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I have been under constant barrage of unsolicited phone calls recently. The phone calls typically begin with the same lie: "Mr. Shedlock you told a colleague of mine a few months ago to call you back when we have a really good investment opportunity". Given that I never ask anyone to call back, they are known liars from the start. Depending on what kind of mood I am in, I may hang up immediately or listen long enough to hear what kind of nonsense they are peddling. I asked one of the liars the name of his colleague that called....

The last time JPMorgan had an investor day, Jamie Dimon explained to Mike Mayo why he is richer than him (and pretty much anyone else). This year, Jamie will be more focused on explaining to 8,000 JPM workers why after firing 16,500 people in consumer and mortgage banking, the bank will now let go another 2K and 6K in those same two groups (which will bring total mortgage and consumer banking headcount reductions between 2013 and 2014 to at least 17K and 7.5K, respectively). This may be tricky especially in the context of, you know, the housing and economic...

Few taxpayers realize it, but some local Michigan assessment departments are taking liberties when they reassess the value of private property. Generally, the practice involves posting a public notice of "canvassing" and sending a worker — in some cases part-time college students — to knock on doors. If no one is home, the assessors measure the house and inspect the yard for structures they suspect are not listed on the assessment card. The only thing that will stop them is a "no trespassing" sign or a verbal rejection from citizens who answer the door. Assessors began this practice after the...

It hasn't been a good week for the housing market. Sales of previously owned homes fell 5.1% in January -- the fifth drop in the past six months -- to a seasonally adjusted annual rate of 4.62 million, the lowest level in a year and a half. New home construction fell 16% in January compared to December -- the biggest percentage drop in almost three years -- and permits slipped by more than 5%. Homebuilders reported a 10-point decline in their confidence index for February to 46 -- below the key 50-point level which separates a growing market from a...

<p>U.S. home resales fell more than expected in January and hit an 18 month-low as the combination of cold weather and a lack of housing stock sidelined potential buyers.</p> <p>The National Association of Realtors said on Friday home sales dropped 5.1 percent to an annual rate of 4.62 million units, the lowest level since July 2012. December's sales pace was unrevised at 4.87 million.</p>

Online mortgage company HSH.com recently estimated the salaries needed to afford a house in 25 metropolitan areas across the United States. Because, the cost of real estate varies across cities and regions — you need to be making about four times as much money in San Diego as in Cincinnati to afford a house. The map illustrates these differences. The wider the circle over a city, the more you need to make to afford a house there: CLICK ABOVE LINK FOR THE MAP AND TABLE

The cost of living in America varies wildly. In Cleveland, people need a base salary of at least $19,435 a year to afford the average home, while San Franciscans must make upward of $115,000 annually.HSH.com, an online mortgage and consumer loan information website, figured out how much a person would have to earn to afford a home in 25 of the country's largest metropolitan areas.To do so, HSH looked at the National Association of Realtors’ fourth-quarter data for median home prices and HSH.com’s fourth-quarter average interest rate for 30-year, fixed-rate mortgages to determine how much money homebuyers would need to...

A recent report from the Kent County Land Bank claims the agency's actions resulted in a $16.5 million economic impact in the community at a cost of $364,846. That would be an astonishing return on investment of 4,400 percent. If true, this would be great news for residents. Unfortunately, it is based on a simple analysis that in part is based on estimates and assumptions. That has not stopped the claim from receiving media attention. Land bank officials arrived at their claim by tallying the following: $2,996,783 in sales $225,974 in real estate commissions $367,331 in demolition and clean out...

More African-Americans are being squeezed out of the housing market. Not only are they less likely to apply for a mortgage than any other ethnic group, but African-Americans are also 2.4 times more likely to get denied a mortgage than Whites, a recent study conducted by Zillow and the National Urban League found.

Back in August, when we wrote that "A Stunning 60% Of All Home Purchases Are "Cash Only" - A 200% Jump In Five Years" based on Goldman data, many laughed, unable to fathom that the majority of the US housing market has become a flippers' game played by institutions and the uber wealthy, who don't need a stinking mortgage to buy that South Beach mansion. The implication of course being that housing is not effectively shut for that part of the population - the vast majority - that relies on credit to be able to purchase a home (a finding...

