The housing crisis hits swing states
John King, Dan Lothian and Jim Acosta discuss what the presidential candidates say about housing, and how that impacts swing states.
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Post by: Filed under: 2012 Election • Housing Market • Mitt Romney • President Barack Obama |
Surviving the housing crisis
Homeowners are struggling to make payments in the challenging job market, and the value of their homes is decreasing.
Letters to the President #529: 'Our house…is a very, very, very indebted house...'
Tom Foreman | BIO
AC360° Correspondent
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Reporter's Note: President Obama keeps talking about how much worse the economy might be right now; but as I note in my daily missive to Pennsylvania Avenue, plenty of homeowners and folks without jobs think it is still plenty bad.
Dear Mr. President,
Despite my overwhelming tendency to assume every pile of manure must be hiding a pony, the latest housing news stinks. The numbers are abysmal, wretched, horrifying, and putrid. Oceans of homes that are being sold are already in foreclosure, many more than that are being sold for much less than they would have fetched a couple of years ago, and all the promise of the home sales credit that everyone hoped would fuel a sustained surge is just a pleasant memory now…kind of like pension funds, and family vacations.
I’ve told you too many times before, but I will tell you again. If you do not find a way to stabilize this disastrous plunge into home ownership hell, nothing else you can do will get the economy firmly back on track.
I’m not necessarily talking about a wholesale bailout of those who are in trouble. I know that would require some firecracker hot legislative wrangling that you might not want to take on in the dog days of the DC summer. What I am saying is what we’ve known all along: The bad loans must be identified and so must the banks which are holding them.
Until that is done, they will continue to poison the economic well. Banks will keep playing it too close to the vest on loans that really ought to be readily approved. Homebuyers and businesses looking to expand will keep running into a lending market that is running like a scared rabbit from even the slightest, imaginary whiff of risk. And all of that will keep dragging down the construction sector, hurting manufacturers, eating jobs and the cycle gets worse and worse.
Look at it this way: Maybe you can count on having a roof over your head, but many of the rest of us remain genuinely worried about the quaking financial earth beneath homes.
Other than that, I hope all is well with you and yours. We are considering quick, throw-together barbeque on Saturday. Do you want to come over? If you could bring some potato salad, that would be great. And some extra ice; I’m pretty sure if you come up MacArthur Boulevard from your house to ours you’ll pass a 7-11.
Regards,
Tom
Financial Dispatch: Home sales skyrocket
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Andrew Torgan
CNN Business News Producer
Sales of new homes shot through the roof last month at the fastest single-month rate in nearly 50 years as buyers snatched up properties before the expiration of an $8,000 tax credit.
New-home sales soared 26.9% in March, snapping a four-month streak of declines, the Census Bureau said.
And on a year-over-year basis, sales jumped 23.8% from March 2009.
New-home sales rose in every region of the U.S. The South saw the biggest jump - up 43.5%, while the Northeast saw sales climb 35.7%. The West and Midwest regions both saw single-digit percentage growth, with the West up 6% and the Midwest up 4%.
This follows a report on Thursday from the National Association of Realtors that showed sales of previously-owned homes - known as “existing home sales” - increased by nearly 7% in March as new home buyers looked to cash in before that tax credit expires on April 30.
Financial Dispatch: Jobless claims and foreclosures drop
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Andrew Torgan
CNN Financial News Producer
The number of Americans filing first-time claims unemployment insurance fell sharply last week to the lowest level in more than a year
Initial claims for jobless benefits fell by 43,000 to a seasonally adjusted 440,000 in the week ended Feb. 6, the Labor Dept. said. And the number of people who continue to collect benefits for a week or more - known as continuing claims – dropped by 79,000 to just over 4.5 million in the week ended Jan. 30, the most recent data available.
A Labor Dept. spokesman said the snow storm that crippled much of the East Coast last week did not impact the number of jobless claims filed, but at least one analyst expects that next week's numbers – reflecting claims from this week - will definitely be impacted by Wednesday’s blizzard.
The largest increase in initial claims for the week ending Jan. 30 was in Pennsylvania (+10,495) with layoffs in the construction, trade, and service industries.
The largest decrease was in New Jersey (-1,819) due to fewer layoffs in trade and service industries.
Financial Dispatch: Auto sales, unemployment and big rip-offs
Andrew Torgan
CNN Financial News Producer
Auto sales numbers in the U.S. rose in January, although the overall results from the world’s major automakers were disappointing. Sales were hurt by weak consumer demand and the well-documented problems at Toyota.
