PLANET HOME: Conscious Choices for Cleaning & Greening the World You Care About the Most
events - public events
When: Wednesday, January 26th 2011 10:30 am – 12 pm
Where: The Warehouse, 3434 SE Milwaukie Ave, Portland, OR 97202
PLANET HOME: Conscious Choices for Cleaning & Greening the World You Care About the Most
Alexandra Zissu, author of PLANET HOME, will be in Portland for this FREE special event to talk about ways to make conscious choices when cleaning your most cherished environment -- your home. All Portlanders are invited to join us for a chance to connect with your community and Alexandra for this informative and fun event. Enjoy complimentary food and beverages and an eco-friendly gift will be available for registered attendees. Please register as soon as possible using this link: http://planethomepdx.eventbrite.com/ Author and green living expert Alexandra Zissu offers comprehensive yet simple - and practical - green tips for any budget. Our everyday choices can have a tremendous impact - on the environment and our health. Did you know switching from hot to cold water when doing laundry saves 90% of the total energy cost, reduces indoor air pollution and is better for the clothes? Zissu suggests many easy changes and highlights common mistakes we all make. Newbies will learn to go greener faster and devotees will pick up insights and ideas to hone their eco-approach. Walk out inspired, empowered and with a heightened sense of how interconnected we all are in our shared planet home.Alexandra Zissu is a green living expert, environmental health journalist, eco consultant, speaker, mom and the author of The Conscious Kitchen and co-author of The Complete Organic Pregnancy and Planet Home.
REGISTER AT http://planethomepdx.eventbrite.com/
The Warehouse is located at 3434 SE Milwaukie Avenue, Portland, OR 97202.More info at http://www.portlandgreenparenting.com/

The Models are FOR SALE.....

We are so excited, our models are moving. We have started construction on two new buildings here at the Pass. We have 8 new condo's that are available in the new buildings. The buildings are in great locations and right by the pool and clubhouse. This is a great time to buy an Arbor Custom Home at Arbor Pass. The units are early enough in the construction stage, that you can pick out your options. The other exciting news is that we are moving our models to one of the new buildings. That means that the models are for sale. Whenever people come through, they always want to pick the same features that the model offers. Well here is your chance. Come in this weekend and view the models and see which one you like???? It is a great time to buy an Arbor Custom Home. The interest rates are still very low, and so are the price of our condos. I hope to see you this weekend, and Adam from Wells Fargo Home Mortgage, Arbor's preferred lender, would love to make an appointment to meet with you to see which plan would be a good fit. Don't forget about the Oregon Bond, Adam would be happy to see if you qualify for that. Happy home hunting.

NEW YEARS INCENTIVE FOR FIRST TIME HOME BUYERS!!!

Good news for first time home buyers. Oregon Bond has been able to approve funds to bring back its offering for 1st time home buyers. there are two options that buyers can take advantage of. The first one is Rate Advantage Home Loan: A qualified borrower will get the lowest fixed rate possible to maximize their home purchasing power. Rates, on this option are 3.875%. the second option is the Cash Advantage Home Loan: A borrower will get a low, fixed interest rate of their home loan along with cash assistance equal to 3% of their loan amount. The cash assistance will help to reduce the total cash they need to close the loan. Rates, on this option, are 4.25%. The buyer must meet certain qualifications, which are as follows: Buyer must be a 1st time home buyer, be an Oregonian, live in the residence, may not have been discharged from a bankruptcy within the past two years, prior to closing the loan. There are also income limits, as well as purchase price limits. There are eligible property restrictions. There may also be a recapture fee, if the buyer sell the house before a certain required time frame. This is just a jist of what the program restrictions are. Please come by Arbor Pass, and meet with either Krisiti, the managing agent at our site, or our preferred lender Wells Fargo, to get specific information regarding this exciting new First Time Home Buyers incentive. Great time to buy an Arbor Home....

What is the impact of raising interest rates when buying a home?

Buyers ask me daily, "have we hit bottom, as far as the price of homes?" I am not sure the answer to that, however I do know that the interest rate increase affects the buyer just as much as the price of a home. If you are one of those buyers that is waiting to see if we have hit bottom, be careful. You should be concerned about the monthly cost as well as the price. We all want the best value possible whenever you purchase something. However, when buying real estate, the best value is not determined by price alone. Value is determined by price and financing costs. You really need to take both into consideration when purchasing a home. Arbor Custom homes is partnered up with Wells Fargo Home Mortgage, and have an amazing team that keeps updated on all that is happening in lending. If you want to find out how the interest rates affect your decision come into the Arbor Pass sales office, and we can set up an appointment with our lender, Adam and show you options for your future home.

Time for Reflection!!!!

As 2010 comes to an end, it is always a good time to reflect. This year has been a very exciting, but challenging year for me professionally. It has been so wonderful coming to work for Arbor Custom Homes. I feel so fortunate, in this economy, to have had such an exciting opportunity. I love it!!!! I really enjoy the people I get to work with. Kristi, the sales office manager is awesome to work with. She loves being the property manager at Arbor Pass, and is so enthused to teach me everything she knows about the condo's. We have had such fun working with buyers and meeting potential buyers. The real estate market has been challenging, but the Arbor team works so well together to make our buyers excited about the buying process. I hope that 2012 brings peace, joy and health and happiness. Merry Christmas, and a Happy New Year.

Interested Rates have been going up. What are you waiting for?????

Interest rates are heading north for the holidays.......The interest rates have gone up about .5% this month. Its hard to say if they will come back down, or if we have hit our rock bottom? Do you realize how much this affects a buyer when the rates increase? With the rate increase just .5% this month, that has been a 5% loss in buying power. That means if you were qualified to buy a $200,00 home, you could now only afford a $190,000 home. So that means the buyer will be making the same mortgage payment on a home that is $10,000 less. The good new is that even with the rates increasing, they are still at record lows. In tracking rates over the last five Decembers, we are still the lowest that we have seen. In 2005 the rates were 6.27. So what are buyers waiting for? I think if you are ready to buy a home and waiting to see "what happens" you may miss the boat????? If you are serious about purchasing something you should speak with a lender as soon as possible to see what your options are? Arbor Pass is partnered up with Wells Fargo Home Mortgage, and I work personally with Adam Ansteth. He knows the neighborhood at Arbor Pass and he has proven time and again how good he is at his job. Even thought we are at the last few weeks of the year, this is a GREAT time to buys a new home. What a way to start 2011. Happy Holidays and Cheers to you.

Arbor Custom homes Oregonian Article

There was an interesting article in the Oregonian last week about Arbor Custom Homes. The article had an encouraging message from one of our owners Wally Remmers. He was speaking at a banquet to subcontractors and suppliers of Arbor's. Wally is confident of a continued rebound in the year ahead. It was exciting to see that Arbor Custom Homes is going to be building around 350 new homes in the coming year. He admits that times have been very challenging as one of the last standing local builders in the Portland area. Arbor has taken some opportunities that are not part our their "normal" business model. I also like what Wally said about the downturn in the market "has thinned out the industry to the real players" The Arbor Crossing neighborhood was specifically recognized as an opportunity for buyers to take advantage of the significant price erosion in the Portland housing market. The pass currently has condos priced in the $209,000 price range. If you have the opportunity to read the article in full it was in the business section December 3, 2010. The article was written by Jeff Manning.

