Home Prices in U.S. Showed Signs of Stabilizing in June

Residential real estate prices in the U.S. decreased in the year ended in June at a slower pace than in the prior month, a sign the market may be stabilizing.

The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from June 2010, after a 4.6 percent drop in the 12 months ended May that was the biggest since 2009, the group said today inNew York. The median forecast of 31 economists surveyed by Bloomberg News projected a 4.6 percent decline.

Values fell by 0.1 percent in June from the prior month after adjusted for seasonal changes, matching the decrease in May, indicating the deterioration is slowing. Nonetheless, any recovery in home values is probably years away as foreclosures dump more properties onto to the market, while a jobless rate hovering around 9 percent and strict lending rules hurt sales.

“Prices aren’t going to rebound back rapidly,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “Most people think that when the downturn ends the recovery will be pretty good, but that’s not going to be the case at all.”

Another report today showed consumer confidence plunged in August by the most since October 2008 as Americans grew more concerned about job prospects. The New York-based Conference Board’s gauge dropped to 44.5, the lowest reading since April 2009, when the economy was in a recession, the private research group said.

Shares Fall

Stocks fell amid concern the recent rally had gone too far given the U.S. economic outlook. The Standard & Poor’s 500 Index fell 0.9 percent to 1,199.22 at 10:03 a.m. in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 2.17 percent from 2.26 percent late yesterday.

Estimates for the price change from June 2010 ranged from declines of 4 percent to 5.5 percent, according to the Bloomberg survey. The Case-Shiller measure is based on a three-month average, which means the June data was influenced by transactions in May and April.

The year-over-year drop in May was the biggest in 18 months.

Nationally, prices decreased 5.9 percent in the second quarter from the same time in 2010. They increased 3.6 percent from the previous three months before seasonal adjustment and climbed 0.1 percent after taking those changes into account. Property values in the first quarter dropped to the lowest level in almost nine years.

Unadjusted Increase

Prices in the 20 cities climbed before adjusting for seasonal changes, rising 1.1 percent in June from the prior month after climbing 1 percent in May.

The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.

All of the 20 cities in the index showed a year-over-year decline in June, led by an 11 percent drop in Minneapolis.

The smallest 12-month decrease was in Washington, which showed a 1.2 percent drop.

“This month’s report showed mixed signals for recovery in home prices,” David Blitzer, chairman of the S&P index committee, said in a statement. “We are back to regional housing markets, rather than a national housing market where everything rose and fell together.”

With joblessness hovering around 9 percent for a second year, housing has not recovered at the same rate as the rest of the U.S. Existing home sales fell to 4.91 million last year, the lowest level since 1997.

Housing ‘Fragile’

“Consumer confidence is still weak, and the housing sector remains in a fragile state,” Robert Toll, chairman of Toll Brothers Inc. (TOL), the largest U.S. luxury homebuilder, said in Aug. 24 call with analysts. “The nation’s economy continues to suffer from the lack of jobs in housing construction and the related manufacturing and service sectors that a decent new-home market would typically generate.”

Federal Reserve Chairman Ben S. Bernanke, speaking last week in Jackson Hole, Wyoming, said “an overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and ongoing concerns by both potential borrowers and lenders about continued house price declines” have held back the housing market.

During the speech, Bernanke said the economy will probably improve in the second half of 2011, adding the central bank can aid the recovery if needed. Housing will stabilize, “if for no other reason than that ongoing population growth and household formation will ultimately demand it,” the chairman said.

To contact the reporter on this story: Alex Kowalski in Washington atakowalski13@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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Save Time, Save Money, Save the Environment

Recycled tires offer an alternative to wood mulch

You might think the only way to recycle old tires is to fasten a rope or chain to them and hang them from a tree. In fact, there is an entire industry devoted to breaking down and re-using tires in a variety of products.

Ironically, one of the most popular uses for recycled tires is as an alternative to traditional, organic mulch. Liberty Tire Recycling, responsible for recycling approximately one third of America’s discarded tires — turning 130 million tires a year into 1.5 billion pounds of rubber to be used for “innovative, eco-friendly products.”

Rubber mulch from discarded tires has several advantages over traditional mulch:

• Longer lasting— regular organic mulch generally needs to be refreshed and/or replaced once a year or more.
• More cost-effective— although per cubic foot more expensive, because rubber mulch lasts so much longer (some products claim to last more than a decade), it works out to be easier on the wallet.
• Less labor-intensive— rather than re-mulching and over-mulching every season or every year, rubber mulch requires much less maintenance.
• More green— store-bought mulch is made from trees cut down just for that purpose; using rubber mulch not only keeps tons of scrap tires out of landfills, it also conserves the environment by offering an alternative to tree-based mulch.