Looking at the big picture, Ford, General Motors and Nissan all reported sales gains compared to a year ago. Honda, Chrysler and Toyota said January sales fell.
In particular, Ford's sales were good enough to lift its market share and vault it back into the No. 2 position in terms of U.S. sales, passing Toyota.
FULL POST
Financial Dispatch: Apple, Toyota, Obama (oh my!)
Andrew Torgan
CNN Financial News Producer
Lot’s of ground to cover today: a massive car and truck recall, the latest must-have gadget, a Fed meeting, and what is arguably the most important address of President Obama’s short time in office. So let’s take it all I order of occurrence.
First up, Toyota said late Tuesday it is asking dealers to suspend sales of eight models, and is halting production of those models, after a recall to correct a problem that could cause the gas pedal to stick.
About 2.3 million vehicles will be affected by the recall. That's about 500,000 more vehicles than Toyota sold in all of 2009.
In issuing the recall, the automaker said it had not yet found a way to fix the problem, but wanted owners to be aware of the potential issue.
The recall affects Toyota's 2009-2010 RAV4, Corolla and Matrix; 2005-2010 Avalon; certain 2007-2010 Camrys; 2010 Highlander; 2007-2010 Tundra and the 2008-2010 Sequoia (click here for what to do if your car is on the list).
Toyota owners with questions should call Toyota's customer service line at 800-331-4331.
Financial Dispatch: Ford, GM hiring workers
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Andrew Torgan
CNN Financial News Producer
There are small glimmers of hope in the American auto industry. Ford Motor says it will hire 1,200 workers in Illinois as part of a $400 million plan to ramp up production of next year's Explorer SUV.
The automaker says it expects to fill the full-time jobs at its Chicago Assembly and Chicago Stamping plants by the end of the year.
The expansion comes as Detroit’s automakers look to recover from a dramatic plunge in sales, which fell to a 27-year low last year. But these new workers will probably not make as much as they would have in previous years.
Under union contracts signed in 2007, the U.S. automakers are able to pay newly-hired employees significantly less than their veteran factory workers. The contracts also allow automakers to give reduced health care and pension benefits to new hires.
Separately, General Motors says it intends to become the first major automaker to design and manufacture electric motors for cars in the United States - adding jobs in the process.
The first of GM’s electric motors will be used in the next generation of the company's rear-wheel-drive hybrid vehicles such as the Chevrolet Tahoe hybrid SUV beginning in 2013.
Financial Dispatch: Stocks inch higher
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Andrew Torgan
CNN Financial News Producer
Stocks on Wall Street managed some slight gains today as investors weighed worries about the bank sector, the likelihood of Fed Chairman Ben Bernanke being confirmed for a second term and a troubling report on the housing market.
The Dow added 23 points or 0.2%. The S&P 500 added 5 points or 0.5% and the Nasdaq also gained 5 points or 0.3%.
Stocks plunged last week after President Obama proposed new limits on banks and talk swirled that Bernanke's term may not be renewed. In three sessions, the Dow, S&P 500 and Nasdaq all slumped 5%.
But those worries were tempered today at the start of a busy week for economic and earnings news. This week brings a Fed meeting, the first reading on fourth-quarter GDP growth, the president's State of the Union address and profit reports from a slew of major companies – including DuPont, Johnson & Johnson, and Travelers.
First out of the gate with earnings this week is Apple, which reported another strong quarter after the closing bell on the back of its current product lineup, which includes iPhones, iPods and Macintosh computers.
Financial Dispatch: Home prices flatten
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Andrew Torgan
CNN Financial News Producer
Bad news on the housing front: home price gains of the past few months flattened out in October, compared to the month before.
The S&P/Case Shiller Home Price Index covering 20 of the largest metropolitan areas in the nation was unchanged in October, after four consecutive months of gains. The index is also down 7.3% from a year ago.
Analysts had been expecting a slight month-over-month increase in October and a year-over-year loss of 7.1%.
An executive at Standard & Poor's says today’s numbers are likely to spark worries that home prices are about to take a second dip.
Separately, a key measure of consumer confidence rose for a second straight month in December, with the outlook for the next few months hitting a 2-year high.
The Conference Board, a New York-based research group, said its Consumer Confidence Index rose to 52.9 in December from an upwardly revised 50.6 in November.
The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation's economic activity. Still, the overall index remains at historically low levels and is lower than it was in August.
Job hunters may get a reprieve in the New Year.
A new study found that 20% of employers plan to increase their number of full-time, permanent employees in 2010. That’s up from 14% in 2009, according to CareerBuilder's 2010 Job Forecast.
