls.gov, 9/25/09)^7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 

Riddle of the week. It has keys that open no locks. Yet it lets you enter and create spaces. What is it?

Contact my office or see next week’s Update for the answer.

 Last week’s riddle: You buy 10 shrubs. How can you plant them in five rows with four in each row? 

Last week’s riddle answer: Draw a five-pointed star. Plant one tree at each point, and one tree where the sides intersect.

 

Please feel free to forward this article to family, friends or colleagues.

___________________________________________________________________

 Autus Financial Group Disclosure

 These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. 

Citations.

1 bloomberg.com/apps/news?pid=20601087&sid=a9xREfkw71Qc [9/25/09]2 voices.washingtonpost.com/economy-watch/2009/09/aug_existing_home_sales_drop_u.html?hpid=moreheadlines [9/24/09]

3 bloomberg.com/apps/news?pid=20601068&sid=aiRVSHpimr1E [9/24/09]

4 marketwatch.com/story/us-durable-goods-orders-tumble-24-2009-09-25 [9/25/09]

5 npr.org/blogs/thetwo-way/2009/09/leading_indicators_economy_rec.html [9/21/09]

6 cnbc.com/id/32918723 [9/25/09]

7 money.cnn.com/data/markets/dow/ [9/25/09]

7 money.cnn.com/data/markets/nasdaq/ [9/25/09]

7 money.cnn.com/data/markets/sandp/? [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F25%2F08&mode=add&symb=DJIA [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F24%2F04&mode=add&symb=DJIA [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F24%2F99&mode=add&symb=DJIA [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F25%2F08&mode=add&symb=COMP [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F24%2F04&mode=add&symb=COMP [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F24%2F99&mode=add&symb=COMP [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F25%2F08&mode=add&symb=SPX [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F24%2F04&mode=add&symb=SPX [9/25/09]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F24%2F99&mode=add&symb=SPX [9/25/09]

8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/25/09]

8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [9/25/09]

8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_1999.shtml [9/25/09]

9 treasurydirect.gov/instit/annceresult/press/preanre/1999/ofm70799.pdf [7/7/99]

Don’t forget these 2009 tax breaks!

 

Plan to exploit them before they expire.

The year goes by, you get busy … and tax-saving opportunities slip away. So as a reminder, this article is here to reacquaint you with some of the notable federal tax breaks offered this year.

The first-time homebuyer credit. This is the up-to-$8,000 credit available in 2009 to anyone who hasn’t owned a home during the previous three years. (It is subject to phase-outs at certain income levels.) The home you buy has to be your principal residence, and you have to buy it before December 1, 2009. The credit does not have to be paid back.

The IRA charitable rollover. This is the move that lets your IRA trustee make a tax-free direct transfer of up to $100,000 from your IRA to a charitable organization. This option is scheduled to go away in 2010. You must be age 70½ or older to do this.

3 don’t-miss deductions for businesses. When it comes to new cars and light trucks used for business means, the maximum first-year depreciation deduction has been increased by $8,000 for cars placed in service before 2010. The Section 179 deduction (that’s the one that lets you write off the costs of certain new and used business assets during their first year of use) is still at $250,000 for 2009, instead of the prior $133,000. The first-year bonus depreciation break of $50,000 is still in place for 2009, and even the biggest businesses can take advantage of it.

The new car sales tax deduction. Okay, “cash for clunkers” is over, but you still may be able to deduct state and local sales and excise taxes if you buy a car, motorhome, motorbike or light truck. You can itemize the deduction or just add it to the amount of your standard deduction.

A major tuition tax break. In 2009, you can claim an above-the-line deduction for “qualified tuition and related expenses” relating to the enrollment or attendance of you, your spouse or your dependent at an eligible college or university. While it is subject to phase-outs at higher income levels, the deduction can be as large as $4,000.

The classroom teacher credit. Are you a primary or secondary school teacher? If you were an educator who worked more than 900 hours on campus in 2009, you can claim an above-the-line deduction for up to $250 of personal expenses for schoolbooks and school supplies that see classroom use. You don’t even have to itemize.

COBRA continuation. Did you get laid off this year? Were you insured under an employer-sponsored health plan? Well, you may qualify for up to nine months of (COBRA) coverage. As for the company where you worked, it can claim a credit for the COBRA subsidy it extends to you.

$2,400 in unemployment income tax-free. That’s right: this year, the first $2,400 of federal unemployment compensation benefits you receive are excluded from gross income. 

An extra deduction for state and local property taxes. Do you usually claim the standard federal deduction? If that’s your plan, this year you can take an additional deduction for state and local property taxes. The ceiling is $500, $1,000 if you are filing jointly.

The capital gains tax break. If you are in the 10% or 15% tax bracket, note that the current tax rate for long-term capital gains is 0% – and it is slated to stay at 0% through 2010.

The homebuilder tax credit. Do you build homes? If so, you may claim a credit of up to $2,000 for each qualified energy-efficient home constructed and acquired from you for use as a residence. This credit is set to expire December 31, 2009; President Bush’s signature extended it into this year.

And of course, the exemption from required IRA distributions. The federal tax mandate requiring IRA owners age 70½ to take Required Minimum Distributions (RMDs) was suspended for 2009, but it will be reinstated for 2010. Worth noting: in 2010, anyone will be able to convert a traditional IRA into a Roth IRA.

This is just a sampling. There are other tax breaks out there during this unusual year for the federal tax code, and it is worth asking your accountant or advisor to do some research and/or collaborate to find you as many as possible.

IS THE REAL ESTATE DOWNTURN OVER?

