There are several reasons to remain skeptical, though, that this recovery will both be swift and will fuel economic growth that will help pull the U.S. farther from the edge of a new recession. Goldman’s economics research team understands that much of the improvement in housing markets can be attributed to a fall in the percentage of distressed transactions, which accounted for 50% of sales in 2009 and has now fallen to 25%
2--Home Equity Loans Make Comeback Fueling U.S. Spending, Bloomberg
After six years of declines, lending for so-called Helocs will rise 30 percent to $79.6 billion in 2012, the highest level since the start of the financial crisis in 2008, according to the economics research unit of Moodyâ€™s Corp. Originations next year will jump another 31 percent to $104 billion, it projected....
The median U.S. home price will probably gain 8 percent this year, the fastest pace of growth since 2005, according to the Mortgage Bankers Association in Washington. The amount of equity homeowners had in the second quarter rose by $406 billion to $7.3 trillion, the highest level since 2007.
3---Vital Signs Chart: Stalling U.S. Incomes, WSJ
U.S. incomes stalled this year after rising toward the end of 2011. Real median household income was up 1.2% on a seasonally adjusted basis in October from this year’s low of $50,757 in April. That’s according to a new study of Census data. At $51,378, median income is slightly above its year-ago level of $51,089, but well below the prerecession level of $54,761 in October 2007.
4---Mark Carney appointed next BoE Governor: what the papers say, Telegraph
Canada has lost a "rock star" banker who will face his first real test when he takes the top job at the Bank of England next year. Here's what the Canadian press have been saying about his appointment...
If one of the jobs of central bankers is to take away the punch bowl just as the party gets going, Mark Carney is shirking his responsibilities in Canada. The governor of the Bank of Canada has been summoned by Her Majesty the Queen to take over the Bank of England, to which he will depart in June, 2013, likely without having to face the challenge of raising Canadian interest rates from ground zero. Mr. Carney put them there some four years ago, and now he is leaving as a policy hero with the punch bowl still full and the party yet to get underway. We know not where Mr. Carney’s monetary policies will ultimately lead Canada.
Instead of seeing his policies through, Mr. Carney is departing for a bigger place where the uncertainties are even greater. A master of jargon, a highly skilled communicator and obviously bursting with ambition, Mr. Carney will face his first real test as a leader, policymaker and communicator. Canada is a country club by British banking standards, and Mr. Carney has already picked some enemies.
5---The “fiscal cliff” fraud, WSWS
There is bipartisan agreement between the two corporate-controlled parties to slash social programs upon which tens of millions of working people rely for health care and retirement income. The main issue under debate is how to package the cuts so as to best confuse public opinion and obscure what is really happening.
In this, President Obama is taking a leading role. His primary concern is to make the slashing of social programs that keep millions out of poverty seem necessary, while providing this reactionary attack with a fig leaf of “fairness.....
Obama’s call for a token increase in taxes on the highest earners, whether in the form of an increase in the top tax rate or some lowering of deductions, is nothing but a smokescreen. Any slight tax increase that might initially be imposed on the rich would be more than offset by the “comprehensive tax reform” supported by both parties
6---Housing Recovery Is Leaving Behind First-Time Buyers, CNBC
Current homeowners are finally moving up, and distressed sales are making up less of the overall market—all signs of much-needed improvement in housing.
Current homeowners accounted for 54 percent of October’s non-distressed market, up from 50 percent in June, according to a new survey by Campbell/Inside Mortgage Finance.
This as the share of non-distressed sales surged to 64.7 percent, up from 55.7 percent as recently as February.
Unfortunately, first-time home buyers are seeing just the opposite, largely left out of this surge in sales and prices. Their share of the market, usually up in the 40 percent range historically, fell to 34.7 percent in October, the lowest in the Campbell/IMF survey’s three-year history.
The National Association of Realtors put their share even lower, at 31 percent.
Either way, they are the only group of buyers that have not seen their share of non-distressed home purchases rise over the past five months. The mortgage of choice for these buyers, FHA-insured loans, are increasingly tough to obtain. (Read More: Yes, Housing Starts Surge, but Rentals Are the Drivers)
“Financing of first-time homebuyers with low down payments threatens to become a significant problem in the U.S. housing market,” wrote Thomas Popik, research director for Campbell Surveys. “Fifty percent of first-time homebuyers use FHA financing, but FHA insurance premiums are increasing and underwriting is becoming more strict. Private mortgage insurance has started to fill the gap, but the long-term status of private mortgage insurance is in question pending the publication of the Qualified Residential Mortgage regulation resulting from Dodd-Frank.”
7---Case-Shiller shows home prices rise again, marketwatch
U.S. home prices rose in September for the sixth month, signaling that the housing market is "in the midst of a recovery," according to the S&P/Case-Shiller home-price index released Tuesday. The S&P/Case-Shiller 20-city composite posted a 0.3% increase in September following a 0.8% gain in August. Home prices are up 3% from the prior year. "We are entering the seasonally weak part of the year. Despite the seasons, housing continues to improve," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. Among the 20 cities tracked by the index, 13 posted monthly gains in September. Tuesday's report on home prices is the latest news on a strengthening housing market. There have also been recent gains in new construction, home-builder sentiment, and existing-home sales. However, while persistently low mortgage rates are attracting some buyers, consumers still face tight credit standards, and officials say factors such as tight lending terms will block a powerful housing recovery. Indeed, despite recent gains, prices are about 30% below peak levels in 2006, according to Case-Shiller data.