The U.S. may be well into a prolonged period of steady economic growth, but it hasn’t yet reached its full potential, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group. Fiscal headwinds are expected to keep growth to below 2.0 percent for the first half of the year, with gradual strengthening in the second half of 2013 and into 2014. However, as fiscal drags wane, growth should continue to move in the positive direction amid an ongoing recovery in housing, rising household wealth, and expanded energy production.
“At the outset of the year, we forecasted that 2013 would witness sustainable but below-par growth as the economy begins its transition to more normal levels. Halfway through the year, our view is little changed,” says Fannie Mae Chief Economist Doug Duncan. “We expect approximately 2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012. This is consistent with the incremental improvement seen over the past few years but still below the economy’s potential. Our forecast calls for growth to push past 2.5 percent in 2014, boosted largely by tailwinds from the strengthening housing market.”
Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels. Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.
For an audio synopsis of the June 2013 Economic Outlook, listen to the podcast on the Economic & Strategic Research.
For more information, visit www.fanniemae.com.
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Get this: A new study finds men don’t mature until age 43. If only my father could have enjoyed such a luxury.
Great Britain’s Daily Mail newspaper reports that the study, commissioned by Nickelodeon UK, examined differences in maturity between men and women. It found both sexes agree that men are far less mature and women reach full maturity 11 years sooner.
Some examples: Men still have their mothers do their laundry, laugh when they burp or break wind, snicker at dirty words and don’t know how to cook even the most basic meals.
Compare such modern males to my father.
He was 3 when his father died in 1937 — in the thick of the Great Depression.
His mother had to work full-time to support him and his sister, and she worried constantly about them both — particularly about my father.
He was immature when males are supposed to be, as a boy, and he got into a bit of mischief, pulling pranks and doing the things boys used to do.
He once told me that he and his lads thought it a funny idea to set a large rock onto trolley tracks. A trolley made a spectacular noise when it hit the rock, scraped along and nearly jumped off the tracks — but luckily, nobody got hurt.
My father’s mischievous ways were finally tamed in the ninth grade when his school’s football coach persuaded him to join the team. The coach became a father figure to my dad — who discovered a talent for carrying a football with power and speed. (He was inducted into the Carrick Football Hall of Fame about 15 years ago.)
Football taught him responsibility. It matured him.
He was only 16 when he met my mother and that matured him, too. His dream was to marry her and, soon out of high school, he began searching various opportunities so he could provide for a family.
He passed on college football scholarships, disappointing his mother and coach, to try his hand at pattern-making and plumbing. His plans were interrupted when he got drafted into the Army, but when he returned two years later, he found a secure position with the telephone company.
By the time he was 23, he was married, with his first daughter — to be followed by five more children over the years.
His entire life was devoted to working hard to provide for his family. He never kept more than $5 a week for himself to buy an occasional cup of coffee.
It’s amazing how rapidly things have changed from his generation to today’s.
My father will be 80 next month. Until he retired, his entire adult life was about work and sacrifice. His only respite was enjoying a few ice-cold beers when he got home at night or an after-dinner nap on the back porch. He was fully mature in his 20s — a maturity born out of necessity.
Perhaps if my father had been born in the modern era, he would be just as lackadaisical as today’s males. But then again, my father had to mature to win my mother’s heart, so they could have a home and a family and a good long life together — and that is exactly what they accomplished.
In any event, it is true that modern males are maturing later, which explains this joke:
Q: Why are men so much better at psychoanalysis than women?
A: Because when it is time to go back to their childhood, men are already there.
©2013 Tom Purcell. Tom Purcell, author of “Misadventures of a 1970′s Childhood” and “Comical Sense: A Lone Humorist Takes on a World Gone Nutty!” is a Pittsburgh Tribune-Review humor columnist and is nationally syndicated exclusively by Cagle Cartoons Inc. For info on using this column in your publication or website, contact Cari Dawson Bartley at Cari@cagle.com. Send comments to Tom at Purcell@caglecartoons.com.
Getting a mortgage is challenging enough — with strict underwriting requiring detailed explanations, sourcing of monies and debt ratios — but adding a divorce to the picture makes it even more difficult for a borrower. The good news is that despite most divorce situations, many can still successfully get a mortgage.
What to plan for: By providing your mortgage company with the most accurate and true picture of your circumstances — starting with the loan application — you’re helping them to find the best way to structure your loan for a favorable credit decision. The lender will also look at your divorce decree for any other undisclosed/non-credit report financial obligations such as child support, alimony/spousal support paid or received.