 

Is the recovery imminent? Or already underway?

Signs point to a rebound. As this recession emerged, many economists felt that it would only fade away when the sector where it all began healed itself. It was in late 2006 when the U.S. real estate bubble began to pop, setting off a chain reaction of shocks that hurt homeowners, lenders, and the entire U.S. economy.

Three years later, we have new hope in the real estate sector – and the numbers to support it.

Existing home sales rose 7.2% in July. This was not only the largest monthly gain ever recorded, but the fourth consecutive monthly gain. As the National Association of Realtors noted, the last time residential resales increased for four straight months was in June 2004. Additionally, the number of existing home sales in July 2009 was greater than a year earlier – and that hasn’t happened since November 2005.

Existing home prices seem to be moving north. In late August, the S&P/Case-Shiller Home Price Index brought more good news. Prices in 18 of 20 major U.S. housing markets improved in June. On top of that, the Federal Housing Finance Agency’s home price index gained 0.5% in June, on the heels of a revised 0.6% May gain.²  

Wellesley College economics professor Karl E. Case (the Case in Case-Shiller) was delighted. “When I saw these numbers, I danced a jig,” he told the New York Times. “It appears that the housing market is stabilizing quicker than people thought it would.”

New home sales jumped an amazing 9.6% in July. Guess what: that was the fourth straight monthly increase. The Commerce Department put the seasonally adjusted annual sales rate at 433,000 – the strongest sales pace since September 2008. New home sales increased by an astonishing 16.2% in the South in July. When you lower prices enough, someone will buy.

Not only that, equilibrium is slowly being restored in terms of supply and demand. At the end of July, the Commerce Department estimated that 271,000 new homes were for sale in the U.S. – the smallest number since March 1993. At the end of June, there was an 8.5-month supply of new homes on the market; in January, there was a 12.4-month supply. So inventory is being cleared out. That would seem to warrant a revival in home construction.

The statistics on housing starts bear this out. Single-family housing starts increased for the fifth consecutive month in July.

Mortgage rates are still low. On August 27, interest rates on conventional 30-year fixed-rate mortgages were averaging 5.14%, according to Freddie Mac’s weekly nationwide survey. Contrast that with 2006-2007, when rates on a 30-year FRM averaged more than 6.3%.

The real leading indicators may be in real estate. David Berson, chief economist at California mortgage insurer PMI Group, has tracked real estate market recoveries in relation to the seven American recessions since 1960. He has concluded that all of these recoveries were characterized by – or driven by – gains in housing starts and home sales. On average, his findings indicate that residential resales start improving four months prior to the end of a recession. In the average recovery, single-family housing starts improved for seven months in a row, and new home sales improved for eight straight months.⁷

Here in late August, new and existing home sales have both increased for four straight months, and single-family housing starts have improved for the last five months.

As Zip Realty’s Patrick Lashinsky told Voice of America, “Affordability is at an all-time high. You have home prices that have dropped 25-30%. You have interest rates at very low amounts and you have consumers who have been waiting to buy. Combine that with the $8,000 tax credit you get if you’re a first-time buyer, and it’s creating a solid demand.” Here’s hoping that demand brings about a great and prompt economic recovery.

My Pride and Joy

Joy

For the parents….Ever get to the point when you stop and just think about your life?  The other day I was on Facebook, and a friend started chatting with me about how single life is like for him. He started telling me about the thrill of the chase with the ladies, the late night outings, and the freedom to do whatever and wherever….no restrictions.

I then start to reminisce my “single” days…how carefree my life was; then your mind starts to wonder…oh the joy 🙂  Then suddenly, a scream of my son yells “Dad!! where are you?”  In an instant, those thoughts went away as I ran upstairs to comfort an almost asleep 6-year-old. As I look into his sleeping face, it reminded me that I have joy…a different type of joy.  A different type of chase (Maybe around the house as we play around), a different type of late nights (Maybe a movie night that pushes sleep time to 11 pm), and the freedom to do things together whatever and wherever, as long as we are all together…yes that type of joy.

Yeah, I will admit that I do from time to time think about the “single” days. But, what I have now for me, gives me purpose and meaning.  The unselfishness that you have to give for someone who rely on you, truly outweighs any desire to be carefree… unrestricted….single. 

When I got back to chat with my friend, he finally admitted that he wants what I have…a family of his own. See, everyone wants a piece of something of what the others have. It’s human nature. It’s understanding what you want in life,  and appreciating what you have,  then making the best of it that create Joy.  For me, this picture tells it all…he is our life, he is our joy.

Autus Financial Group

 

 

This is my logo for my business.  Check out my website at www.autusfinancialgroup.com to learn more about the products and services that I offer.

I am an Independant Financial Advisor in California ; securities offered through my Broker/ Dealer Centaurus Financial, Inc.

I really like working with people that value professional advice. I love referrals from my clients, but I know that I need to earn it.  With the tough market landscape in 2008, it was more important than ever to let my clients know that I was there for them, and that they can reach out to me if they had concerns about their investments. 

I think that is so important when working with a Financial Advisor.  When I sit with a client initially, I really try to get to know what they want and what their goals are.  I try to engage conversations that get’s into the root of the concerns and try to provide a strategy to get them there.  I firmly believe that I am not in the transactional business, but more of a relationship business.

Hello world!

Continuing another chapter in my quest to immerse myself in this whole social media bandwagon. Welcome to my blog. I hope to share with you insights into my take on this thing called life. 

I am an Independant Financial Advisor by trade, so I will post a lot of industry related topics, and stories. I will try to mix it up with some personal experince, so you can get a feel of how I work with my clients.