Tag: housing market

The Month End Rally

Posted by WFG – September 1, 2011

TSX – 12,768.70

Dow – 11,613.53

S&P – 1,218.89

Nasdaq – 2,579.46

The Month End Rally

  • A month end rally helped the market, pushing figures higher than expected. We predicted a 5% rise and it climbed to around 8%.
  • Defensive stocks traded higher. Though banks and industrials were hit hard.
  • Gold prices hit their highest rise, since 2009, in August. But announcements in the coming days may contribute to it slipping. These include the American job numbers. If they are good then many experts will choose stocks over gold.
  • Don’t trust the month end rally though, as the next week will bring difficulties. Most people are away on holiday and the summer ends this week.
  •  Odds are that the market will fall, though this will depend on a number of circumstances. Read the rest of this article

Some interesting charts and figures on US economy

Posted by winflowfinancial – June 21, 2011

I have just come across the following figures and charts which are quite interesting. These by no means represent our own opinions, but they provide some different ways of looking at the economy.

First on the employment rate, Boston Properties CEO Mort Zuckerman said that

“The Great American Job Machine is breaking down, and roadside assistance is not on the horizon.”

His reasoning is that the positive job numbers reported in recent months are not plausible because there are more part-time jobs added than full time jobs which means the total working capacity did not increase as much. Hiring, in general, has not increased.

And Zuckerman is not alone. New York Times’ Paul Krugman posted a employment-population ratio chart on his blog yesterday, that showed

What you see isn’t a recovering economy that may be stumbling; you see an economy that has stopped its free fall, but hasn’t really been recovering at all.

The May existing home sales data released today were also disappointing. Some blamed on the more restrictive lending policies that forced on the banks.

“Although low mortgage interest rates are welcome, they are less meaningful compared to the tightness of loan underwriting standards,” noted Lawrence Yun, NAR chief economist.

And that brings our attention to this chart on the debt level of US household, made by Richard Koo. According to this graph, US home owners will have to suffer at least 8 more years before a healthy mortgage market is restored.

 

Declining Home Equity in the US

Posted by Winflow – June 9, 2011

The amount of equity American’s own in their homes is at the lowest it has been since the Second World War. Relevant statistics include:

  • In 2001, American’s owned about 61 percent of the equity in their homes. Today Americans own 23 percent less equity in their homes.
  • House prices have reached their lowest level since 2002.
  • 25 percent of homeowners in the US owe more on their mortgage than their house is worth.
  • Another 25 percent are nearing the point where they have negative equity.
  • Household debt has declined two percent annually, showing American homeowners are more interested in paying off debt than growing the economy.
  • Spending by consumers makes up 70 percent of the economy.
  • Average household debt is down from US$125 000 in 2008 to US$119, 000 today.
  • Mortgage debt represents 72 percent of overall debt in a family.
  • Housing foreclosures continue to drive down prices.
  • Americans paying off their mortgages may not see any rise in home equity.

The housing market is expected to stay in decline until the country is fully lifted out of the recession. For all of the details, read this Globe and Mail article.

For more articles on the state of the economy, follow the links:

If your small business is struggling because of the recession, contact the Winflow Financial Group. Our consultants will work with you to make a personalized plan of action for your business.