Henry Blodget highlighted this interesting chart from Bloomberg, which notes that American homeowners are nearly back in the black when it comes to aggregate mortgage debt. Read the article and you’ll see it’s still a complex picture, but rising home prices and the slow process of de-leveraging mortgage debt are definitely heading in the right direction. For many families, this will have a significant positive effect on their personal balance sheets.
Now, nobody is saying this will be easy. Grooms will have to deal with their bride’s fantasies about what their wedding should entail. But that also offers a perfect opportunity to discuss a budget. Many young couples don’t deal with this before marriage and that leads to a host of problems. Having these discussions now is critical and both of you will learn things about one another and how you might be able to manage money together.
Once you have a budget, you can do all sorts of research to find deals or creative ways to handle different aspects of the wedding.
These are big decisions, but taking the easy way out by getting a loan is the wrong way to handle it.
Many are whining in this country over an increase in the top income tax rate to 39.6%, and of course we hear the ridiculous notion that the United State is becoming Europe. Now consider that the French government is try to raise the top income tax rate there to 75%!!
Now that’s a tax that will affect behavior, and we see Gerard Depardieu getting Russian citizenship to escape. Sadly, he’s become an apologist for Putin and a propaganda tool against the reform movement.
So keep this in mind when completing your tax return this year. It’s really not that bad.
The number of underwater mortgages is plummeting as the housing market continues to recover. This will have huge ramifications for the finances of millions of people and families.
Maggie Medved was stuck with her Phoenix house for two years after the market crash wiped out the equity in the property. Last year, as prices in the area rose by the most in the U.S., she and her partner were finally able to sell the 3-bedroom 1950’s style home and move to a larger place.
“We were counting the days for when we could move,” said Medved, 40, who trains employees for weight loss company Jenny Craig Inc. “We definitely knew it was a waiting game because it would’ve been financial suicide if we had sold earlier.”
Medved was among the 12 million borrowers in the U.S. who at the peak of the real-estate downturn owed more on their mortgages than their houses were worth, blocking them from moving or saving money by taking advantage of the lowest borrowing costs on record to refinance. As prices recovered, the number of underwater borrowers fell by almost 4 million last year to 7 million, according to JPMorgan Chase & Co. (JPM), and could drop to 4 million within 2 years.
The housing market is rebounding faster than anyone thought possible, according to Blackstone Group LP (BX)’s global head of real estate Jonathan Gray, as the Federal Reserve buys mortgage bonds to keep rates near record lows and investors sop up a diminishing supply of properties for sale. Housing construction could boost U.S. gross domestic product by 0.4 percentage point and home price appreciation may add another 0.2 percentage point, Bank of America Corp. (BAC)’s senior economist Michelle Meyer forecasts.
The housing recovery is one of the main reasons why we can now start getting optimistic on the US economy. So many people were stuck in impossible situations, and now that burden is being lifted. The Fed has been a huge driver of this improvement, along with the billions in private investment looking for deals on under-priced homes.