The Federal Reserve in Plain English

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today within its target range of 0.000-0.250 percent.  The Fed also reiterated its plan to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the economy may still be contracting, but that it's not happening with the same speed as in prior months.  Household spending is stabilizing and financial markets are "easing".

Nevertheless, threats to the recovery are everywhere with the following items on the Fed's short list:

• The growing ranks of unemployed workers
• The reduction of housing wealth nationally
• Reduced inventories and investment from business

Furthermore, the FOMC fingered today's inflation levels as too low to support economic growth.  This justifies the Fed's plan to hold the Fed Funds Rate near zero percent "for an extended period".

For home buyers and refinancing homeowners, today's press release was not favorable.

After the Fed's announcement, stock markets rallied on the idea that the worst of the economy really is over and that led to a broad bond market sell-off.  Mortgage rates spiked in response, adding as much as 0.125 percent, in some cases.

The FOMC's next scheduled meeting is June 23-24, 2009.

Source
Parsing the Fed Statement
The Wall Street Journal Online
April 29, 2009
https://online.wsj.com/public/resources/documents/info-fedparse0904.html

Is the Recession Over Already?

Image via Wikipedia

Image via Wikipedia

Though it took the Federal government a long time to determine that we were in a recession, it seems that they may have already decided that we've reached the end of it according to an article published on REALTOR.org

Fed Officials: The Worst is Over

The worst of the economic crisis is over,according to U.S. officials speaking at a financial conference Friday at Vanderbilt University.

Frank Nothaft, the chief economist for Freddie Mac, said housing sales have just about hit bottom and a third of home sales are now foreclosed properties.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that the declining commercial real estate market still poses a risk to the economy.

It would seem however, that though the housing market may recover , the lack of liquidity may still pose a problem for home buyers.

"It is worth emphasizing (that) actions that lead investors to shun taking risk, especially in this
environment, are ultimately detrimental to the ability of households and businesses to secure credit at reasonable borrowing rates," Dudley said.

So that still leaves the average buyer with the need to act, the desire to act, and benefits that accrue to the action.. if they can get a loan to buy the house.

Great Gadgets for Mother's Day or Father's Day!

After attending the International Home and Housewares show, The Today Show filmed a 5-minute segment called "Housewares You Won't Be Able To Live Without".

The title is somewhat over-the-top but don't let that turn you off. The gadgets reviewed are both practical and inexpensive. They include:

1. Make-no-mess vegetable peeler for the kitchen
2. Efficient kabob tool for the grill
3. Grow-In-Your-Kitchen garden that grows like an outdoor one

Of over 2,000 products at the show, NBC selected seven. Watch the video to see them in action.

Gadgets don't improve a home's value but they can make life easier sometimes. And for homeowners, easier is often better.

50% of the Foreclosures in the US are in 3 States!

Since 2007, foreclosures have dominated real estate news. You can't turn on the news or open a paper without some foreclosure-related story.

But for all of the discussion, foreclosures continue to be geographically concentrated.

Adding up the latest stats from RealtyTrac.com, more than half of the country's foreclosure actions from March occurred in just 3 states -- California, Florida and Nevada.

Those 3 states represent just 19 percent of the nation's population.

Despite the local concentration of foreclosures, however, they remain a national problem. This is because mortgage lenders lend in all 50 states -- not just 3 of them -- so the impact of mortgage defaults in one region can quickly spread to others.

In part because of foreclosures are higher, the following has happened:

• Mortgage guidelines have tightened
• Downpayment requirements have increased
• Private mortgage insurance has become more expensive

That's an important set of changes for a would-be borrower. In some cases, it can keep a person from qualifying.

Search the March 2009 foreclosure report for yourself on RealtyTrac.com's website.

Just Filing Your Taxes? Here's some Tips!

There are 138 million taxpayers in the United States and, according to the IRS, 20 percent of them file their taxes within 7 days of April 15. In a holiday-shortened week, that means that 27 million people had better get a move on.

And while a portion of this year's last-minute filers will file with storefront operations like Liberty Tax Service or H&R Block, many others will self-prepare with the help of tax software from TurboTax or TaxCut.

If you're a member of the do-it-yourself crowd, consider taking a review of this year's tax law changes before starting your returns. The stimulus package signed into law this past February made a profound impact on tax liability and the list of changes may be helpful for you.

A few of the new, allowable income tax deductions for 2008 include:

• Mortgage debt forgiveness in the event of a short sale


• An additional standard deduction on real estate taxes paid


• $8,000 tax credit for homes bought since January 1, 2009

TurboTax offers 4 tax filing choices online, ranging in price from $100 to free. If you're among the 27 million yet to file, choose whichever program fits best -- just choose it before April 15.

Filing could take several hours. Plan accordingly.