65% of Americans are losing sleep because of money, according to a new CreditCards.com report. The most common worry – expressed by 38% of Americans – is health care or insurance bills. 37% lie awake fretting about saving enough for retirement, 34% because of educational expenses, 26% over mortgage/rent bills and 22% due to credit card debt. Click here for more information:
Health care and educational expenses are the only categories in worse shape now than during the Great Recession. Concerns over health care costs have spiked over the past year (up nine percentage points).
In 2007, just prior to the recession, 56% of Americans said they were losing sleep over one of these five topics. During the recession (2009), the figure jumped to 69%. It fell to 62% each of the past two years and ticked up to 65% this year.
Gen Xers are the most concerned about health care expenditures and saving for retirement. Millennials are the most fearful about outlays for education, housing and credit card debt. These issues are cutting into the slumbers of 73% of Gen Xers, 71% of millennials, 59% of Baby Boomers and 48% of the Silent Generation.
People who are losing sleep over money aren't taking it lying down: 82% reported taking at least one step to improve their financial situation over the past year versus 54% of those who aren't losing sleep. The most common action the insomniacs took was to reduce expenses, followed by selling something, signing up for a new credit card and taking on a second job.
"People lose sleep when things feel out of control," said Matt Schulz, CreditCards.com's senior industry analyst. "Take back some of that control by taking action. Even small moves like making a budget, selling something of value or trimming expenses can make you feel empowered and help you sleep more peacefully at night."
(Source: CreditCards.com)
The housing and neighborhood location choices of immigrants will have a significant impact on urban growth in the US for decades to come, particularly as more foreign-born residents seek to own homes in suburban communities, according to new research from the Urban Land Institute's Terwilliger Center for Housing. Homebuilders and developers who can deliver the housing options immigrants want and need stand to benefit in the years to come.
Home in America: Immigrants and Housing Demand examines the influence of immigrants in shaping urban growth patterns, particularly those who have entered the US since the Great Recession (since 2010, the number of immigrants from Asia has surpassed those from Latin America). "Immigrants have helped stabilize and strengthen the housing market throughout the recovery," said Terwilliger Center Executive Director Stockton Williams. "Immigrants' housing purchasing power and preferences are significant economic assets for metropolitan regions across the country. This suggests the potential for much more growth attributable to foreign-born residents in the years ahead," he added.
Among the key findings from the report:
The findings in Home in America are drawn in part from analyses of the housing and neighborhood preferences of immigrants in five metropolitan areas that represent different types of immigrant gateways:
Home in America notes that foreign-born population growth in most of gateways outpaced overall population growth between 2006 and 2014 (the time period from just prior to the housing market collapse through the housing rally). Emerging gateways, which experienced strong overall population growth, were the only exception. The report also looks at the neighborhood choices of immigrants within the five metro areas, focusing on five categories of suburbs (typologies developed for ULI by RCLCO):
The differences in where immigrants are locating in the five cities is an indicator of how they could influence future growth within these markets, the report says. In San Francisco, immigrants are spread across nearly all types of suburban communities, with the highestpercentage, 35%, living in economically challenged neighborhoods. In Houston, the largest share of immigrants, 39%, live in stable middle-income suburbs, followed by 29% in economically challenged suburbs. In Buffalo, 30% live in established high-end suburbs (a greater share than the native-born population) and 27% live in urban neighborhoods. In Minneapolis, the highestpercentage, 32%, live in economically challenged suburbs, followed by 27% in stable middle-income suburbs. In Charlotte, 27% live in economically challenged suburbs. Nineteen% live in stable-income suburbs and an additional 19% live in established high-end suburbs.
Home in America points out that the presence of immigrants could help boost revitalization in economically challenged suburbs; sustain the success of stable middle-income suburbs; and contribute to the growth and diversity of established high-end suburbs. "If recent shifts in immigration flows continue, an increase in higher-income immigrants – including rising numbers from China and India – could accelerate the demand for homeownership among the foreign-born population," the report says. "Without sustained immigration, the housing market could weaken and in many markets the impact could be dramatic."