If you receive income in the form of child support or alimony: This income can be used for qualifying for the mortgage, so long as there is a six-month history and the income is poised to continue for the next three years, determined by child support or an alimony agreement detailing the terms of the obligation for the party paying the debt.
If you pay alimony or child support: This reduce your borrowing ability as debts reduce income, and income is needed to offset a mortgage payment.
If you are divorced even as long as 20 years ago: There is no statute of limitations on mortgage loan underwriting, so the full divorce decree will be required no matter how many years you have been divorced.
If you own a house and are on a mortgage with an ex-spouse: As long as the divorce decree awards the other party with the home, and the other party is willing to provide supporting evidence that they make the mortgage payments on that home — by providing 12 months of bank statements and/or canceled checks — the total mortgage payment on that home can be omitted from the decision-making process on your new mortgage, which can improve your ability to qualify.
If you and your ex make the mortgage payment from the same joint bank account and the divorce decree awarded the other party with the property: You are both 50-50 responsible because the money is “co-mingled” funds from the same place to pay the obligation. There is no way to support your position that one person is responsible for making the payment because it’s coming from a joint account.
If the ex-spouse is responsible for making the mortgage that you are also on: Explore the possibility of having the ex-spouse refinance you off the mortgage obligation.
If your ex-spouse is refinancing you off a mortgage loan: A final closing statement called an HUD could be required by the lender you’re working with for procuring your loan to omit the payment from the other house.
If you have a joint consumer credit such as credit cards, installment loans, auto loans or even student loans: Unless you can prove the other party is for responsible for the credit obligation (with 12 months of canceled checks or bank statements), those liabilities will be factored into your ability to qualify.
Tips If You’re Not Yet Divorced
It’s so important to create a marital settlement agreement prior to being divorced. This is a precursor to getting a divorce that could be a great asset in helping you qualify for home financing. Navigating the financial questions that inevitably come up during the separation or divorce can easily be taken care of by having a clear delineation in writing on whose property is whose.
Consumers planning a divorce in the future would also benefit by separating their finances. This means having separate bank accounts, and paying any obligations from these separate accounts. If you are trying to get a mortgage, or will be trying to get a mortgage, consider having a conversation with mortgage professional upfront, who can guide you through the complexities in the underwriting process during a divorce.
Housing starts rose less than expected in May, likely reflecting labor and material constraints, but the overall trend remained consistent with strength in the housing market. Though permits for future home construction fell, that followed a surge in April, which hoisted them above the 1 million-unit mark. The pullback last month reflected a drop in the volatile multifamily sector, but permits for single-family construction touched their highest level in five years.
The Commerce Department said on Tuesday housing starts rose 6.8 percent to a seasonally adjusted annual rate of 914,000 units. April’s starts were revised up to show a 856,000-unit pace instead of the previously reported 853,000 units. Economists polled by Reuters had expected groundbreaking to rise to a 950,000-unit rate last month.
Builders, who are ramping up construction to meet demand for housing against the backdrop very low inventory, have been complaining about labor shortages and increased material costs. Sentiment among single-family homebuilders hit a seven-year high in June, a report showed on Monday, amid optimism over current and future home sales.
Lean inventories are pushing up home prices, which are in turn boosting consumer confidence and spurring consumption, helping soften the blow on the economy from tighter fiscal policy and slowing global demand. The Federal Reserve has targeted housing as channel to boost growth, through monthly purchases of $85 billion in government and mortgage-backed securities.
Though residential construction only accounts for about 2.5 percent of gross domestic product, housing has a wider reach on the economy. Analysts estimate that for every single-family home built, at least three jobs lasting for a year are created. Starts are expected to top a 1 million-unit pace this year.
Last month, groundbreaking for single-family homes, the largest segment of the market, rose 0.3 percent to a 599,000-unit pace. Starts for multifamily homes increased 21.6 percent to a 315,000-unit rate. Permits to build homes fell 3.1 percent last month to a 974,000-unit pace. Permits for multi-family homes dropped 10 percent to a 352,000-unit rate. Permits for single-family homes rose 1.3 percent to a 622,000-units, the highest since May 2008.
(Reporting by Lucia Mutikani; editing by Neil Stempleman.)
Previous stories on housing starts:
oHousing Starts Drop but Building Permits Soar