For more information on rubber mulch, try these resources:

• Pinnacle Rubber Mulch
• Service Magic: Wood v. Rubber Mulch
• The Benefits of Rubber Mulch

WHITE HOUSE CONSIDERS WAYS TO STEM HOUSING WOES

Fri Aug 26, 2011 9:25am EDT

Aug 26 (Reuters) - 
The Obama administration is looking at options for reviving the housing market, an Achilles heel for the struggling U.S. economic recovery. While private-sector expectations have been building that the White House could roll out steps on housing as early as September, an administration official said there were "no plans to announce any major new initiatives at this time."
But the official added that the administration continues to "look for ways to ease the burden on struggling homeowners and to help stabilize the market."
Below are some policies the administration could turn to help the housing sector.
STEM GLUT OF FORECLOSURES
The backlog of unsold homes remains one of the biggest challenges for the administration in trying to boost a housing market still struggling to recover from its 2007 collapse.
Already, the Treasury Department has asked hedge funds, private-equity groups, and institutional investors for ideas on buying and converting foreclosed homes owned by Fannie Mae (FNMA.OB), Freddie Mac (FMCC.OB) and the Federal Housing Administration into rental units. By removing foreclosed homes from the market, the government could help stabilize home prices.
The administration has already allocated $45.6 billion in taxpayer funds to help prevent foreclosures. About $1.2 billion of the money set aside for housing assistance has been spent, according to the Government Accountability Office.
Properties in some stage of the foreclosure process made up nearly one-third of all U.S. homes sold in the second quarter of 2011, according to real estate data firm RealtyTrac.
PRINCIPAL REDUCTIONS, REFINANCE OPTIONS
Several programs already exist to help homeowners refinance mortgages or avert foreclosure. These provide incentives for lenders to alter the terms of loans to make them more affordable.
Under one of the Obama administration's taxpayer-funded housing programs, states have chosen to allocate $1.52 billion to help write down principal.
By the last quarter in 2010, about 11.1 million homeowners, or 23 percent of all owners of residential property, owed more on their mortgages than their home is worth, according to CoreLogic. There are several ways the U.S. government could deal with troubled mortgages on a larger scale.
* The White House may consider a plan to allow millions of homeowners with government-backed mortgages the ability to refinance their loans at historically low rates, the New York Times reported on Thursday, citing two people briefed on the administration's discussions.
* The administration could come up with a plan to forgive the loans and force banks and/or taxpayers to absorb the losses. But this would be hard politically as it would be viewed by many as rewarding irresponsible borrowing behavior.
* The mortgage buyers Fannie Mae and Freddie Mac, which were seized by the government in 2008, could forgive a portion of homeowners' mortgage debt. But their regulator and now conservator, the Federal Housing Finance Agency, has told lawmakers such a move does not meet its goals of conserving the companies' assets.
TAX INCENTIVES
A politically popular program gave qualified buyers in 2008 through 2010 a tax credit of up to $8,000. Nearly 3.9 million taxpayers had received $27 billion dollars from the credit through the end of 2010, according to the Internal Revenue Service.
Since the credit expired, median home prices have fallen. While another tax credit could help the housing market, it would likely not be as politically popular as lawmakers look for ways to fill record budget deficits.
A presidential budget commission last year proposed turning a mortgage-tax deduction into a 12 percent tax credit for buyers. The plan, which languished after being presented to Congress in December, would likely await a broader debate on tax reform, a debate that might heat up when lawmakers return from an August break.
INCREASE CAPS ON LOANS BACKED BY FANNIE, FREDDIE
Congress raised the ceiling on the size of the loans the government can guarantee in 2008 to help ease the credit crisis. The loan limits on mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration is set to fall to a maximum of $625,500 from $729,500 at the end of September.
The administration and Congress could take action by extending the October 1 deadline on the so-called conforming loan limit.
However, most Republicans support returning to the lower loan levels, which would make it more expensive for some borrowers to obtain access to credit. The administration has also signaled a desire to wean the mortgage market from the higher caps.
TWEAK TAXPAYER-FUNDED PROGRAMS TO PREVENT FORECLOSURES
The Obama administration's top program to prevent foreclosures is designed to give homeowners a reprieve by permanently modifying their mortgages.
A total of 657,044 homeowners have won a permanent modified loan as of June -- a fraction of the 3 million to 4 million the administration had initially forecast, according to the Treasury Department. Borrowers have noticeably dropped out of the program and not successfully modified their loans. About 1.6 billion homeowners have started a trial modification since the program began in 2009, while 760,796 distressed homeowners have canceled their involvement.
The U.S. Treasury has stepped up efforts to reach more homeowners by instructing Wells Fargo (WFC.N), Bank of America (BAC.N) and JPMorgan Chase & Co (JPM.N) to improve their modification efforts substantially to merit the financial incentives offered under the program.
The program expires at the end of 2012. Congress would need to pass legislation in order to change the parameters of the program but it is unlikely to do so with Republicans in the House of Representatives trying to kill the program altogether.
Barring any changes, regulators might decide they need to apply more pressure on servicers to modify loans -- something Federal Reserve Chairman Ben Bernanke has said he is doing "when appropriate." ( Reporting by Margaret Chadbourn, Editing by W Simon )

HOME PRICES DECLINE 5.9% IN SECOND QUARTER

By Kathleen M. Howley - Aug 24, 2011
Home prices in the U.S. fell 5.9 percent in the second quarter from a year earlier, the biggest
decline since 2009, as foreclosures added to the inventory of properties for sale.

