Consumer Confidence Index Increases to Highest Level in Eight Months
RISMEDIA, May 27, 2009-The Conference Board Consumer Confidence Index, which had improved considerably in April, posted another large gain in May. The Index now stands at 54.9 (1985=100), up from 40.8 in April. The Present Situation Index increased to 28.9 from 25.5 last month. The Expectations Index rose to 72.3 from 51.0 in April. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS- one of the world’s largest custom research companies. The cutoff date for May’s preliminary results was May 19th.
Says Lynn Franco, Director of The Conference Board Consumer Research Center stated: “After two months of significant improvements, the Consumer Confidence Index is now at its highest level in eight months (Sept. 2008, 61.4).
Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first. Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us.”
Consumers’ overall assessment of current-day conditions improved again. Those claiming business conditions are “good” increased to 8.7% from 7.9%. However, those claiming conditions are “bad” increased to 45.3% from 44.9%. Consumers’ appraisal of the job market was also more favorable. Those claiming jobs are “hard to get” decreased to 44.7% from 46.6% in April, and those saying jobs are “plentiful” edged up to 5.7% from 4.9%.
Consumers’ short-term outlook improved significantly in May. Those expecting business conditions will improve over the next six months increased to 23.1% from 15.7%, while those anticipating conditions will worsen declined to 17.8% from 24.4% in April.
The employment outlook was also less pessimistic. The percentage of consumers expecting more jobs in the months ahead increased to 20.0% from 14.2%, while those anticipating fewer jobs decreased to 25.2% from 32.5%. The proportion of consumers anticipating an increase in their incomes edged up to 10.2% from 8.3%.
For more information, visit www.conference-board.org.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
For more real estate headlines on RISMedia.com, see:
Wednesday, May 27, 2009
Sunday, May 3, 2009
10 New Tax Breaks for Homeowners
Smart ways to lower Uncle Sam's bill
By Matt Woolsey
Forbes.com
Congress' inclusion of home energy incentives in the $787 billion stimulus plan it passed in February has a steady stream of customers heading to Manhattan's Green Depot, a nationwide chain that carries environmentally friendly and sustainable housewares such as LED light bulbs and cork flooring. Most popular? Solar products, says Brian Tereza, the store's general manager.
That could be because as part of the plan, buyers of solar water systems are eligible for a 30% tax credit for the initial purchase and installation cost. That's good news; systems often run between $6,000 and $10,000. The credit is available through 2016, a sizable window to cash in on the benefits of lower-cost energy, and is available to those who use the solar system to heat their home's water, not that of hot tubs or pools.
New Yorkers aren't the only ones seeking to take advantage of the billions earmarked for homeowners in the stimulus package and the Obama administration's $75 billion mortgage relief plan. The White House estimates as many as 9 million Americans could benefit from the loan modification plan alone. It calls for, among other things, monthly mortgage payments of no more than 31% of a qualifying homeowner's gross income.
There are also tax breaks for first-time home buyers and homeowners who make their properties more energy efficient. Add solar panels, geothermal heaters or energy-efficient doors and windows, for example, and Uncle Sam will kick back 30% of your costs to buy and install them. That's a huge improvement from 2007-08, when many green improvements such as windows and doors earned just a 10% credit.
"In some cases, the dollar amount the consumer can get back has tripled," says Ronnie Kweller, spokesperson for Alliance to Save Energy, a Washington, D.C., nonprofit environmental advocacy group. "Heating and cooling equipment are costly and this gives folks ability to plan and budget for those types of investments."
One caveat: If you're making your home more energy efficient, you'll need to file IRS form 5695, and, in some cases, furnish the IRS with a two-year product warranty.
On the mortgage front, the government is also empowering the Federal Housing Authority to insure more expensive loans by raising the conforming loan limit to $729,750. For those under that new umbrella, it means access to lower mortgage rates, because this insurance makes these loans less risky for banks to issue.
"The good news: approximately 98% of houses are now under the conforming loan limit," says Anthony Sanders, professor of finance at Arizona State University. "The bad news: negative equity is still a major problem, particularly in the Southwest and Florida."
In a normal market, homeowners with negative equity cannot refinance because banks would lose money on such a deal. But as part of its $75 billion mortgage relief program, the Obama administration will restructure loans even in cases where the homeowner has up to 105% debt on the value of the home. That means homeowners can reduce their payments thanks to government assistance. Banks benefit because it lessens the chance of foreclosure--in theory. Changing loans is a tricky business with a bad track record.
"Loan modification programs have existed for some time now, but have, in general, been failures," says Bob Walters, chief economist of Quicken Loans. "The government is trying to correct this by creating specific requirements and a more rigorous process behind loan modifications."