Fun Portland Activities during the Holidays

There are so many fun things to do around Portland during the holidays. Some of these activities have been traditions that my family have continued over the years since I was a child. We always have a great time cutting down our Christmas tree. There are quite a few tree farms close to the Arbor Crossing and Arbor Pass neighborhoods. Some of the ones my family has gone to before are:
Helvetia Christmas Tree Farm: 12814 NW Bishop Rd. Hillsboro, Or 97124.
Andy's Tree Farm: 14713 NW Germantown Rd. Portland, Oregon 97231.
Parry's U Cut Tree Farm: 45627 NW David Hill Rd. Forest Grove, Oregon 97116.
Baggenstos Farm: 20200 NW Murphy Rd. North Plains, Oregon 97133.
Hagg's Tree Farm: 18265 SW McCormick Hill Rd. Hillsboro, Oregon 97123.
Besides the family outing cutting down our tree, we usually try to do something festive around town. Peacock Lane has always been a favorite, whether we walk down the street and enjoy a hot chocolate, or stay in the warm car and drive down the beautifully lit street. The Queen Anne Victorian Mansion is beautiful this time of year. The Portland Zoo also has a light festival that is fun for the whole family, and one of Portland's biggest celebration is the Festival of Lights at the Grotto. Take some time over the holidays to slow down and enjoy spending time with your family and try one of theses great places to spend a day. with the family. Happy Holidays to you and your family. From Arbor Pass and Arbor Crossing.

Newest member to Arbor Pass

My name is Kara DuLong, and I am the newest team member out at Arbor Pass/Arbor Crossing. I will be assisting Kristi and am so excited to be part of the Arbor Custom Home family. I have been with Arbor Custom Home since the end of summer, but have been permanently place here at Arbor Pass/Arbor Crossing. I have lived in the Portland area my entire life, and graduated college from the University of Oregon. I am married and have two children, they are both in elementary school. When I am not here at work, you can find me at one of my kids soccer, baseball, football, or basketball games....If you have a chance come by a say hello, I would love to meet you.

Arbor homes makes a difference

Arbor is continuing to make a difference! Not only is Arbor building strong in this down economy but they have also added many build techniques that make your brand new home more energy efficient which saves you money but also cuts down on environmental impact as well. Good for you..... good for the world! Arbor is now building to Earth Star advantage guidelines.
Watch this short video below to see all the things Arbor does above & beyond other builders!
This is why many Arbor home owners buy another Arbor when they move to the next step in their lives.... weather it's to move into a bigger home when starting a family or moving into a smaller home once the kids have gone. Arbor builds everything from the condos here at Quatama/Orenco/Tanasbourne area up to 4,000 sq ft homes up in the Hills of the Beathany area in NW Portland.

ARBOR WINS BUILDER OF THE YEAR

We are very proud to announce that Arbor Custom Homes has been selected as the recipient of the 2010 Home Builders Association of Metropolitan Portland’s “Builder Member of the Year” award. The HBA’s Nominating Committee evaluated several nominees based on criteria in four principal areas of service: Support of the industry, Leadership in the HBA, involvement in the HBA, and community involvement. The committee came to the conclusion that Arbor Custom Homes was most deserving of this year’s award.

Arbor will be recognized and presented this award at the HBA Builders Ball on Saturday evening November 20th. This kind of recognition is not possible without the leadership Wally and Dennis provide and all of the help from our team!

Congratulations!!

Orenco station homes

The Orenco station area in Hillsboro is one of the most desirable areas to live in. Besides the fantastic restaurants, local specialty shops, close to the MAX, & a great farmers market found in this little charming Orenco area it is also very affordable right now to live close by! Imagine you work at Intel like many of our home owners do, every morning when it's time to go to work all you have to do is get right on the MAX and be to work in less than 10 mins. Besides being convenient for getting to work everyday also imagine how great it would be to be able to take the MAX to Blazer games, or Timbers games, or even just to go downtown Portland and not have to worry about parking or being able to have a drink because you won't have to drive. Here at Arbor Pass & Arbor Crossing we not only have quality built homes with energy savings craftsmanship but also stunning finishes and the lifestyle you are looking for! We have brand new home starting at only $119,900 & we only have 3 that are move in ready right now!

HOMES NOW STARTING AT $119,900

Very exciting that these brand new condos are now starting at $119,900!

Stop by the sales office from 10-6pm weekends or 12-6pm weekdays for more information & to see some of our model homes!

Arbor Custom Homes gives back!

Arbor Custom homes builds a replica playhouse for charity. Click the link to read about it on OregonLive!

The Arbor Pass pool is open!

What a perfect weekend for swimming, lounging and just kicking back! Come live at Arbor Pass and enjoy the Arbor lifestyle!

Retail sales show surprising gain in February

Martin Crutsinger, AP Economics Writer, On Friday March 12, 2010, 4:30 pm EST
WASHINGTON (AP) -- Retail sales posted a surprising increase in February as consumers refused to let snowstorms stop them from stepping up purchases for everything from clothes to appliances. The improvement provided hope that the recovery from the Great Recession is gaining momentum.

Some economists cautioned that spending increases will remain modest as long as wages stay flat and job creation weak. But others said the fourth gain in retail sales in five months meant consumers are starting to spend with more confidence.

"This is more than a one-month wonder," said Stuart Hoffman, chief economist at PNC Financial in Pittsburgh. "This is telling us that consumers, who had been tightening their belts throughout the recession, have now loosened them a notch."

For February, sales rose 0.3 percent, the Commerce Department said Friday. That surpassed expectations of a 0.2 percent decline.

The overall gain was held back by a 2 percent decline in auto sales, partly reflecting the recall problems at Toyota. Weakness in autos also caused a downward revision in January retail sales. They were reduced to an increase of just 0.1 percent, down from the 0.5 percent originally reported.

But outside of autos, sales rose a strong 0.8 percent in February. That was far better than the 0.1 percent rise economists had expected. And for January, excluding autos, sales gained 0.5 percent, just slightly below the 0.6 percent initial estimate.

Some analysts expressed concern about whether the spending gains can be sustained, given that unemployment remains high -- 9.7 percent in February -- and consumer confidence shaky. A separate report Friday showed that consumer confidence dipped to 72.5 in early March, down slightly from a February reading of 73.5, according to a Reuters-University of Michigan survey.

"Weak jobs growth, low wages growth and tight credit mean that any further acceleration in consumption growth is unlikely," Paul Dales, an economist at Capital Economics, wrote in a research note.

Prospects would improve if businesses, which have shed 8.4 million jobs since the recession began in December 2007, start rehiring laid-off workers. That would give households the incomes they need to support spending growth.

Economists said spending in both January and February likely gained support from higher tax refunds and tax credits paid by the government during the current tax filing season. Those increases reflect some of the tax relief included in the $787 billion economic stimulus package Congress passed last year.

Some analysts said the February retail sales report made them more confident that consumer spending -- which accounts for 70 percent of total economic activity -- will be enough to support moderate economic growth this year of around 3 percent.

"We needed the consumer to step up because that is the biggest part of the economy," said Sal Guatieri, an economist at BMO Capital Markets. "This retail sales report should go a long way toward alleviating fears that we might slip back into a recession."

The overall economy, as measured by the gross domestic product, began growing again last summer. That indicated the recession had ended. GDP growth surged at a 5.9 percent annual rate in the October-December quarter. About two-thirds of that surge came from a rise in manufacturing to supply goods for businesses that had let their stockpiles dwindle.

Consumer spending actually slowed a bit in the fourth quarter: It grew at an annual rate of just 1.7 percent. But some analysts said that, based on the January and February retail sales, consumer spending could strengthen in the current quarter and support a GDP gain of around 3 percent this quarter.

The February retail sales report showed widespread improvement. Sales at general merchandise stores, the category that includes department stores and big discounters such as Wal-Mart Stores Inc., rose 1 percent after a 1.3 percent rise in January.

Sales at appliance stores were up 3.7 percent. Sales at hardware stores rose by 0.5 percent. Furniture sales gained 0.7 percent.

Restaurants and bars enjoyed a 0.9 percent advance, their biggest gain in nearly two years. It suggested that snowbound Americans headed out to eat to get a break from their homes.