Building a 2,500-square-foot house in less than 20 hours? It sounds like a tall tale, but a professor at the University of Southern California says it is absolutely possible. He would toss out traditional building practices and replace them with a single 3D printer. It's called contour crafting, creator Behrokh Khoshnevis, the director of the manufacturing engineering graduate program USC, tells CBS News. "Construction the way its done today is very wasteful," he explained in a presentation at TEDxOjai. "Our solution benefits from advanced technology...it is essentially a way of streamlining the process of construction by benefiting from the experience...

PHILADELPHIA — Jerry Zeft was so excited to move into his new apartment that he slept on an air mattress for nearly a week while he waited for his bed and other belongings to catch up with him. No matter that he's 70 years old. Zeft had landed a coveted spot in a new affordable housing complex for lesbian, gay, bisexual and transgender seniors in the heart of downtown Philadelphia. Only two other U.S. cities have similar developments. "I wanted to get into a community that I'm more comfortable in," Zeft said shortly after picking up the keys to his...

Welfare spending in Britain has increased faster than almost any other country in Europe since 2000, new figures show. The cost of unemployment benefits, housing support and pensions as share of the economy has increased by more than a quarter over the past thirteen years – growing at a faster rate than in most of the developed world. Spending has gone up from 18.6 per cent of GDP to 23.7 per cent of GDP – an increase of 27 per cent, according to figures from the OECD, the club of most developed nations. By contrast, the average increase in welfare...

Why Build With Straw Bales? Straw bale construction lends itself well to an owner builder project. Some of the applications well suited for straw bale include: a cottage, office, garage, studio, and an art barn. You don’t have to limit yourself to these smaller projects. Thousands of people have successfully built their own straw bale house. As a world leader in straw bale education we want to help you every step of the way. I’ve created a great introductory video on why to build with straw bales. You can watch that by clicking the play button below. Please read on...

My first job out of college was working for a construction company in Detroit. “We’re an all-black company and I need a clean-cut white boy,” my boss told me over drinks in a downtown bar when he hired me. “Customers in the suburbs don’t want to hire a black man.” When a service call would come in, we would ask, “Does he sound white or black?” If it was the former, I would bid the job. If the latter, my boss would. Detroit is one of the most segregated metro areas in the nation, and for the first time I...

Katrina Victims Say Brad Pitt's Charity Homes Are Already Rotting By Heather Alexander, Houston Chronicle January 2, 2014 Actor Brad Pitt visits the Lower Ninth Ward of New Orleans during a trip to lobby government officials to increase the speed of re-construction on July 13, 2006 in New Orleans, Louisiana. Pitt and Global Green USA created a sustainable design architecture competition to showcase affordable, energy-efficient construction. Actor Brad Pitt visits the Lower Ninth Ward of New Orleans during a trip to lobby government officials to increase the speed of re-construction on July 13, 2006 in New Orleans, Louisiana. Pitt and...

I was perusing online stories about today's release of pending homes sales data from the National Association of Realtors. Here are a few sample headlines. NAR: Pending Home Sales Edge Up in NovemberCNBC: US pending home sales rise 0.2 percentCalculated Risk: Pending Home Sales Index increased 0.2% in NovemberForbes: Pending Home Sales Tick Up In November, First Time In Five MonthsReuters: U.S. pending home sales end slide, hint at stabilizationFox Business News: Pending Home Sales Rise Slightly, Miss Street View One Headline Title Stood Out Zero Hedge: Pending Home Sales Plunge At Fastest Pace Since April 2011 It took about...

What if you could assemble your house like Legos using free modeling software and a 3D printer? That’s the idea behind Eric Schimelpfening‘s WikiHouse – a home designed entirely in SketchUp that can be downloaded by anyone, customized to fit the user’s needs and sent to the 3D printer. The components are then snapped together using less than 100 screws to make rooms that can be rearranged as easily as you would rearrange furniture.The WikiHouse Open Source Construction Kit can be downloaded by anyone interested in building a house. What distinguishes it from the modular houses of the 1950s...

