What features do buyers value in a home?

What does one TRILLION dollars look like?

All this talk about "stimulus packages" and "bailouts"...

A billion dollars...

A hundred billion dollars...

Eight hundred billion dollars...

One TRILLION dollars...

What does that look like? I mean, these various numbers are tossed around like so many doggie treats, so I thought I'd take Google Sketchup out for a test drive and try to get a sense of what exactly a trillion dollars looks like.

We'll start with a $100 dollar bill. Currently the largest U.S. denomination in general circulation. Most everyone has seen them, slighty fewer have owned them. Guaranteed to make friends wherever they go.

A packet of one hundred $100 bills is less than 1/2" thick and contains $10,000. Fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.

While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet...

And $1 BILLION dollars... now we're really getting somewhere...

Next we'll look at ONE TRILLION dollars. This is that number we've been hearing so much about. What is a trillion dollars? Well, it's a million million. It's a thousand billion. It's a one followed by 12 zeros.

You ready for this?

It's pretty surprising.

Go ahead...

Scroll down...

Ladies and gentlemen... I give you $1 trillion dollars...

Notice those pallets are double stacked.
...and remember those are $100 bills.

So the next time you hear someone toss around the phrase "trillion dollars"... that's what they're talking about.

Americans in Poll Doubt Economy Rebound in Defiance of Forecasts

Source: Bloomberg
Despite the fact forecasters expect growth to accelerate, a new Bloomberg National Poll reveals that
Americans have their doubts about the strength of the nation’s economic recovery over the next year.
Close to half of poll respondents said they expect the economy to remain about the same and nearly 30 percent said it would weaken.

Read the full story
http://www.bloomberg.com/news/2013-09-25/americans-in-poll-doubt-economy-rebound-in-defiance-offorecasts.html

FHFA encouraging use of federal refinancing program

Source: The Hill
The Federal Housing Finance Agency (FHFA) is trying to spread the word about a federal refinancing program, the Home Affordable Refinance Program (HARP), as a way to encourage homeowners who are up to date on their payments but who owe more than their home is worth to contact a lender. At least 2.8 million homeowners have refinanced already through HARP.
Read the full story
http://thehill.com/blogs/on-the-money/1091-housing/323951-fhfa-encouraging-use-of-federalrefinancing-program

What would you pay first: your mortgage or credit card bill?

Source: The LA Times
A new study on consumer behavior found that financially-strapped Americans are now about as likely to fall behind on their credit cards as they are on their mortgage. During the recession, troubled borrowers were more likely to pay just credit card bills, but as a sign of an improving housing market, rising home prices create more equity in a home, which creates an incentive to keep making house payments.

Read the full story
http://www.latimes.com/business/money/la-fi-mo-credit-card-mortgages-20130918,0,479553.story

Want to Know Where Home Prices Are Headed? Read the Papers

Source: The Wall Street Journal
Research from a professor at the University of Michigan found that local housing-related newspaper
articles could be used to create indexes that accurately measured sentiment in 20 local housing markets.
Cindy Soo, assistant professor of finance, argues sentiment indexes can be used to track current housing trends not just nationally but also across regional markets.

Read the full story
http://blogs.wsj.com/economics/2013/09/24/want-to-know-where-home-prices-are-headed-read-thepapers/

Debt limit deadline is Oct. 17, Treasury secretary says

Financial markets will be disrupted, and the U.S. economy will suffer if Congress fails to raise the debt limit in order to avert a federal government shutdown. Treasury Secretary Jacob J. Lew has warned that the debt limit must be raised by October 17 because that is when the Treasury will run out of borrowing authority, and the country will face its first-ever federal government default. If that were to occur, business and consumer confidence is expected to take a hit.