Some analysts had suspected that the February retail sales report could offer a positive surprise, given encouraging news last week from the nation's big retail chains. The International Council of Shopping Centers had reported that sales jumped 3.7 percent in February compared with a year ago. That marked the third straight increase and showed broad strength across all corners of retailing, indicating that consumers are starting to crawl back to where they had typically shopped before the Great Recession.

Shoppers shrugged off snowstorms to visit an array of merchants, from luxury retailer Nordstrom Inc. to middlebrow Macy's Inc. to discounter Target Corp. All three chains reported solid sales increases that beat analysts expectations. Another encouraging sign the reports showed was that shoppers are becoming more willing to pay full price, instead of focusing only on deeply discounted items.

During the height of the recession, shoppers, nervous about their evaporating stock portfolios and their jobs, had fled to discounters and cheaper brands. But even though extreme frugality is starting to thaw, shoppers remain cautious.

Zain Raj, global practice leader of Euro RSCG's retail brands division, noted that customers are starting to return to some of their brands and stores, but not for everything.

"Customers are picking and choosing where they're trading up," he said.

In a separate report, Commerce said business inventories were basically unchanged in January. Total business sales rose 0.6 percent, the eighth straight monthly increase.

AP Retail Writer Anne D'Innocenzio in New York contributed to this report.

U.S. Economy: Growth Jumps 5.7%, Fastest Pace in Six Years

By Timothy R. Homan

Jan. 29 (Bloomberg) -- The U.S. economy expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines, indicating the recovery may be strong enough to be weaned from government support.

The dollar rallied as the data signaled the momentum generated by the world’s largest economy last quarter will carry into the new year. Rising investment in equipment and software is boosting sales at companies including Intel Corp. and may help bring the jobless rate down from close to a 26-year high as employers add staff to meet demand.

“We are getting on to something that is pretty sustainable,” said Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York, who correctly forecast the gain in GDP. “Both consumers and businesses are beginning to increase spending. To get validation, we need to see a return in hiring, which we think we are going to get over the next few months.”

Consumer spending, which comprises about 70 percent of the economy, rose at a 2 percent pace following a 2.8 percent increase in the previous three months. Economists projected a 1.8 percent gain, according to the survey median. Efforts to rebuild depleted inventories contributed 3.4 percentage points to GDP, the most in two decades.

The dollar strengthened 0.7 percent to $1.3867 per euro. The Standard & Poor’s 500 Index fell 0.2 percent to 1,082.33 at 12:10 p.m. in New York after gaining as much as 1.1 percent.

For all of 2009, the economy shrank 2.4 percent, the worst single-year performance since 1946. Household purchases dropped 0.6 percent last year, the biggest decrease since 1974.

Intel, the world’s largest chipmaker, posted its biggest quarterly revenue in more than a year last quarter, a sign the computer industry has emerged from last year’s global recession.

“My expectation for 2010 is that we’re going to see robust unit growth,” Chief Financial Officer Stacy Smith said in an interview this month. “The consumer segments of the market will stay pretty strong, and I do believe we’re going to see a resurgence in PC client sales.”

Purchases of equipment and software increased at a 13 percent pace in the fourth quarter, the most since 2006, today’s Commerce Department report showed. The gain helped offset a 15 percent drop in commercial construction, leaving total business investment up 2.9 percent over the past three months.

White House economic adviser Christina Romer said today’s GDP report is “the most positive news to date” on the economy.

Romer, chairman of President Barack Obama’s Council of Economic Advisers, said that while economic growth is a “necessary first step for job growth” the government’s “focus must remain on getting Americans back to work.”

Obama this week said job creation will be the “number one focus in 2010.” Speaking during his first State of the Union address, Obama called on Congress to deliver a new jobs bill to his desk.

Payrolls fell by 85,000 last month after a 4,000 gain in November that was the first increase in almost two years. The U.S. has lost 7.2 million jobs since the start of the recession in December 2007, the most of any slowdown in the post-World War II era. The jobless rate held at 10 percent in December.

The Federal Reserve this week repeated a pledge to keep interest rates low for “an extended period” to bring down unemployment while also raising its assessment of the economy and repeating a decision to end purchases of $1.25 trillion of mortgage debt by March 31. Policy makers said business investment “appears to be picking up.”

Fed Chairman Ben S. Bernanke was confirmed for a second four-year term yesterday by the Senate with record opposition as some lawmakers criticized the central bank for doing more to help Wall Street than average Americans.

A Labor Department report today showed wages and benefits rose 0.5 percent in the fourth quarter, capping their smallest annual increase on record.

Gains in production last quarter stemmed the slide in inventories. Stockpiles dropped at a $33.5 billion annual pace following a $139.2 billion decline the previous three months. Inventories declined at a record $160.2 billion pace in the second quarter.



Business Barometer



The expansion is carrying into the new year, a report from the Institute for Supply Management-Chicago Inc. indicated today. The group said its business barometer climbed to 61.5, the highest level since November 2005, from 58.7 last month. Readings greater than 50 signal expansion.

A gauge of consumer confidence climbed in January to the highest level in two years. The Reuters/University of Michigan final index of consumer sentiment rose to 74.4 from December’s 72.5.

In other areas of the economy, today’s GDP report showed a smaller trade gap contributed 0.5 percentage point to fourth- quarter growth, while government spending was little changed, dropping at a 0.2 percent pace.

Residential construction climbed at a 5.7 percent rate last quarter after expanding at a 19 percent pace in the previous three months.

Inflation held below the Fed’s long-term forecast. The central bank’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, rose at a 1.4 percent annual pace following a 1.2 percent increase in the prior quarter.

The GDP price gauge climbed at a 0.6 percent pace, less than the 1.3 percent median forecast of economists surveyed.

Today’s GDP report is the first for the quarter and will be revised in February and March as more information becomes available.

Ten Cities To Go From Renting To Buying

The U.S. government has pushed hard to make homeowners out of one-third of Americans who still rent their homes. It introduced and later extended a tax credit for first-time home buyers, and has kept federal interest rates at their lowest levels since the 1940s.

Market conditions are such that now is a particularly good time for some renters to take the hint.

In Portland, San Francisco, Minneapolis and Washington, D.C., the premium to buy--the spread between what you'd spend on renting and what you'd pay each month for a mortgage--is far narrower now than its 15-year average. And economists predict a significant home-price hike in five years. So upgrading will cost much less than usual, and home buyers are likely to get a good return on their investment.

Note that buying isn't necessarily cheaper than renting in these metro areas. In fact, it often remains a more expensive proposition. But for those determined to own, that investment is a better one now than it normally is.

Take San Francisco. To live here has always required a hefty bump in monthly costs from renting; it's normally an incredible 296% more expensive to buy than lease a home, and the city's residents know this. That's why 42% of them stick to renting. Even though in the third quarter of 2009 the premium was still in the triple digits--233%--it had shrunk by 63 percentage points from the above 15-year average. As with the other cities we've highlighted, you're not getting nearly as good a deal by renting as you might have just a few years ago.

"Rents are falling, but not nearly as rapidly as home prices," says Ron Witten, founder of Dallas-based Witten Advisors, an apartment market consulting firm. "Part of the reason is a shift away from home ownership toward renting," he says, in part because mortgages have become harder for many to obtain.

To find cities where it's a good time to go from renting to buying, we used data from Witten Advisors, which calculated the premium to buy for 42 Metropolitan Statistical Areas across the country using data from the U.S. Census, the National Association of Realtors and a blended average of fixed- and adjustable-rate mortgages from the Federal Housing Finance Agency (which oversees and regulates lenders). We compared the premium in the third quarter of 2009 with the average premium over the last 15 years to find the biggest drops.

We also wanted to pinpoint markets where home buying is a smart investment, so we factored in the five-year forecast in the S&P/Case-Shiller Home Price Index from Moody's ( MCO - news - people )Economy.com. The cities on our list have some of the biggest discounts on the premium to buy coupled with big projected increases in home prices over the next five years.