The Federal Reserve Open Market Committee meets on Tuesday and Wednesday of this week. To taper or not to taper, that is the question. Hamlet-to-be-or-not-to-be3 Let’s take a look at inflation thus far. Since 1947, there have been only three periods of deflation where the consumer price index (CPI) has fallen for consecutive months: 1949-1950, 1954-1955 and most recently, 2009. inflationcpi121413 Notice that inflation (as defined by year–over-year changes in the consumer price index) has been declining since September 1981 when inflation hit 11%. The latest measure of inflation is 0.9% YoY for October 2013. At the same time, house...

There are two pieces of mortgage application index news today. First, Mel Watt (D-NC) was confirmed by the U.S. Senate as the new FHFA Director by a vote of 57-41. Only two Vichy Republicans, Bob Portman (VR-OH) and Richard Burr (VR-NC) voted for the confirmation of Mel Watt, a person with no regulatory experience and an affordable housing hawk. Watt will now be the “regulator” for Fannie Mae and Freddie Mac, the mortgage giants in conservatorship with the FHFA. Why would President Obama nominate someone (and the Democrats confirm) with NO regulatory experience for perhaps the most important regulatory job...

According to the Congressional Budget Office, the top 40% of Americans paid 106.2% of income taxes. How can the top 40% pay MORE than 100% of income taxes? Simple. The bottom 40% of Americans paid -9.1% of income taxes. And they received an average of $18,950 in government transfers. Of course, we know that real median household income has been falling generally since 2000 and especially since 2007. And house prices have been falling, but house prices have changed course and have been rising since 2012. csrealinc Seriously, how can the US have a dynamic housing market with such a...

The Affordable Care Act (ACA), otherwise known as “Obamacare”, was created to give millions of uninsured Americans access to health care. But in their zeal to pass historic legislation, the designers and proponents of the law failed to consider the possible negative economic ramifications of the devilish details within the ACA, particularly as it may affect the real estate market. Within the last 12 years, we have already witnessed the strength that housing has upon the American economy. It is no coincidence that during the period from 2001 to 2006, both the real estate market and the general economy were...

“We are in the midst of the worst rental affordability crisis that this country has known,” said Shaun Donovan, U.S. Secretary of Housing and Urban Development. There are now 43 million renter households, or 35 percent of all U.S. households, the highest rate in more than a decade for all age groups, according to Harvard’s Joint Center for Housing Studies. That’s 4 million more renters today than there were in 2007. For those aged 25 to 54, rental rates are the highest since the center began record keeping in the early 1970s. Wait a minute. The Clinton Administration wanted to...

As Congress restarts conversations about the federal budget and deficit reduction, the immigration reform debate is still front and center for many. As that debate unfolds, it is important to put some hard facts on the table. What are the costs and benefits of reform? What impact will reform have on economic growth and wages? How will immigration reform affect the federal budget? A new study by the Bipartisan Policy Center Immigration Task Force found the evidence suggests that immigration reform can produce significant economic dividends for our country. -snip- A major finding of the study is that immigration reform...

There are cheers from the media about the latest jobs report. While some speculated that it was so good that The Fed would begin tapering their assets purchases, few noticed that the 10 year Treasury yield actually fell on the jobs report. But let’s look at the longer term picture. House prices are rising rapidly despite declining real median household income. Problem 1: Labor’s share of nonfarm business have been falling for decades, but it’s decline has been accelerating since 2000. laborsharelt No problem, many economists say. The U.S. has been moving towards a service economy for decades. But, …...

The CoreLogic National Foreclosure Report is out for October 2013. The good news! Foreclosure inventory in the U.S. fell 30.6% YoY in October. sersleinf120913 Florida leads the U.S. in foreclosure inventory as a percentage of mortgaged homes at 7.1%, followed by New Jersey at 6.7% and New York at 4.9%. clforecinvstate The lowest state in terms of foreclosure inventory? Wyoming at 0.4% followed by Alaska and Nebraska at 0.6%. If we compare judicial and non-judicial foreclosure states, we see a glaring difference. The worst states for percent of homes in foreclosure at judicial states (FLA, NJ, NY). The best states...