Prices dropped 0.6 percent from the prior three months, the Federal Housing Finance Agency
said today in a report from Washington. In June, prices retreated 4.3 percent from a year earlier,
while increasing 0.9 percent from the previous month.

Foreclosures are boosting the supply of properties on the market and undercutting the confidence
of homebuyers, sapping demand even as mortgage rates tumble to the lowest in more than half a
century. The U.S. inventory of homes for sale averaged 3.7 million during the second quarter, the
highest since the third quarter of 2010, data from the National Association of Realtors show. The
mortgages on 6.5 million U.S. homes had late payments or were in foreclosure in June, according
to Lender Processing Services Inc. in Jacksonville, Florida.

“Foreclosures water down home prices because banks want to get rid of properties as fast as they
can,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts.
“The key number driving foreclosures is the unemployment rate, and we saw that worsen in the
 second quarter.”

The unemployment rate in the three months ended June 30 rose to 9.1 percent from 8.9 percent,
the first quarterly increase since 2009, according to the Labor Department.

California, Nevada

Home prices in June fell the most in the region that includes California, slumping 8 percent from a
 year earlier, the FHFA said. They decreased 7.9 percent in the area that includes Nevada and
Arizona.

The month-over-month gain in prices exceeded analysts’ forecast of 0.2 percent, the median of 16
estimates compiled by Bloomberg. The region that includes Wisconsin, Illinois and Ohio had the
biggest increase from May, with a 3.3 percent rise.

Mortgage rates for 30-year fixed loans fell to 4.15 percent last week, McLean, Virginia-based
Freddie Mac said. The rate probably will average 4.6 percent this year, lower than 2010’s 4.7
percent, according to Fannie Mae in Washington.

Sales of U.S. previously owned homes dropped in July, reflecting an increase in contract
cancellations due to strict lending rules and low appraisals, Lawrence Yun, chief economist of the
National Association of Realtors, said Aug. 18. Purchases decreased 3.5 percent to a 4.67 million
annual rate, the weakest since November.

Today’s FHFA report measures changes in real estate values using repeat data on individual
properties with mortgages backed by Fannie Mae or Freddie Mac. It doesn’t include a dollar value
for homes. The U.S. median home price was $171,900 in the second quarter, according to NAR.

To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.

Home Owner’s 1-2-3 Guide to Tools

1 Show, 2 Hot New Products, and 3 Handyman Essentials

There’s just something about tools. Whether it’s an 8.5 ounce pocket multi-tool or a 500 pound table saw, nothing beats using a new tool for the first time.

ONE Show

The  DIY Network has dedicated an entire show to the topic, “Cool Tools,” hosted by tool expert Chris Grundy. Covering the new, the improved and the wacky, the show not only offers sneak peeks and reviews of just-released products, it also covers new uses for old tools and the answer to that age-old question — what does WD-40 stand for, anyway?

TWO Hot New Products

From the thousands of products displayed and demonstrated at the 2011 National Hardware Show held this past May in Las Vegas, Popular Mechanics selected just eight as “The Best Tools,” including

• Leatherman Sidekick — at a $40 suggested retail price, this pocket-sized multi-tool (coming to retailers this fall) contains 15 different tools and is made of high quality stainless steel.
• Rockwell VersaCut — Rockwell touts this as “4 Big Saws in one 3 lb cutting machine.” Incorporating Laserguide™ technology to help ensure proper measuring and cutting, the tool comes with three different blades for different materials.

THREE Handyman Essentials

Whether you’re Ms. Fix-it or Tom All Thumbs, you should keep a tool kit with a few essentials handy in your home. Three things no home tool kit should be without:

• Hammer— a heavier hammer may be a little harder to wield, but it means you have to expend a lot less effort
• Screwdriver set— go for a solid set that includes a few sizes of both flat and Phillips head drivers, or choose a single handle with interchangeable bits
• Pliers— needle nose pliers to yank out nails and vice grip pliers to provide leverage when you just… can’t… turn… that (knob, washer, collar, etc.)