One major market we didn't look at is New York City, another spot where rents have softened less than home prices. Witten Advisors doesn't track the metro area because accurate historical data on rental costs there is exceedingly difficult to obtain.

Portland, Ore., makes our list for much the same reason that San Francisco does: It's a picturesque, culture-driven city with good local services and amenities. The city is still not particularly cheap for buyers--but it's cheaper than normal.

Visit The Forbes.com Digg ChannelA family hoping to put down roots there would normally pay a 62% premium to go from renting to buying. In the third quarter of 2009, however, that premium shrank by 16 percentage points. At the same time, Moody's Economy.com anticipates that home prices will jump 19% over the next five years. That's partly because, like San Francisco, Portland has strict government limitations on building and a coastal location that keep sprawl in check.

"Portland has one of the most controlled environments in the country in terms of development rights," says Stuart Gabriel, director of the Ziman Center for Real Estate at the UCLA Anderson School of Management. "Those supply constraints will push prices up."

Jobs Stability
The presence of jobs--along with strong industries that will keep generating new ones--is a big factor in keeping demand for homes, and therefore home prices, high. The weak national economy has helped reduce the premium to buy for the time being, but where the labor market is relatively healthy, home prices are predicted to shoot up.

In Minneapolis, for example, where large companies including Target ( TGT - news - people ) and General Mills ( GIS - news - people ) have their corporate headquarters (and there's a large university system), home buyers will only pay 14% more than if they were renting (24 percentage points lower than average), and home prices should climb by 15% in five years.

Similarly, in Washington, D.C., government jobs are plentiful, and anticipated to stay that way. The 6.1% unemployment rate here is well below the national average, which is partly why Moody's anticipates a five-year jump in home prices of 15%. And, at the moment, the premium to buy is 20 percentage points lower than its usual 57%.

Of course, whether buying or renting is best is ultimately an individual choice, and one driven by a lot more than map coordinates. When subprime lending was rampant, many without the means to buy were encouraged to do so anyway--and it's no secret how that turned out.

"If there's anything we should have learned from this housing cycle, it's that the decision to buy or rent ought to be a personal lifestyle decision," says Witten. "In part, it's a question about, 'Do I want to be a homeowner' in general, and specifically, 'Do I want to be a homeowner now, with this economic uncertainty?'"

Francesca Levy, 01.21.10, 04:50 PM EST

Stocks strengthen on Fed's economic assessment

By Tim Paradis, AP Business Writers , On Wednesday January 27, 2010, 3:40 pm
NEW YORK (AP) -- The stock market turned higher Wednesday after the Federal Reserve issued a more upbeat assessment of the economy.

Major stock indexes had fallen before the Fed released its statement following a two-day meeting on interest rates, then advanced as investors digested the central bank's statement. Treasury prices reversed direction and fell after the statement as investors withdrew money from safe haven holdings.

The Fed said it believes that "economic activity has continued to strengthen" since its last meeting in December. However, the Fed did not repeat its assertion that the housing market is improving.

The Fed said it is leaving interest rates near zero, as expected, but also that Kansas City Federal Reserve President Thomas Hoenig has voted against the decision to keep rates low.

Jamie Cox of Harris Financial Group in Colonial Heights, Va., said Hoenig's vote signals the central bank is moving closer to boosting rates.

"That means there are a couple of people who feel like that the economy is getting better at a nice rate that no longer warrants these exceptionally low rates," he said.

Stocks had fallen ahead of the report as a 7.6 percent drop in sales of new homes in December brought concerns about the economy.

In late afternoon trading, the Dow Jones industrial average rose 44.14, or 0.4 percent, to 10,238.43. It had been down 40 ahead of the Fed's announcement.

The Standard & Poor's 500 index rose 5.43, or 0.5 percent, to 1,097.60, while the Nasdaq composite index rose 17.00, or 0.8 percent, to 2,220.73.

Stocks had closed lower five of the past seven days.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.64 percent from 3.63 percent late Tuesday.

The dollar rose against most other major currencies, while gold fell.

Scott Marcouiller, senior equity market strategist Wells Fargo Advisors in St. Louis, said the Fed's statement that it is slowing its purchase of mortgage-backed securities suggests the central bank believes the U.S. housing market is improving.

The Fed said it expects to complete the purchase of $1.25 trillion in agency mortgage-backed securities and about $175 billion in agency debt by the end of the first quarter.

"Once we settle in here, the market will like this," he added. "This (statement) tells me that they're comfortable with how the economy is progressing, even though they didn't come right out and say that."

Reassurance from the Fed couldn't erase all of investors' worries about the economy. Caterpillar Inc. hurt the Dow industrials after the equipment maker issued a cautious forecast. The stock fell $3.54, or 6.3 percent, to $52.31.

Technology stocks got a boost from Apple Inc. after the company announced a tablet-style computer that looks like a large iPhone. The stock rose $3.05, or 1.5 percent, to $208.99.

The Fed's announcement was the latest event in Washington to command investors' attention.

Treasury Secretary Timothy Geithner defended the government's rescue last year of insurance giant American International Group Inc. in hearings on Capitol Hill. Analysts said the sometimes heated exchanges between Geithner and members of the House Committee on Oversight and Government Reform underscored concerns that Washington would be more assertive in its dealings with Wall Street.

Geithner oversaw the bailout as head of the Federal Reserve Bank of New York. Former Treasury Secretary Henry Paulson also testified.

Traders are also waiting to see whether Fed chairman Ben Bernanke, whose term ends Sunday, will win Senate approval for a second, four-year term.

The hearings came after President Barack Obama said last week that he would seek to limit trading by major financial institutions. That drew concerns from investors that bank profits would suffer.

Investors also will be looking to Obama's State of the Union speech Wednesday evening for clues about his plans to tighten restrictions on banks.

In other trading, crude oil fell $1.48 to $73.23 per barrel on the New York Mercantile Exchange.

Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 978.8 million shares.

The Russell 2000 index of smaller companies rose 3.97, or 0.7 percent, to 616.13.

Overseas markets fell for a second straight day on concerns about China's move to curb bank lending. The country is trying to prevent speculative bubbles and rapid inflation as its economy continues to grow quickly. A slowdown in growth in China could stunt a global economic recovery.

Japan's Nikkei stock average fell 0.7 percent and Hong Kong's Hang Seng lost 0.4 percent.

Britain's FTSE 100 fell 1.1 percent, Germany's DAX index lost 0.5 percent, and France's CAC-40 dropped 1.2 percent.

Liberty High senior follows in brother's footsteps with success in Intel Science Talent Search

You may ask why I have an article of a 12 grade student from Liberty High in Hillsboro. It is because Liberty High is our High School here at Arbor Pass. See how Alex McCarthy is making Liberty High proud.

By Wendy Owen, The Oregonian
January 21, 2010, 5:30PM
View full sizeTORSTEN KJELLSTRAND/The Oregonian Alex McCarthy, 18, is a semi-finalist in the national Intel Science Talent Search for his project involving solar energy, which brought him and Liberty High School $1,000. He often uses the balcony in his family's one-bedroom loft in Hillsboro for his other science projects, recently including a 7-foot construction crane that broke as he attempted to lift a slipper. HILLSBORO -- It's not uncommon for Alex McCarthy's parents to find pulleys, ropes and, occasionally, a crane dangling from the balcony circling their living room.

Eighteen-year-old Alex is driven by an insatiable curiosity about how things work. As a result, the Liberty High School senior recently was named one of five semifinalists from Oregon in the prestigious Intel Science Talent Search.

While Alex's feat is admirable in itself, he isn't the only one in his family to be ranked nationally as a young scientist.

His older brother, Brian, placed third in the nation in the 2008 Intel Science Talent Search, winning $50,000 for his work involving solar energy.

Such accomplishments might be expected in a family of engineers or chemists, but their parents are not scientists.

