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December's Leading Indicators Point To Stronger Recovery

Source: The Atlantic | January 20, 2011

After showing significant improvement in November, the Conference Board's Leading Economic Index (LEI) continued to rise at a similar pace in December. The index has now increased for six months straight, and at a faster pace over the past two months than was seen last fall. The components responsible for the index's rise in December also provide some reason for optimism, implying that the recovery will be much stronger going into 2011 than it was through much of 2010. Some important components of this index also contributed to its strong performance last month. The biggest contribution was from additional housing permits, which implies that the home building activity could be improving. This is a little surprising, as permits were one of the few components to decline in November. The second biggest contributor to December's improvement was interest rates, which continue to remain conducive to expansion. [Read this article]

Why You Might Be Better Off Than You Think

Source: U.S. News & World Report | January 20, 2011

There are plenty of things wrong with the U.S. economy, and practically everybody knows what they are. Yet America remains one of the most comfortable places in the world to live, and prosperity is still well within many people's reach. Longer-term gains in quality of life remain largely intact - including many improvements we tend to take for granted. "People care about more than GDP," says Michael Cox, a professor at Southern Methodist University and former chief economist at the Federal Reserve Bank of Dallas. "Living standards also involve leisure time and recreation, variety in choice of diet, working conditions, and safety and security. And most of those things are still getting better." When measured against the heady days of 2006 and early 2007, conditions today do seem disconcerting. But measuring today's living standards against longer-term trends reveals many ways we're better off than we were not long ago. [Read this article]

Housing's Future Looking Brighter

Source: USA Today | January 20, 2011

housing industry is poised to gain strength this year after coming off one of its worst years ever in 2010, economic forecasts and new data released Wednesday show. One cause for optimism: Building permits for new single-family homes rose 5.5% last month, the third-consecutive monthly increase and the strongest showing since March, the Commerce Department said. That sets the stage for more home construction later this year as the economy improves, says Celia Chen, economist at Moody's Analytics. "The trend is up," Chen says. The key is job creation, says Lawrence Yun, chief economist with the National Association of Realtors. When more people are working, and earning higher incomes, home buying increases. IHS expects the economy to add 2.5 million jobs this year and 2.7 million next year. "The (housing) market appears to have hit bottom, and now we're trying to get back to normal," Yun says. [Read this article]

U.S. Home Sales, Leading Indicators Index Show Expansion Gaining Momentum

Source: Bloomberg | January 20, 2011

Sales of previously owned U.S. homes and the index of leading indicators exceeded forecasts, signs the expansion is gaining momentum at the start of 2011. Purchases of existing houses jumped 12 percent in December to a 5.28 million annual rate, the National Association of Realtors said. The New York-based Conference Board's gauge of the economic outlook for the next three to six months rose 1 percent. Claims for unemployment benefits fell by 37,000 last week, according to the Labor Department. "Manufacturing is on solid footing, the housing market is nearing a bottom and the labor market is slowly healing," said Ryan Sweet, a senior economist at Moody's Analytics Inc. "The economy is still heading in the right direction. It seems to be gathering some steam but we have a long ways to go." [Read this article]

They Did What To That House?! Remodel Horror Stories

Source: CNN Money | January 24, 2011

You've heard of McMansions, but what about Frankenhouses? These are homes that have been "renovated" to feature things like pipes running through living rooms, bedrooms strung together like garlic cloves, and fluorescent floors. It's scary what people do to their homes. HomeVestors - famous for its "We Buy Ugly Homes" billboards - specializes in buying these homes that no one else would want. In fact, they're often so bad that they have to label listings as "for investors only" because they're not suited to ordinary buyers. For example, those pipes running through the living room? They would have to be completely redone before the house could even get inspected. "We get a lot of the houses after real estate agents have given up on them," said David Hicks, CEO of HomeVestors. He calls them horror houses and marvels at some of things that former owners must have thought were brilliant ideas at the time. Here are some of the worst creations he's found. [Read this article]