Archive for the ‘homebuyers’ Category
July 22nd, 2009 | 
Author: 
Vast stretches of the U.S. can be now considered in a depression,
not a recession,with the unemployment
rates presently standing at,
Michigan at 15.2%
California 11.6%
Nevada 12.0%
Oregon 12.2%
Ohio 11.1%
North Carolina 11.0%
South Carolina 12.1%
Kentucky 10.9%
Tennessee 10.8%
Indiana 10.7%
The number of long-term unemployed in the U.S. (meaning those without jobs for 27 weeks or more) is now 4.4 million which represents 29% of the unemployed, and that’s the highest number since records began in 1948.
June unemployment reached 9.5 percent, which is the highest since 1983, and many parts of the country are suffering a depression and not a recession.
In total, more than 100 urban areas now have unemployment rates over 10%.
Adult male unemployment nationwide is already in double digits at 10%.
Black unemployment is 14.7%
Hispanics at 12.2%
Teenage unemployment is 24%
Black teenage unemployment close to 40%.
Hundreds of thousands of people lost their jobs in the automobile and construction industries, and many of those in the auto industry already feel that they may never work again, and those who were in construction say that it will take years to recover financially from the long-term unemployment.
For the last thirty years, a person that lost his job remained unemployed for an average of 15.8 weeks, but in the June average duration of unemployment was 24.5 weeks, and the number of people claiming jobless benefits reached a record 6.88 million in the week ended June 27.
Government figures show that the percentage of unemployed workers who permanently lost their jobs, as opposed to those who are supposedly on temporary layoff reached a record 53.5 percent in June.
There are around six candidates for every job that’s on offer, which is the highest since the government began keeping records, and the ratio was just over 2-1 just a year ago.
That figure of six candidates for every job is forcing people to lower their salary expectations, which in turn puts a squeeze on spending, and a recent survey suggests more than more than two-thirds of the unemployed have cut back on food expenditures.
Home-equity borrowing is a no starter for many home buyers, since house prices are down by about 25% from their 2006 peak.
Mortgage delinquencies rose to a record in the first quarter, and around one in one in every eight Americans is now either behind on his mortgage payments, or already in foreclosure.
Unlike the average European who has around six months of savings, the average American put aside only 1% of their disposable income in 2005-2006, compared with an average 6% during the previous 30 years, which leaves him or her very unprepared for long-term unemployment.
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I couldn’t help but wonder if journalists were clutching at straws when I read stories today that said things similar to, “Orders for durable goods and home sales probably rose in April as the worst U.S. recession in at least half a century started to loosen its grip”.
What do they mean “probably rose”?
Surely, they did or they didn’t.
Sifting through the reports the good news was;
Orders for goods meant to last several years increased 0.4% making it the second gain in three months.
Combined sales of new and existing homes probably advanced to a 5.02 million annual rate from a 4.93 million pace in March, but again the reports say “probably”.
If true, and not “probable” then the above is good new but a stabilization in housing and manufacturing would help the present economic slump since they are the two areas suffering the biggest contractions. It won’t be possible to maintain these gains however unless banks loosen their purse strings, if unemployment continues to rise.
Surveys suggest that the sales of existing houses, which account for more than 90% of the market, rose 2% in April to a 4.66 million annual rate from a 4.57 million rate and Commerce Department figures are expected to show that new-home sales increased 1.1% to a 360,000 annual rate.
David Resler, who is the chief economist at Nomura Securities International Inc. in New York added to the “probables” and “expecteds” by saying “Evidence that the 16-month recession is coming to an end continues to build. Home sales and building activity seem to be stabilizing and manufacturing surveys point to smaller production cuts and smaller job losses”.
A spokesperson for Toll Brothers Inc., the largest U.S. builder of luxury homes, said last week, “That signs were beginning to emerge that the worst was over”, and “We believe the U.S. government’s forceful intervention in the capital markets has begun to restore some confidence that the financial system is on the road to stabilization”.
So the pundits are now telling us that the recovery is, “probable”, “expected” and “suggested”, and I hope that what they see is their glass balls is correct and that it will all happen soon, but I’d have liked to have seen more definitives.