Read the full story
http://www.latimes.com/business/money/la-fi-mo-debt-limit-lew-treasury-economy-20130925,0,1350942.story

Interest Rate Update
Interest rates have eased down a tiny bit over the last few weeks. Some “experts” say rates
could dip down again for a short period of time as Congress starts to deliberate about the debt
ceiling.
The Shutdown Continues
Really? I don’t care which party you follow or are affiliated with and it really doesn’t matter.
We elect these people to do a job and avoid things like this. So no more finger pointing or
grandstanding. I think the message we all need to send to Washington is enough bickering and
get the job done. Anyway, also in the negotiations is the looming debt ceiling which needs to
be raised again. The debt ceiling currently is at 16.7 Trillion. That is the total amount the U.S.
Government is authorized to borrow to meet its existing legal obligations. This amount needs
to go up to cover expected increases in needed borrowing. How much more has not been decided.
How Does This Affect You ?
These crazy numbers get thrown around all the time now. 88 Billion the Federal Reserve
spends monthly to help stimulate the economy. 16.7 Trillion for the debt ceiling. What the
heck does that look like. I found a quick illustration online (see attached) to help provide a visual of how much money we are really talking about.  It is scary how much money that really is.
30 Year Fixed up to $417,000  3.99% to 4.50%
30 Year Fixed “Agency” up to $625,500  4.125% to 4.625%
30 Year Fixed FHA up to $417,000  3.75% to 4.0%
30 Year Fixed FHA “Jumbo” up to $729,500  3.75% to 4.125%

U.S. Housing Recovery Seems Still on Track

Analysts are worried that the housing market may slow in the months ahead, but for now it continues to gain strength despite the drag of rising mortgage rates. The New York Times notes that “Higher home prices help the economy not just by strengthening the construction and real estate industries, but by making homeowners feel wealthier and more likely to spend,” thereby a key driver of the economic recovery.
Read the full story
http://www.nytimes.com/2013/09/25/business/economy/home-prices-still-rising-but-at-slowerpace.html?pagewanted=all&_r=0

The Effect of Fed Tapering on the Economy, the Housing Market, and

Amid raging speculation, last week the Federal Reserve ultimately decided against tapering due to
concerns about the impact on the country’s recovery, which means it will not reduce its stimulus for the U.S. economy (i.e. its $85 billion per month asset purchase program). By postponing the pullback, the housing market is expected to experience lower interest rates—much to the benefit of prospective buyers.
Rising mortgage rates and government spending cuts are two key factors the Fed cited in its decision.
Making sense of the story 

When tapering does occur, there are two potentially detrimental effects, namely higher mortgage
rates and increased costs to the federal budget. A strong economy is dependent on the housing
recovery, so if its progress is weakened, the impact will be felt in the economy as a whole.

Forbes expects tapering – when it takes place – to remain “highly accommodative” in that it will
not raise short-term interest rates right away.
Some estimates suggest tapering will begin in December since the economy will be performing
well during the peak of the holiday season.
Any hint at tapering thus far has led to a sharp response in the stock market, with shares rapidly
being sold. Investors are advised to plan for (and protect against) a sharp decline.
Forbes asks a few key questions about tapering: “The time will come when the Fed will begin to
reduce its asset purchases. How will this impact the financial markets? Perhaps more important,
have the financial markets become so accustomed to the Feds easy money policy that the
addiction is deeply ingrained? In other words, has the stock market consumed so much punch
that the withdrawals will be severe?
The Fed announced that it plans to keep its key short-term interest rate near zero at least until
unemployment falls to 6.5 percent, down from 7.3 percent last month.
Read the full story
http://www.forbes.com/sites/mikepatton/2013/09/19/the-effect-of-fed-tapering-on-the-economy-thehousing-market-and-stocks/

Short update on the effect the government shutdown will have on getting a home loan

Interest Rate Update
Interest rates have eased down a tiny bit over the last few weeks. Some “experts” say rates
could dip down again for a short period of time as Congress starts to deliberate about the debt
ceiling.
Government Shutdown
So here we go again with our wonderful elected officials bickering to the point that they have
now shutdown the government. Amazing how this could happen. Anyway, so how does this
situation affect getting a home loan? Not much is changing. The IRS will not be processing the
4506 Forms but most lenders can deal with that. The Social Security Administration will not be
processing the SS89 Form that verifies a person’s Social Security number but again lenders can
deal with that.
How Does This Affect You ?
Hopefully this shutdown will not last long. In the meantime lending should be pretty much the
same. We may see some temporary issues but there should be nothing serious. That being said
if this shutdown lasts longer then a few days we may all see some serious changes in everything. I would advise all of us to get on the phone and fire up your e-mails and get the message
to our elected officials that this is not acceptable. They were elected to do their job which is to
run the government and they are obviously failing.