The remedy? Requiring that homeowners' loans are held by Freddie and Fannie and that buyers didn't get their original mortgages with no-documentation loans or misrepresent their income in the process. To deter flippers, annual bonuses will be doled out for up to five years for on-time payments, and there is an $8,000 first-time home buyer credit, which doesn't have to be paid back if the owner stays in their home for three years.
Some states have taken these steps even further as a way to inject cash into the housing market.
"You look at California and there's a $10,000 tax credit [for first-time home buyers]," says Pete Flint, chief executive of Trulia.com, an online real-estate listing company.
Still, some believe that such programs won't quickly turn the tide of the nation's housing woes.
"It's a welcome boost and it's a reason to consider a transaction otherwise," he says, "but it's not going to change the economic fundamentals."
Though a few hundred in tax credits here and a few thousand there certainly ease the pain.
By Matt Woolsey
Forbes.com
Congress' inclusion of home energy incentives in the $787 billion stimulus plan it passed in February has a steady stream of customers heading to Manhattan's Green Depot, a nationwide chain that carries environmentally friendly and sustainable housewares such as LED light bulbs and cork flooring. Most popular? Solar products, says Brian Tereza, the store's general manager.
That could be because as part of the plan, buyers of solar water systems are eligible for a 30% tax credit for the initial purchase and installation cost. That's good news; systems often run between $6,000 and $10,000. The credit is available through 2016, a sizable window to cash in on the benefits of lower-cost energy, and is available to those who use the solar system to heat their home's water, not that of hot tubs or pools.
New Yorkers aren't the only ones seeking to take advantage of the billions earmarked for homeowners in the stimulus package and the Obama administration's $75 billion mortgage relief plan. The White House estimates as many as 9 million Americans could benefit from the loan modification plan alone. It calls for, among other things, monthly mortgage payments of no more than 31% of a qualifying homeowner's gross income.
There are also tax breaks for first-time home buyers and homeowners who make their properties more energy efficient. Add solar panels, geothermal heaters or energy-efficient doors and windows, for example, and Uncle Sam will kick back 30% of your costs to buy and install them. That's a huge improvement from 2007-08, when many green improvements such as windows and doors earned just a 10% credit.
"In some cases, the dollar amount the consumer can get back has tripled," says Ronnie Kweller, spokesperson for Alliance to Save Energy, a Washington, D.C., nonprofit environmental advocacy group. "Heating and cooling equipment are costly and this gives folks ability to plan and budget for those types of investments."
One caveat: If you're making your home more energy efficient, you'll need to file IRS form 5695, and, in some cases, furnish the IRS with a two-year product warranty.
On the mortgage front, the government is also empowering the Federal Housing Authority to insure more expensive loans by raising the conforming loan limit to $729,750. For those under that new umbrella, it means access to lower mortgage rates, because this insurance makes these loans less risky for banks to issue.
"The good news: approximately 98% of houses are now under the conforming loan limit," says Anthony Sanders, professor of finance at Arizona State University. "The bad news: negative equity is still a major problem, particularly in the Southwest and Florida."
In a normal market, homeowners with negative equity cannot refinance because banks would lose money on such a deal. But as part of its $75 billion mortgage relief program, the Obama administration will restructure loans even in cases where the homeowner has up to 105% debt on the value of the home. That means homeowners can reduce their payments thanks to government assistance. Banks benefit because it lessens the chance of foreclosure--in theory. Changing loans is a tricky business with a bad track record.
"Loan modification programs have existed for some time now, but have, in general, been failures," says Bob Walters, chief economist of Quicken Loans. "The government is trying to correct this by creating specific requirements and a more rigorous process behind loan modifications."
The remedy? Requiring that homeowners' loans are held by Freddie and Fannie and that buyers didn't get their original mortgages with no-documentation loans or misrepresent their income in the process. To deter flippers, annual bonuses will be doled out for up to five years for on-time payments, and there is an $8,000 first-time home buyer credit, which doesn't have to be paid back if the owner stays in their home for three years.
Some states have taken these steps even further as a way to inject cash into the housing market.
"You look at California and there's a $10,000 tax credit [for first-time home buyers]," says Pete Flint, chief executive of Trulia.com, an online real-estate listing company.
Still, some believe that such programs won't quickly turn the tide of the nation's housing woes.
"It's a welcome boost and it's a reason to consider a transaction otherwise," he says, "but it's not going to change the economic fundamentals."
Though a few hundred in tax credits here and a few thousand there certainly ease the pain.
Subscribe to:
Posts (Atom)