According to Nick Timiraos at the Wall Street Journal, Housing Agency (FHA) Will Reduce Mortgage-Loan Limits next month. The maximum for single-family homes in certain “high-cost” housing markets including Los Angeles, San Francisco and New York will fall to $625,500, from the current level of $729,750. This is an attempt to bring the FHA back in line with their original mission of supporting first time homebuyers, not the Brad Pitts of the world. Why does the Federal government insure mortgages in expensive cities that are far more costly than middle America? Ask your Congressman. Example. Honolulu leads the nation in...

While foreclosure activity as a whole has been declining in the U.S., there are still some unnerving aspects to the housing and mortgage recovery. So, it’s time for “The Good, The Bad and The Ugly.” The good. According to RealtyTac, overall U.S. foreclosure activity is down 23 percent year-to-date through October 2013. The bad. Foreclosure activity on properties in the $5 million-plus value range is up 61 percent from the same time period in 2012. And most of it is concentrated in Florida and Los Angeles. I designate Atlanta as an honorary coastal city since Georgia does have properties on...

The November jobs report is out from the Department of Labor and nonfarm payrolls rose more than expected. 203,000 jobs were added versus the expectation of 185,000. However, most jobs added were low paying jobs and holiday season related. The unemployment rate fell to 7.0% while the underemployment rate dropped to 13.2%. Labor force participation rate rose to 63.0% from 62.8%. WHERE were the jobs created? The biggest winners were low paying jobs related to the Holiday season for the most part: Food services and drinking places 17.9 General Merchandise Stores 13.8 Temporary Help Services 16.4 Home Health Care Services...

Trulia released its price and rent monitor today. In November, asking home prices rose 12.1 percent year-over-year (YoY), increasing in 98 of the 100 largest U.S. metro areas. Regaining a bit of steam since the slowdown began in July, asking prices rose 1.0 percent month-over-month (MoM) and 3.0 percent quarter-over-quarter (QoQ). In fact, the quarterly increase is the fastest in five months, though still lower than in the spring. The west coast along with Atlanta and … Detroit(?) are still growing in price at a rapid rate, but that rate is slowing down. askrpicertrulia Rents on the west coast are...

It appears that the Corker-Warner housing finance bill is still leading in the reform derby, despite its obvious problems and omissions (like protecting the property rights of current investors). Anyone remember the beating General Motors bond investors took in the government bailout of GM? Corker-Warner does little to fix any housing market problems that exist. And that is because housing legislation can’t cure what ails the economy: decreasing labor force participation and real median household income. Here is a chart of three economic indicators with clear downward momentum: civilian labor force participation (blue), the US homeownership rate (red) and real...

Bank of America has agreed to pay Freddie Mac $404 million in a mortgage settlement over 716,000 loans, many purchased from Countrywide. This is one of many lawsuits by the Federal government over Countrywide and related mortgages. One wonders when the litigation will end. Here is the thing. These suits are largely about representations and warranties between the loan seller and the loan purchaser concerning underwriting standards. The reps and warranties provide relief to the loan purchaser if the underwriting of the loans by the loan seller proves to be misleading or false. But there is another issue called causality....

Housing markets are booming again in parts of the U.S. and Britain and they haven’t stopped doing so in Canada for the better part of a generation. What is most striking about the latest round, at least when you listen to those who ought to know, is how nothing much except the price has changed. We were told a stern lesson in the months and years after the financial crisis, borne out of an over-inflated, over-leveraged U.S. housing market securitised up to the scalp by Wall Street and leaping ever higher up a steeper incline on a blind instinct never...

There is a lot of talk about a new housing bubble. If you look at a chart of house prices, you can see why. cs2009 This is a faster acceleration rate in house prices than during the much-discussed housing bubble of the last decade. csindices112613 Can it continue to accelerate? There are a couple of factors that say no. First, real median household income has been falling since 2000 and particularly since 2009. It is difficult to maintain price growth under these conditions once investors pull out. csrealinc Second, home ownership rates continue to fall …. along with real median...

The Senate will likely take up the confirmation of Mel Watt (D-NC) as Director of the Fannie Mae and Freddie Mac regulator, the Federal Housing Finance Agency (FHFA). Now that Harry Reid (D-NV) triggered the nuclear option allowing Democrats to use simple majority voting on most appointments, it is likely that Watt, who has no regulatory experience, will be confirmed as FHFA Director. What has Ed DeMarco accomplished as a regulator? Many things including, • Significant progress has been made on the development and initial testing of the Common Securitization Platform (CSP); however challenges, including necessary changes to Fannie Mae’s...