Their father, Brian McCarthy, is a chef specializing in vegetarian meals for Bon Appetit, which contracts with Intel. Their mother, Karen McCarthy, is finishing a bachelor's of science degree in child and family studies at Portland State University. She also works in the home department at Fred Meyer.

Low-key and humble, like their sons, the couple says they made a point of letting their boys explore what interested them. "As long as it was safe," Brian McCarthy said.

That interest was usually scientific. As youngsters, the brothers built dams and bridges in a mud hole in their backyard. Over the holidays, they launched Lego airplanes across the living room balcony from a catapult rigged with weights.

Asked what sparked his interest in science, Alex thought for a moment and said, "Legos, I would say."

In between bouts of building, they played strategic board games. Their parents kept them away from video games and social networking sites, such as Facebook. Encouraged them to read, instead.

"The family goes a long way in encouraging that desire to learn," said Milt Scholl, who teaches science and math at Liberty High School. He taught both boys and coaches Alex on the school's new robotics team as well as their Science Olympiad team.

Eventually, Alex's inquisitiveness pushed him to follow his brother in investigating solar energy. Organic solar cells are less expensive to create than the silicone cells now used, but they're not efficient, because they leak electrons generated by sunlight.

Alex determined that a layer of some type of compound might keep the electrons from leaking -- making solar energy more affordable.

He patiently drew a picture to explain the complicated project and noted that, so far, he hasn't found the right compound. But, he said, "These things don't ever really end."

Despite the work-in-progress, the Hillsboro teen's research placed him among 300 Intel Science Talent Search semifinalists from across the country. The number will be whittled to 40 finalists on Wednesday.

Those winners will receive a free week-long trip to Washington, D.C., in March to attend the Intel Science Talent Institute, which concludes with the naming of the top 10 scholarship winners and prizes ranging from $7,500 to $100,000.

The brothers developed their interest in solar energy through the Apprenticeships in Science and Engineering program, where they worked alongside graduate students in a chemistry laboratory at Portland State University. During different summers, each boy developed his own project to enhance solar cells.

"They were both extraordinary scientists: hard-working, creative and insightful," said Carl Wamser, chemistry professor at Portland State University.

Brian, 20, who is majoring in chemistry at the Massachusetts Institute of Technology, says his little brother has a passion for science, especially engineering.

"He seems to have this intuition for it. Even though I was two years older ... I could never do what he could with building," Brian said.

At Liberty High School, Milt Scholl described Alex, whom he's taught for four years, as very methodical in his approach to science. "It's a persistent intelligence," said Scholl, a former college professor. "That way of thinking gets him through everything."

Alex is considering mechanical engineering as his future. He plans to join his brother at MIT in the fall.

Brian has continued researching solar energy as a sophomore at MIT. Asked if he planned to partner with his younger brother to create the perfect organic solar cell, he said his research has moved away from solar cells, but he would entertain teaming up with is "best friend."

"I think we would make a good team, whether or not he would be interested I don't know."

Federal Housing Administration to raise fees

Federal Housing Administration hikes fees, tightens standards for home loans


By Alan Zibel, AP Real Estate Writer , On Tuesday January 19, 2010, 8:48 pm EST
WASHINGTON (AP) -- The Federal Housing Administration is raising fees and tightening lending standards to shore up its strapped finances and avoid a taxpayer bailout.
The government agency has seen its losses rise with the foreclosure rate. Its reserves have sunk below the minimum level required by Congress. A healthy FHA is vital for the housing market because it insures roughly 30 percent of new loans, and is the largest backer of mortgages to first-time buyers.
The changes, which will go into effect in the first half of the year, "are among the most significant steps to address risk in the agency's history," FHA Commissioner David Stevens said in a prepared statement.
The FHA does not make loans, but rather offers insurance against default. Borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price -- and that didn't change.
The new policies, to be announced Wednesday, are designed to bring more revenue into the agency, while at the same time keeping loans available.
Under the changes, homebuyers will:
--Pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount, up from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500. Borrowers will still be able to wrap these fees into the total amount borrowed. FHA officials also plan to ask Congress to increase the maximum annual premium that FHA can charge.
--Need a credit score of at least 580 to qualify. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.
The changes come as borrowers with loans backed by the agency have increasingly been falling into default. More than 18 percent of FHA borrowers are at least one payment behind or in foreclosure, compared with 14 percent for all loans, according to the Mortgage Bankers Association.
Mortgage lenders "will find the new rules painful but necessary," said Howard Glaser, a mortgage industry consultant and former housing official during the Clinton administration.
There also have been fears that unscrupulous operators have shifted their business to the FHA after the subprime business went bust. Last week, the agency served subpoenas on 15 mortgage companies with suspiciously high default rates for FHA loans, part of a broad crackdown on dubious lenders.
The agency has already taken action against several problem lenders. One of the nation's biggest mortgage bankers, Taylor, Bean & Whitaker Mortgage Co. of Ocala, Fla., was banned from the FHA program in August and filed for Chapter 11 bankruptcy protection. Another mortgage company, Lend America, was kicked out in November.

Intel 4Q profit climbs as PC market turns around

Intel 4th-quarter profit balloons as the personal computer market rebounds

By Jessica Mintz, AP Technology Writer , On Thursday January 14, 2010, 4:57 pm
Intel Corp. said Thursday its fourth-quarter profit ballooned as a strong rebound in the personal computer market overcame a hefty payment Intel made to its biggest rival.
Intel also said its revenue and profit margin in the current quarter could be better than what analysts are expecting, and its shares rose in extended trading.
Computer shipments grew more sharply than expected in the fourth quarter, and Intel supplies the vast majority of PC microprocessors. That helped Intel generate net income of $2.3 billion, or 40 cents per share. That was more than nine times as much as it earned in the year-ago quarter, when profit totaled $234 million, or 4 cents per share.
Sales climbed 29 percent to $10.6 billion.
Analysts expected a profit of 30 cents per share and $10.2 billion in revenue, according to Thomson Reuters.
Intel shares, which gained 2.5 percent to close regular trading Thursday at $21.48, rose 1.8 percent in extended trading to $21.87.
Intel is the first major technology company to report its results for the fourth quarter. The company is seen as a barometer for the PC market and technology spending in general.
"We're predicting that 2010 is a year of robust unit growth. I think it's continued strength in the consumer segment," said Stacy Smith, Intel's chief financial officer, in an interview.
Smith said Intel had not yet seen signs that big companies are replacing old PCs, but that he expects it to happen this year.
Intel issued an optimistic sign by saying that in the current quarter, it expects revenue from $9.3 billion to $10.1 billion, and a gross profit margin of 59 percent to 63 percent.
Analysts had been predicting first-quarter revenue of $9.3 billion and a gross margin of 59 percent.
In the last quarter, Intel paid $1.25 billion to settle antitrust charges brought by Advanced Micro Devices Inc., the world's No. 2 microprocessor maker. The company also said, however, that the payment would lower its tax rate because legal settlements are tax deductible.

Will Rates Go Up; Don't Take the Gamble, Buy Now!

By Alan Zibel, AP Real Estate Writer , On Thursday January 14, 2010, 11:23 am EST
WASHINGTON (AP) -- Rates for 30-year home loans edged lower for the second straight week, a report said Thursday, but remained above last month's record lows.
The average rate on a 30-year fixed mortgage was 5.06 percent this week, down from 5.09 percent a week earlier, mortgage company Freddie Mac said.
Rates dropped to a record low of 4.71 percent in early December, pushed down by an aggressive government campaign to reduce consumers' borrowing costs, but then rose steadily for the rest of the month.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often in line with long-term Treasury bonds.
The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make home buying more affordable and prop up the housing market.
While it's possible that the program could be extended, analysts believe the Fed is reluctant to do so. "We believe that the bar for the Fed's program extension is high," Credit Suisse mortgage strategist Mahesh Swaminathan wrote Thursday.
The average rate on a 15-year fixed-rate mortgages fell to 4.45 percent, down from 4.50 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.32 percent, down from 4.44 percent a week earlier. Rates on one-year, adjustable-rate mortgages rose to 4.39 percent from 4.31 percent.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point for 30-year loans, 0.6 point for 15-year and five-year loans and 0.5 point for one-year loans.