For more tool tips, visit these resources:

• Handyman Matters’ Put Together a Basic Tool Kit For Your Home
• MSN Real Estate’s The 15 Tools Every Homeowner Should Own
• BNET: First-class products: 2011 Retailers' Choice Awards recognize the best-of-the-best at the National Hardware Show

Buying is cheaper than renting in most U.S. cities

Buying is cheaper than renting in most U.S. cities

Garage Floor Solutions

3 Ideas for Updating Your Garage Floor

For many homeowners, the garage is not just for cars anymore. Garages are being repurposed to function as workshops, dens, home offices, supplemental storage space and more.

For most any purpose, however, the original garage floor is most likely not going to suffice.

Check out these three options for transforming you ordinary garage floor.

• Epoxy Coating — One of the most popular choices is an epoxy finish. It is a relatively easy do-it-yourself project, requiring only a dry, clean surface with no cracks. Just like paint, you can roll the epoxy finish onto the floor. DoItYourself.com has more information on epoxy finishes, preparation (also see this article from the Washington Post) and installation.
• Interlocking Garage Mats — Even easier to install than epoxy covering, interlocking plastic mats are placed on top of your current floor — cracks and unevenness are not an issue. Depending on the mats you select, these can provide fatigue cushioning, as well as insulation from cold concrete in winter temperatures. For more, visit DoItYourself.com.
• Concrete Stain or Dye— While upgrading the look of an existing concrete floor with stain or dye is not a project for the average handyman (though DIYNetwork.com offers these instructions), the results can be stunning. Staining generally allows for a more narrow color choice than dying your concrete floor. ConcreteIdeas.com has more information.

Whether you are looking to make your floor less slippery, more comfortable, easier to clean, or simply more attractive, any of these garage flooring solutions will make a noticeable difference in your garage.

Photo from Garage Floor Covering.

Too Small, Too Big, Too Windy, Too Sunny, Too Shady?

Solutions to Common Landscaping Challenges

Whether you’re a glass half-empty or a glass half-full homeowner, chances are your outdoor space is not exactly what you wish it were. Landscape experts, however, know how to turn challenges into triumphs.

LandscapingNetwork.com has resources for almost every landscaping challenge out there.

In this featured garden from LandscapingNetwork, a California landscaper plants not only horizontally, but vertically as well, to expand the visual impact of the plantings.

To maximize small landscape spaces:

• Plan for multiple focal points— in a small space, there are often no sweeping vistas, nor is there space to make one grand statement. Turn that to your advantage by planning a variety of small “surprises” in your garden, creating multiple places for the eye to stop and savor.
• Go luxe. — Another advantage to small spaces? Not a lot of materials required, which makes it much easier to splurge on high-quality items. Tile the small patio with gorgeous marble. Place a single beautiful wrought iron bench in a nook. Line the short winding path with sea glass pebbles. In a small space, large gestures are more affordable — and they have a greater impact.

 To make the most of your shady yard:

• The illusion of sun dappled plantings— plant perennials with natural green and yellow coloring. Landscape pros rely on this sleight of hand (or color) to make areas of the yard appear to be catching bits of sunlight.
• Know your perennials — there are plenty of eye-catching flowers and shrubs that thrive in shady rather than sunny conditions. Use them lavishly to bring color and variety to your shaded yard.

For more tips, ideas and designs, see Expert Solutions for Solving Typical Yard and Landscape Challenges on LandscapingNetwork.com.

Unusual Solutions to Simple Problems

6 Creative Ways to Address Common Home Challenges

From insufficient table space to insufficient shelf space, from ugly floor gouges to slamming windows, from mildly annoying to incredibly irritating, every homeowner complaint has a solution, and often more than one. Try these five ideas from Real Simple, Martha Stewart Living and House Beautiful to resolve or even anticipate issues in your home.

From Martha Stewart Living

• Window Prop Stick— an easy DIY project to create a “stepped window prop stick” that will keep your window securely open at various heights; especially useful during the summer months.
•  Make Your Own Outdoor Furniture — learn how to convert a cot into an outdoor daybed or create super easy bases for tiki or solar torches to light up your yard. For more ways to make your own outdoor furniture, click here.

From House Beautiful

• Protect your floors — easier to manage and more secure than felt pads, “Plasti Dip” from the hardware stores is perfect to coat the bottom of your furniture’s legs and bases. For more creative uses for common hardware store items, click here.
• Add surface space — whether for one night of entertaining, or for the long haul, you can never have enough occasional tables; try placing a tray on a footstool, or topping a sturdy vase with a large paver stone or tile. For more ways to transform your room with accessories, click here.

From Real Simple

• Easy Kitchen Shelving — out of space for all your cookbooks? Looking for a spot for your summer picnic supplies? Need a shelf for your potted herb garden? With a few plank shelves from the local lumber store and a ladder, you can add shelving in less than an hour.
• Clever Wall Shelves — bringing a new meaning to “bookshelf,” follow these steps to make your own shelves out of old hard backs.