Government policies including the Fed monetary expansion have seemingly made matters worse for the average American family. Particularly since 2007. The GINI coefficent is a measure of income distribution in country. And it has been skyrocketing since 2007 when Democrats took control of Congress and 2009 when they achieved a majority in both the House and Senate AND the Presidency. But for all the talk of income redistribution and “leveling the playing field,” things have only gotten worse for the average American household. Here is the GINI coefficent for the USA since 2005. Note the decline from 2006 to 2007,...

FHFA has released the Fannie Mae and Freddie Mac conforming loan limits for 2014. The big winners? Hawaii! fanniefreddicll Second is Alaska (AK). Fortunately, there aren’t enough people in the Aleutians to cause taxpayers serious problems if the unemployment spikes and/or housing prices collapse. Third on the list are Guam, the Virgin Islands and … West Virginia. West Virginia?? California, Washington DC (Maryland, Virginia), Wall Street (New York, New Jersey), Carolina Coast vacation hub (Kitty Hawk) and Idaho. Somehow, I don’t think it is Napoleon Dynamite’s hometown that is among the costliest housing in the USA. Napoleon-Dynamite-napoleon-dynamite-117744_720_540 Once again, I...

Lender Processing Services (LPS) released its latest LPS Home Price Index (HPI) report, based on September 2013 residential real estate transactions.According to the report, U.S. Home Prices rose 0.2% in September, up 9.0% Year-Over-Year (YoY). LPS HPI – September 2013 The big winners? Nevada, Georgia and South Carolina. The big losers? NE “blue states”: Connecticut, New Hampshire and Massachusetts. lpshpisept13 On a metro level, Myrtle Beach SC, Charleston SC, Atlanta GA, Miami and Naples FL were the big winners. The big losers? Most of Connecticut and Springfield MA. bigmetro Hey, at least bankrupt Modesto CA is making a comeback! So...

According to the National Association of Realtors, pending home sales dropped 0.6% in October. The West led the decline with -4.1%. Year-over-year (YoY), pending home sales fell -2.2%, the lowest print since May 2011. Was it interest rate increases? Partly, at least in May and June. But since a recent high on August 22nd, the Freddie Mac 30 year mortgage commitment rate has been falling along with pending home sales. Rising house prices combined with declining real median household income isn’t helping home sales. And, of course, falling labor force participation isn’t helping, although house prices continue to rise in...

As many are painfully aware, the mortgage giants Fannie Mae and Freddie Mac collapsed in price from Q4 2007 to Q4 2008. Fannie Mae stock was trading at $60.81 on September 28, 2007 and fell to $1.71 by September 30, 2008. That is quite a drop. But Fannie Mae’s equity is now at $2.73 while Freddie Mac’s is at $2.52 per share. Both started showing signs of life in March 2013, spiked on May 28th, fell again, but has regained upward momentum since September. Who is in the running to purchase Fannie Mae and Freddie Mac and provide private market...

The recent confusion from The Fed over the future of quantitative easing (or money printing) can be addressed with a few charts. Here is a chart of real GDP growth PER CAPITA since 1960. Real, of course, indicates that it is Gross Domestic Product adjusted for inflation. Note that Q1 1984 was the peak of real GDP growth … and it has been a steady decline since then. realgdppercap I added the S&P 500 index to the real GDP per capita chart and you can see that the S&P 500 index spikes when real GDP growth is higher than average...

In mid-September, a CNN Money headline reassured investors: Our Long National Foreclosure Nightmare Is Over. Sounds great! Now we can finally relax and be glad that Henry Paulson, the Fed and the Big Bankers saved us from the apocalypse.Wait a second. Not so fast. Before you breathe a sigh of relief, why don't we take another good look at the real state of housing markets now. Let's examine some important charts, graphs and tables that the media does not cover. Inventory of Homes for Sale: What It Tells UsIn numerous articles over the last two years, I have emphasized the...