Fed says mild economic pickup broadening

Fed says mild economic pickup broadening

Reuters - A woman tries to fit into a car packed with toys after shopping at Toys R Us during ...
On Wednesday January 13, 2010, 4:00 pm EST
By Glenn Somerville
WASHINGTON (Reuters) - U.S. economic activity remained at a low level as 2010 began but was improving modestly and beginning to broaden out to include wider swaths of the country, the Federal Reserve said on Wednesday.
"Reports from the 12 Federal Reserve districts indicated that while economic activity remains at a low level, conditions have improved modestly further, and those improvements are broader geographically than in the last report," according to the periodic Beige Book report compiled this time by the Philadelphia regional Fed bank.
Ten districts said activity was picking up while the Philadelphia and Richmond Fed banks reported mixed conditions.
The Fed's findings were based on results of a survey taken on or before January 4. It said shoppers in the 2009 holiday season spent slightly more freely than in 2008 but at a rate still far below 2007 levels, when the economy was just on the verge of slipping into a serious financial crisis.
Job markets were still soft in most of the country, though the New York Fed reported "a modest pickup" in hiring and several service-sector firms in the St. Louis Fed region planned to take on more employees.
Wage rises and price pressures were subdued.
WON'T AFFECT POLICY
The Beige Book report, so called because of the color of its cover, will be used by U.S. central bank policymakers when the Federal Open Market Committee meets on January 26-27 to decide whether to adjust policy.
The Fed has slashed rates to near zero and pumped over $1 trillion into the financial system to prevent a banking failure and pull the economy out of the worst recession in decades.
It has pledged to hold rates ultra-low to nurture what appears to be a fragile recovery and comments from a senior policymaker on Wednesday reinforced the view that policy will be in place for some time.
"I think that we are going to be waiting for the economy to improve in a strongly sustainable fashion and until that happens then it's unlikely that we would be changing policy," Chicago Fed bank President Charles Evans told reporters after speaking to a business group in Coralville, Iowa.
Financial markets took the latest indication of modestly improving conditions positively, with stock prices adding to earlier gains after the report was issued in early afternoon.
It said home sales began increasing in most parts of the country as 2009 ended, especially for lower-priced homes. The extension of a federal tax credit for first-time homebuyers helped spur sales, according to realtors.
There were still plenty of signs of economic trouble.
The Fed said demand for loans continued to decline or weakened further in much of the country. As well, credit quality was still deteriorating and financial institutions in many districts including new York, Philadelphia and Cleveland said loan delinquencies were rising.
Commercial real estate conditions were still soft in most of the country. New York, Philadelphia, Kansas City and San Francisco all said that demand for commercial and industrial space was still losing momentum.
(additional reporting by Ann Saphir in Coralville, Iowa)
(Reporting by Glenn Somerville; Editing by Diane Craft)

Stocks to wrap up 2009 on high note

NEW YORK (Reuters) - Wall Street is likely to make a strong showing in the final week of 2009 as the bulls gear up to toast the first annual advance for U.S. stocks in two years on hopes of more economic stability in 2010.

The U.S. stock market's resiliency since the March bottom has put investors in the mood to celebrate. The trading week will be cut short by the New Year's Day holiday on Friday, when U.S. financial markets will be closed.
The S&P 500 is poised for what could possibly be its best year since 2003 -- in sharp contrast to a year ago, when stocks plummeted in the fallout from the mortgage crisis and panic rocked investors as 2009 got under way.
Even though no "all clear" has been sounded for the U.S. economy, equity strategists said stocks were poised to add to recent gains this week and build a base for a solid start to 2010 as optimism about the recovery grows.
There is an expectation now that economic indicators will keep showing improvements in key areas like housing and the labor market.
"There's an upward bias," said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm, based in Toledo, Ohio. "Economic numbers have been good. It's been an ideal situation for equities as there aren't that many other alternatives. I think the smarter money is going into equities."
The benchmark Standard & Poor's 500 .SPX started out November in a tight trading range. But by Christmas Eve, when stock trading ended early for the holiday, the S&P 500 had climbed to a 14-month closing high as investors bet the recovery would be strong enough to justify loftier stock valuations. U.S. markets were closed on Friday for Christmas.
DOUBLE-DIGIT GAINS FOR 2009
The S&P 500 is up 66.5 percent from a 12-year closing low set on March 9. Its trading levels now imply a forward price/earnings ratio of 15.5, according to Thomson Reuters data.
And oh, what a difference a year makes. The S&P 500 ended 2008 down 38.5 percent.
But for 2009, the S&P 500 is up 24.7 percent -- a gain that puts the broad market index on track for what could be its best year since 2003. An even stronger advance this week could put the S&P 500 in position for its best year since 1998.
For 2009, the Dow is up 19.9 percent and the Nasdaq is up 45 percent.
"The market is telling us that the economy is a lot stronger than people are giving it credit" for, said Cleveland Rueckert, a market analyst at Birinyi Associates in Stamford, Connecticut.
Although there might be some profit-taking in the final days of the year, the stock market's underlying tone should still be positive, Reuckert added.
"In our view, the market is going to go higher."
The ritual of window dressing should also support the stock market in the coming week, according to analysts. That strategy involves selling stocks with large losses and buying winners near the end of the year or quarter to improve a portfolio's performance.
"The fact that it's year-end is going to cause a fair amount of volatility on probably relatively light volume," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles. "I would expect the bias would be to the upside toward the end of the week."
Volatility may be enhanced in a holiday-shortened week, when the U.S. stock market will be open for only four days.
Volume may be exceptionally light, with many market participants taking time off through New Year's Day.
CONSUMER CONFIDENCE ON TAP
Economic and corporate calendars are light this week. But there will be a few items worth keeping an eye on, including the U.S. Treasury's auctions of $118 billion of two-year, five-year and seven-year notes.
Investors will watch for how much demand there is for U.S. government debt as efforts to revive the economy pump up government spending.
As the holiday shopping season comes to a close, the Conference Board's index of December consumer confidence will merit Wall Street's attention on Tuesday. The forecast calls for a December reading of 52.3, up from 49.5 in November, according to economists polled by Reuters.
Investors will note the October S&P/Case-Shiller home price index, also due on Tuesday.
On Wednesday, the Institute for Supply Management-Chicago's December index of business activity in the U.S. Midwest region is set for release. The median forecast of economists polled by Reuters puts the ISM-Chicago index at 55.0 in December, down from 56.1 in November. A reading above 50 indicates expansion.
The government report on weekly jobless claims is due to be released on Thursday. Reports on the labor market are being scrutinized closely as investors try to determine when job growth might resume.
November's surprisingly upbeat nonfarm payrolls report showed the U.S. unemployment rate dipped to 10 percent from 10.2 percent. That slight improvement in the job market led investors to wonder about the potential removal of some of the U.S. Federal Reserve's stimulus measures and the prospects for interest-rate increases next year.
But to keep the fledgling recovery going, the Fed pledged again on December 16, at the end of its last policy meeting, to keep interest rates low for an extended period of time.
The Fed is hard-pressed to prevent the economy from sliding back into a slump, which would result in a double-dip recession.
The policy of near-zero interest rates has let investors to borrow dollars cheaply to then invest in higher-yielding assets like stocks.
"We think it's a good time to be invested in equities, and equities continue to offer the best risk-reward (ratio) among the major financial assets," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
(Reporting by Ellis Mnyandu; Additional reporting by Leah Schnurr and Chuck Mikolajczak; Editing by Jan Paschal)

