RE/MAX 440
John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

Rising Incomes to Support Housing Market in 2015

September 30, 2014 1:31 am

The U.S. economy is showing renewed vigor and is poised for a pickup in growth, according to a recent report by TD Economics, an affiliate of TD Bank.

"Job growth is gaining speed and confidence is rising," says TD Chief Economist, Craig Alexander. "The strength in job growth will support consumer spending and energize housing demand, shifting the economy into third gear."

After averaging 2.2 percent in 2014, the economy is forecasted to grow by 3 percent in 2015. With faster growth, the unemployment rate will continue to fall, reaching 5.5 percent by the end of next year.

Stronger job and income growth will support the housing market. "The dearth of new household formations is strongly related to the lack of job opportunities among young people," says Alexander. "As employment rises, the housing recovery should also pick up speed as these first-time buyers come back into the market."

Between January and August, the economy generated over 1.7 million jobs, nearly 300,000 more than the average over the previous three years. The acceleration in job growth has been accompanied by broader signs of labor market improvement. Businesses are reporting high levels of job openings and increasing confidence in the durability of the economic recovery.

With the expected improvement in growth over the next year, the economy is likely to have shown sufficient progress for the Federal Reserve to begin raising short-term rates.

"After almost seven years of zero interest rates, the recovery in 2015 will have finally moved to a stage where rates can begin to move higher," says Alexander. "But, this will occur gradually."

TD Economics expects the Federal Reserve to begin its rate hiking cycle mid next year and bring the fed funds rate up to 0.75 percent by the end of the year. By the end of 2016, the fed funds rate will likely only be at 1.75 percent – still high enough to stimulate the economy.

Source: TD Economics

Published with permission from RISMedia.


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What to Consider before Borrowing Home Equity

September 30, 2014 1:31 am

In the first quarter of 2014, lenders approved $13 billion in home equity loans and lines of credit (HELOCs). Economic conditions have continued to improve, as the recession fueled by underwater mortgages gives way to rising home values across the country.

While this shift signals the beginning of a renewed confidence in borrowing against a home’s equity, homeowners should tread carefully. If you’re considering borrowing, keep in mind these facts.
- With fixed interest rates and payments, home equity loans may be a safer option. HELOCs have variable rates, so an increase may be detrimental to your payment plan.

- Lenders still require adequate income and credit, and most will set a maximum limit of 80 to 85 percent of the home’s value.

- Debtor habits can spell disaster for those who borrow equity against their home. Don’t borrow for unnecessary expenses, such as vacations.

- Homeowners should work toward paying back the loan quickly; however, it is acceptable to extend the life of the loan if making an investment in the home, such as a kitchen renovation.
Source: Bankrate.com

Published with permission from RISMedia.


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