For many people, their home is their largest asset. Many people paid on a home mortgage for years and built up significant equity in their homes. This is true for most home owners despite the fact that home prices have fallen in many parts of the country. Recently, there have been an increasing number of signs that the bottom has been seen in home prices. Why experts predict we’ve already seen the bottom in home prices The latest sign was recently reported in the Los Angeles Times, which noted “The Santa Ana research firm CoreLogic estimates that the number of homeowners in the U.S. who owed more on their homes than those properties are worth totaled 10.8 million American households, or about 22.3 percent of all homes with mortgages, at the end of the second quarter.” That wa...

Every month, consumers are asked what they think about the economy and the results are compiled in the Thomson Reuters/University of Michigan sentiment survey. The latest reading presents a more positive outlook among consumers than other recent data suggests. The Michigan survey’s index of current conditions, which reflects American’s perceptions of their financial situation and whether they consider now to be a good time to buy big-ticket items like cars or houses, improved to 87.6 from 82.7 the prior month. This is the highest value for this index since January 2008. In another question, the index of consumer expectations six months from now, which analysts believe more closely projects trends in consumer spending, fell to 64.5, an eight-month low. Also included in the confidenc...

For the first time, retirees are receiving less in benefits, on average, than they paid into the system over the course of their lives. At least that was the conclusion of a recent study completed by the Associated Press which reviewed the cash benefits and tax payments of an average couple. The numbers are surprisingly large. “A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank.” “Underwater” social security and benefits: what it means for you In previous generations, the pay outs often topped the t...

Some very well-regarded economists recently published research based on over 200 years worth of data that concluded low interest rates are most likely here for the next two decades. The research looked at what happened after government debt soars to unsustainable levels. Their definition of unsustainable is when the total government debt exceeds 90 percent of the country’s Gross Domestic Product (GDP), which is a common measure of the economy. On average, too much debt leads to slow economic growth and low interest rates for an average of 23 years after the level of government debt grows beyond 90 percent of GDP. The United States breached that level in 2010. That puts us on track for low rates until 2033, and anyone retiring today will be severely impacted if this proves to be the case ...

Before prices can go up after a crash, they first have to stop falling. The latest data on home prices indicates that may be happening on the national level. The latest reading of the Standard & Poor’s/Case-Shiller home price index showed that prices increases in each of the 20 cities tracked that are tracked individually. Nationally, home prices were up 2.2 percent from April to May, the second consecutive gain after a seven month streak of flat or falling prices. Over the past twelve months, the national price index has shown a drop 0.7 percent, a decline but it is the smallest decline recorded since September 2010. A month earlier, the one year decline totaled 1.8 percent. There was a great deal of variability with the different markets. Chicago, Atlanta, and San Francisco rep...

Soybean crops are having a rough time growing this year - leading to higher food prices. Weather has been a big story this year as a dry, hot summer has left farmers worried about their crops. According to a recent story by Reuters, grain analysts expect the U.S. corn crop to be the smallest in six years and about 14 percent lower than the most recent forecasts made by government economists. Soybeans that are planted later in the year are less affected by the weather, but analysts are still expecting to see the smallest crop for those in four years, too. Wheat will also be impacted, as evidenced by soaring grain prices in the futures markets. Some experts predict that relief will come in about six months, when farmers in South America harvest the crops they are planting now. How this year&...

MarketWatch recently offered a surprisingly upbeat assessment of retirement planning. The news service reported that, “One third of people close to retirement said they don’t know how much money they will need to cover basic expenses in retirement, according to a new study.” Allianz Life Insurance Company of North America also surveyed some 1,000 U.S. residents who were between the age of 55 and 65. Questions covered were what concerns retirement planning raises and how much money respondents think they need to retire. It seems optimistic to us that two-thirds of those facing retirement within the decade know how much money they will need. There are just too many uncertainties in life and in the current market environment, but figuring out how much needs to be saved for retirement: ...

The National Consumer Law Center recently prepared a report on what they call “the other foreclosure crisis.” Every state has a law that allows local governments to sell homes or other property through a tax lien foreclosure process if the property owner falls behind on property taxes or other municipal charges. “Other charges”, in these cases, could be a water or sewer bill, for example. Under this process, a $300,000 home might be sold at a tax lien sale for less than $1,000. Of course the buyer would then be able to quickly resell the property and enjoy a very large profit. The home owner would be likely to face eviction and lose their home. The inability to pay a small bill could lead to a home owner losing hundreds of thousands of dollars in home equity. This equity mi...

The American Dream is hard to define and probably means different things to almost everyone. Some believe that the dream is to own a house, see their children succeed and have a financially secure life. Others want much more, and still, there are some who want less. But according to a recent survey, 98 percent feel that home ownership is still the central component to the American Dream. This survey was conducted by Brookfield Real Estate and Relocation Affiliates Inc., owner of the Prudential Real Estate franchise network. The results of the quarterly Prudential Real Estate Outlook Survey are designed to show the level of Americans’ confidence in home ownership and real estate. Home ownership is still important Results showed that 78 percent of respondents said owning a home was sti...

Interest rates have recently fallen to record lows. Bad news from Europe and a slowing U.S. economy have pushed rates down. Central bankers believe that low rates can stimulate economic growth, so they have been using this as a tool to combat slow GDP growth for several years. With sluggish employment growth and a real estate market that has been struggling for years, many people feel the recession has never really ended and wonder if it ever will end. The experts say that growth will eventually resume and when it does, interest rates will rise. Why now is the perfect time to borrow with a reverse mortgage Bloomberg recently wrote that experts believe bonds will be a poor investment choice over the next twenty years. The article cited a recent research paper from investment research firm I...