U.S. Economy: Home Sales Exceed Forecasts as Buyers Seek Credit

Dec. 22 (Bloomberg) -- Sales of existing U.S. homes in November rose to the highest level in almost three years as first-time buyers rushed to take advantage of a government tax credit and lower prices.
Purchases increased 7.4 percent to a 6.54 million annual rate, exceeding the highest estimate of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. Another report showed the economy grew a less-than-forecast 2.2 percent in the third quarter as companies cut stockpiles, pointing to manufacturing gains at the start of 2010.
The housing market is getting a boost from efforts by the government and Federal Reserve to stabilize the industry at the center of the worst recession since the 1930s. Improved consumer spending combined with record decreases in inventories will promote production, which may keep the world’s largest economy growing into 2010.
The economy is “rebounding again pretty much across the board,” said Steven Wieting, managing director of economic and market analysis at Citigroup Global Markets Inc. in New York. “We will see somewhat stronger growth,” he said, adding “it’s not going to be one of these dramatic recoveries.”
Stocks rose and Treasury securities fell after the reports. The Standard & Poor’s 500 Index added 0.4 percent to 1,118.79 at 1:28 p.m. in New York, and the S&P Homebuilder Supercomposite Index was up 3.8 percent. The yield on the 10-year Treasury note rose to 3.74 percent from 3.68 percent late yesterday.
Slower Expansion
The economy grew at a 2.2 percent annual rate in the third quarter, down from a prior estimate of 2.8 percent, revised figures from the Commerce Department showed today. Companies curbed spending and cut inventories at an even faster pace, leading to a slower pace of expansion.
Existing home sales were projected to rise to a 6.25 million annual rate, according to the median forecast of 69 economists in a Bloomberg News survey. Estimates ranged from 5.2 million to 6.5 million. The NAR revised October’s reading down to a 6.09 million pace from an initially reported 6.1 million rate.
First-time buyers accounted for 51 percent of sales last month, and 71 percent of the houses sold cost less than $250,000, the report from the real-estate agents’ group showed. The figures indicate the government’s tax credit helped boost demand.
Mortgage Rates
Fed debt purchases are helping keep mortgage rates close to record lows, while President Barack Obama’s Nov. 7 extension and expansion of the tax credit through April may provide short-term impetus to sales and construction.
The central bank last week signaled it would keep lending rates low for “an extended period” to foster growth. The average rate on a 30-year fixed mortgage was 4.94 percent last week and has averaged 4.85 percent since the end of October, according to Freddie Mac.
“Housing is on a solid footing through to the spring markets,” said Derek Holt, an economist at Scotia Capital Inc. in Toronto, who forecast a rise to 6.5 million units. “But once foreclosed, unlisted homes go back on the market and homebuyers’ incentives come off, we’re looking at a weaker back half of next year.”
Purchases of existing homes rose 44 percent in November compared with a year earlier, the biggest increase on record. The median price was $172,600, down 4.3 percent from November 2008. The figure is influenced by the mix of sales and the drop reflects the growing proportion of lower-priced houses.
Home Prices
A report from the Federal Housing Finance Agency in Washington showed home prices fell 1.9 percent in October from a year earlier. The group’s U.S. housing index is down 10.8 percent from the April 2007 peak.
The number of previously owned unsold homes on the market fell 1.3 percent to 3.52 million. At the current sales pace, it would take 6.5 months to sell those houses compared with 7 months at the end of October. The ratio is the lowest since December 2006.
The share of homes sold as foreclosures or otherwise distressed properties was 33 percent, said Lawrence Yun, the agents group’s chief economist.
“The tax credit had the intended impact of drawing buyers in and lowering inventory,” Yun said in a news conference. “An estimated 2 million buyers have taken advantage of the credit.”
Single-Family Sales
The report showed sales of existing single-family homes rose 8.5 percent to an annual rate of 5.77 million. Sales of condos and co-ops were unchanged at a 770,000 rate.
Toll Brothers Inc., the largest U.S. luxury-home builder, projected deliveries may fall by as much as 33 percent in the 12 months through October 2010, and the average selling price may drop as low as $540,000.
“We believe it may take some time for Americans to regain confidence in our economy, their job status and the benefits of home ownership,” Robert Toll, chief executive officer at Toll Brothers, said in a Dec. 3 statement. “We anticipate a gradual recovery in housing, similar to the one that occurred in the early 1990s.”
To contact the report on this story: Bob Willis in Washington at bwillis@bloomberg.net Last Updated: December 22, 2009 13:31 EST

Merger news, analyst upgrades drive stocks higher

By Stephen Bernard and Sara Lepro, AP Business Writers , On Monday December 21, 2009, 5:05 pm
NEW YORK (AP) -- Another wave of corporate dealmaking stoked investors' confidence in the economy and carried stocks sharply higher Monday.
Analyst upgrades of Alcoa Inc. and Intel Corp. and positive momentum on President Obama's health care overhaul also helped drive a broad advance on the stock market. Major indexes closed off their highs of the day but still rose about 1 percent. The Dow Jones industrial average jumped into the black for the month.
Bond prices tumbled as stocks rose, pushing the yield on the benchmark 10-year Treasury note up to its highest level since August. The dollar strengthened, hurting commodities prices.
Stocks got an early boost Monday after French drug maker Sanofi-Aventis SA announced plans to buy U.S. health care products company Chattem Inc. for $1.9 billion, while mining equipment maker Bucyrus International Inc. said it planned to buy Terex Corp.'s mining equipment division for $1.3 billion. Dutch automaker Spyker Cars submitted a new offer to buy Saab from General Motors Co.
Robert Pavlik, chief market strategist at Banyan Partners, said the flurry of corporate deal activity is an encouraging sign of strength in the economy.
"Companies are revealing that they are in a better position financially," he said. "If they weren't feeling as confident, you wouldn't see this type of activity occurring."
The deals announced Monday follow Exxon Mobil Corp.'s $29 billion takeover of XTO Energy Inc. last week.
In other corporate news, aluminum maker Alcoa Inc. announced an $11 billion joint venture in Saudi Arabia. The deal, along with an analyst's upgrade of the stock, drove Alcoa shares up nearly 8 percent, making it the best performer among the 30 stocks that make up the Dow.
An upgrade of chip maker Intel Corp. helped boost technology stocks, while health care stocks rose broadly as a historic health bill moved closer to passage in the Senate.
The Dow rose 85.25, or 0.8 percent, to 10,414.14, after rising as much as 130 points earlier in the day. The Standard & Poor's 500 index rose 11.58, or 1.1 percent, to 1,114.05, while the Nasdaq composite index rose 25.97, or 1.2 percent, at 2,237.66.
Bond prices sank as investors abandoned the safety of government debt in favor of stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, climbed to 3.69 percent from 3.54 percent late Friday.
The dollar rose against other major currencies, making commodities more expensive for foreign buyers. Light, sweet crude for February delivery fell 70 cents to settle at $73.72 a barrel on the New York Mercantile Exchange. Gold also fell.
Monday's surge in stocks helped lift the Dow into positive territory for the month, giving it a 0.7 percent gain. Many analysts believe stocks should finish out the year strong after several weeks of listless trading.
Investors have been putting the brakes on stock buying since November, stepping back from the market following a historic rally over the past nine months. At the same time, prospects of an interest rate hike and a potential rebound in the dollar have dogged investors who spent the year taking advantage of low rates to borrow cheaply and invest in stocks and commodities.
Historically, December is the best single month for stocks, with the S&P 500 index averaging a 1.6 percent gain. So long as economic and corporate news continues to be encouraging, analysts expect the market to keep its momentum going into the new year.
Among the standout stocks, Chattem surged more than 33 percent, adding $23.16 to $93.14 after Sanofi-Aventis offered $93.50 a share for the company. Chattem, which is traded on the Nasdaq, helped lift that index to an intraday high for the year.
Alcoa shares shot up 7.9 percent after the announcement of the Saudi deal and Morgan Stanley's upgrade of the stock based on a forecast of higher aluminum prices. Shares jumped $1.15 to $15.73, after earlier hitting a 14-month high of $15.98.
About three stocks rose for every one that fell on the New York Stock Exchange, where volume was 1.01 billion shares compared with 3.16 billion shares at the same time on Friday.
Volume was exceptionally high Friday as several types of options contracts expired and S&P made changes to the S&P 500. That index is the basis for many indexed mutual funds, so those funds were forced to alter their holdings to match the reconstituted index.
In other trading, the Russell 2000 index of smaller companies rose 8.03, or 1.3 percent, to 618.60.
Overseas, Japan's Nikkei stock average rose 0.4 percent. Britain's FTSE 100 rose 1.9 percent, Germany's DAX index gained 1.7 percent, and France's CAC-40 jumped 2.1 percent.