There is already fallout from Harry Reid (D-NV) and The Democrats use of the “nuclear option” to change confirmation hearings to a simple majority vote. Of course, this means that the Democrats can force horrible choices on America without the possibility of a filibuster. While most people have focused on the judicial appointments, one person in the housing finance arena stands to benefits: Mel Watt (D-NC). Watt would be a disastrous choice as Federal Housing Finance Agency (FHFA) Director. He has NO regulatory experience, did not know what Tier 1 capital was (the lack of which sank Fannie Mae and...

As Congress mulls over the “reform” of Fannie Mae, Freddie Mac and even the Federal Housing Administration (FHA), it is important to remember that these entities are INSURANCE COMPANIES that compete directly with private mortgage insurers like MGIC. So when we consider housing finance “reform,” consider the debacle from the recent “reform” of insurance: The Affordable Care Act. Please visit the Affordable Care Act (aka, Obamacare) at this site and try to enroll. Another similarity between housing finance reform and healthcare reform is that they are both focused on “affordable” delivery on housing finance and healthcare. The Corker-Warner Senate legislation...

Eminent domain to seize underwater mortgages is rearing its ugly head in New York. However, New York Attorney General Eric Schneiderman actually showed common sense by pointing out the dangers: “I am, just as a lawyer, uncomfortable with expansive use of eminent domain. I think [it] should be a vehicle of necessity, and it’s controversial whenever you use it… You have to be careful about balancing all the interests.” Well said, Mr. Schneiderman. emdomnj Eminent domain to seize underwater mortgages is a clear attack on mortgage investors, as I have discussed previously. But it seems to be gaining momentum, despite...

While economists mostly focus on real gross domestic product (GDP) growth, let’s look at nominal GDP growth for a change. If we go back to 1948 and President Harry Truman, you can see the number of times that nominal GDP growth (Year-over-year) exceeded 5%. nomgdpyoy And if we count the number of times nominal GDP equaled or exceeded 5%, we can see a pattern developing. Under President Obama, nominal GDP exceed 5% only once (5.2% for Q1 2012). The last President that experienced 5% or more nominal GDP growth was Ronald Reagan. gdpgt5 But even under the much-maligned President Jimmy...

The eminent domain steamroller is gaining momentum. Irvington NJ now joins Richmond CA in the effort to seize the mortgages of underwater borrowers and reduce their debt. Other cities are moving forward (or backward) in the eminent domain derby. Newark NY, Pomona and Oakland CA are moving forward. Other cities are considering studies to seize mortgages such are two in Pennsylvania and a cities in Minnesota, according to Robert Hockett, a Cornell University law professor and one of the architects of the strategy. He should be nicknamed “Hockett to ‘em”. robert_hockett-inside-small Who is the “‘em” that Hockett want to sock...

I attended an excellent panel discussion at the Heritage Foundation in Washington D.C. today on GSE (housing) reform. The speakers were Mark Calabria (Cato), Alex Pollock (AEI), Arnold Kling (former Freddie Mac employee) and Josh Rosner (Graham-Fisher). All speakers agreed that the government guarantee should be eliminated on residential mortgages. Essentially, the US over invests in housing to the detriment of other aspects of the economy. Sure, we got a bubble in house prices and homeownership, but we also neglected building factories and the rest of the economy (choosing instead to import goods from abroad). Here is the result of...

For years doctors have been focused on specific cholesterol numbers to help patients prevent initial and recurrent heart attack. New guidelines mean only those at high risk will be recommended to take the drugs. So how will doctors decide who is at high risk? More importantly what are physicians already saying about changes? Dr. Neil Stone of Northwestern University chaired the committee that wrote the new guidelines, which was a collaborative effort between the American Heart Association and the American College of Cardiology. No more statins to control cholesterol numbers say expertsInstead of looking at cholesterol numbers Stone said physicians...

Speaking at a Democratic fundraiser, held at a private residence in Dallas, Texas, President Obama stated, “we are remaking the courts.” The President’s statement is especially important, due to the fact that critics of the President have long accused him of attempting to change the American court system, in order to ensure his leftist agenda is deemed to be constitutional. The President, however, has denied doing this, until now... Continue reading at BeltwayExaminer.com