Stocks rise to 2009 highs after Dubai

Stock market ticks higher after Dubai gets $10B bailout; Exxon deal lifts energy shares
By Sara Lepro, AP Business Writer
On 5:45 pm EST, Monday December 14, 2009

NEW YORK (AP) -- Easing concerns about debt problems overseas and a $29 billion takeover deal by Exxon Mobil Corp. nudged major stock indexes to new highs for the year.

AP - FILE - In this Nov. 27, 2009 file photo, traders move about the floor of the New York ...

The market climbed Monday after the Middle Eastern city-state of Abu Dhabi extended $10 billion to nearby Dubai to help the emirate make debt payments. Analysts have been concerned since last month that a cash crunch in the former boomtown could send ripples through global credit markets.
The market's advance was uneven after Exxon Mobil said it would acquire XTO Energy Inc. The move will help Exxon tap into the growing supply of natural gas in the U.S. and could signal that more deals are afoot in the energy industry.
A 4.3 percent drop in shares of Exxon held the Dow Jones industrial average to more modest gains than other indexes, and shaved about $2 billion off the value of Exxon's all-stock bid for XTO. The Dow added 0.3 percent, while the broader Standard & Poor's 500 index rose 0.7 percent.
Financial stocks rose after Citigroup Inc. said it would repay the $20 billion it received last year from the government's financial rescue program. The government also will sell its 34 percent stake in the company. The news came just days after Bank of America Corp. repaid the $45 billion in bailout money it owed taxpayers.
The day's advance was orderly and signaled that traders remain cautious, as they have for weeks. A big run in stocks that began in March has slowed in the past month as investors look to lock in some of their gains from 2009 and determine how to position themselves for the new year. The S&P 500 index is up 1.7 percent so far this month, after a 5.7 percent gain in November and a 64.7 percent jump since early March.
"Most people, for the most part, have wrapped up the year," said Blaze Tankersley, chief market strategist at brokerage Bay Crest Partners.
The Dow rose 29.55, or 0.3 percent, to 10,501.05, its highest close since Oct. 1, 2008. The S&P 500 index rose 7.70, or 0.7 percent, to 1,114.11, its highest finish since Oct. 2, 2008. The Nasdaq composite index rose 21.79, or 1 percent, to 2,212.10.
The yield on the benchmark 10-year Treasury note edged up to 3.56 percent from 3.55 percent late Friday as prices fell.
The dollar fell against other currencies, helping to lift most commodities prices. Commodities are priced in dollars and become cheaper for foreign buyers when the greenback falls.
Gold rose, while oil fell 36 cents to settle at $69.51 a barrel on the New York Mercantile Exchange.
Analysts said stocks are likely to drift as investors await comments about the economy and interest rates from the Federal Reserve, which wraps up its last policy meeting of the year on Wednesday.
Investors expect the central bank to keep its benchmark interest rate at a historic low level of near zero. But there is some concern that rates could rise sooner than previously thought as the economy improves.
"People simply want to know if we are going to keep this low-interest-rate environment," said Michael Feser, president of Zecco Trading in Pasadena, Calif. "That has really been fuel for this market."
The Russell 2000 index of smaller companies rose 9.42, or 1.6 percent, to 609.79.
Three stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 4.5 billion shares compared with 3.9 billion Friday.
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IRS to outline changes in the home buyer tax credit program

Revisions include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.
By Kenneth R. Harney
December 6, 2009
Reporting from Washington - If you're thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.Tops on the agency's list of advice: Cool it for a couple of weeks. Even if you qualify for one of the credits, don't send in any requests to the IRS quite yet. Wait until later this month when the agency publishes its revised Form 5405 with the key instructions needed to get you a check from the government.The forthcoming version of the form will incorporate the major changes to the tax credit program made by Congress in legislation signed by President Obama on Nov. 6. These include expanded income limits, a cap on home prices, additional documentation requirements and prohibitions against claims by dependents.In a tax bulletin issued just before Thanksgiving, the IRS emphasized that all home purchasers after Nov. 6 "must use this new version [of Form 5405] to claim the credit." Put another way: If you send in the old version -- the one you can currently download from the agency's website-- your request for the credit will probably go nowhere.The legislation -- known as the Worker, Homeownership and Business Assistance Act of 2009 -- extended the $8,000 first-time home purchaser credit until April 30 for signed contracts and June 30 for closings. The law also created a new tax credit for people who have owned a principal residence for a consecutive five of the previous eight years, and who purchase a replacement principal residence with a signed contract no later than April 30, followed by a closing no later than June 30.Qualified repeat buyers can obtain credits up to $6,500. For both the first-time and repeat buyer program, the credit is equal to 10% of the purchase price of the house, up to a maximum of either $6,500 or $8,000.The new IRS bulletin also outlined the agency's guidance on other important features of the amended credit program:* Members of the armed forces, as well as diplomatic and intelligence personnel serving in foreign countries, will get an extra year to buy a principal residence and still qualify for a credit. They will have until April 30, 2011, to enter into a contract to purchase a house, and until June 30, 2011, to close on it.* Anyone who buys a house after Nov. 6 -- even those who had intended to get in the door before the previous Nov. 30 expiration date for the $8,000 credit -- will now need to comply with several new rules. First, the house cannot cost more than $800,000. Second, no one under age 18 can claim the credit no matter what the circumstances. And finally, anyone who is counted as a dependent on another taxpayer's federal filings is ineligible for a home purchase tax credit.* The expanded income limits for purchasers after Nov. 6 range to $125,000 in "modified adjusted gross income" for single taxpayers and to $225,000 for those who file jointly. Singles with incomes between $125,000 and $145,000 may be eligible for reduced credit amounts, as are joint filers with incomes from $225,000 to $245,000. Anyone with an income above these amounts cannot qualify for either of the credits. Under the pre-Nov. 6 rules, taxpayers applying for the $8,000 credit were limited to incomes of $75,000 (single filer) to $150,000 (joint filer).The IRS continues to offer detailed consumer information resources on the credits, including questions and answers on a variety of home purchase scenarios.For example, some taxpayers seeking the extended $8,000 credit are uncertain about co-purchase and co-signing situations, especially involving parents and adult children. When a home-owning parent co-signs for a mortgage with a son or daughter, and both names appear on the note, can the son or daughter qualify for the first-time purchaser credit?The IRS says the parent clearly does not qualify for any portion of the credit since he or she already owns a principal residence. But if the son or daughter has not owned a house during the three years preceding the current purchase, and qualifies on income, he or she can be allocated the entire $8,000 credit.Similarly, when unmarried individuals co-purchase a house, and only one of them is eligible for the credit, the full $8,000 can be allocated to the eligible buyer.kenharney@earthlink.netDistributed by the Washington Post Writers Group.
Copyright © 2009, The Los Angeles Times