(Source: Urban Land Institute)
The latest Global Economic Conditions Survey (GECS) from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants) released last week shows economic confidence rebounding in the first quarter of 2017, an improvement driven by the US where investors are hopeful that a combination of fiscal reform, increased investment in infrastructure and deregulation will provide a boost to economic growth.
The report is the largest regular economic survey of accountants around the world, and noted business conference at its highest level since the second quarter of 2015. Though driven by the US, the improvement in confidence was widespread, with most countries and regions, including Western Europe, Asia Pacific, and Central and Eastern Europe showing improvements.
The survey of finance professionals and business leaders worldwide noted that Q1 2017 displayed the fastest rate of growth in global trade since 2015. The survey found that the biggest concern for companies over the past three months was increased costs (a problem for 46% of respondents), consistent with rising headline inflation rates in many parts of the developed and developing worlds. Despite this there are significant improvements for employment and investment, with 22% of firms planning to create more jobs and raise capital expenditure (up from 16% and 14% respectively in Q4 2016).
"The rise in confidence, combined with strong economic hard data, offers genuinely encouraging signs for the global economy: with an increasingly optimistic mood in the US and a stimulus-led recovery in China driving prospects for world trade," said Faye Chua, head of business insights at ACCA. "This strong start to the year has taken place against a backdrop of potential threats facing the world economy at the start of 2017."
Added Raef Lawson, executive vice president at IMA: "The US economy has maintained an elevated level of confidence from Q4 in 2016, with 37% of firms feeling more confident, although there was no uplift from the previous quarter. An expectation of increased infrastructural spending and tax cuts has contributed to a buoyant business mood even though they are yet to materialise into policy."
However, Mr. Lawson continued: "Inflation and currency fluctuations, however, are a cause for concern. 43% of US firms are troubled by rising costs, and 22% by exchange rate movements. Despite the Fed's interest rate hikes, borrowing costs in the developing world remain low, and the dollar is likely to continue growing in value. That could pose a challenge to US firms' competitiveness, and the White House's determination to reduce the trade deficit."
The survey found that in the United States, confidence remained flat but elevated; in Q1 2017, 37% of respondents were more confident about the future, compared with 24% who were less confident. This buoyant overall level of confidence comes on the back of a surging stock market, which has risen to record highs on the back of confidence that a fiscal stimulus and wave of deregulation will provide a boost to economic growth.
US respondents reported confidence that a big increase in government spending is on the way. Other components of the GECS – government spending, capital spending, and employment – also rose in the first quarter. The main concern for US companies is rising costs—cited by 43% of respondents—which is consistent with a recent, sharp rise in inflation and wages as the US economy moves closer to full capacity.
The negative impact of exchange-rate movements (cited by 22% of respondents) was another concern. US interest rates are set to rise this year, but borrowing costs in the rest of the developed world are likely to remain very low, so, the survey noted, it's possible that the US dollar will appreciate in the coming months; this will erode the competitiveness of US-based companies.
GECS is the largest regular economic survey of accountants around the world. Fieldwork for the Q1 2017 GECS took place between February 24 and March 13, 2017 and attracted 1,334 responses from ACCA and IMA members around the world, including more than 150 CFOs.
(Source: ACCA)
Mortgage rates in the US were only slightly changed this week, with the benchmark 30-year fixed mortgage rate inching higher to 4.30%, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.26 discount and origination points.
The larger jumbo 30-year fixed also nosed higher, to 4.23%, while the average 15-year fixed mortgage rate held steady at 3.49%. Adjustable mortgage rates were also subdued, with the 7-year ARM holding at 3.68% and the 10-year ARM slipping to 3.85%.
Mortgage rates were in a holding pattern, along with seemingly everyone and everything else as legislative gridlock in Washington reasserted itself. Skepticism in financial markets has increased about the ability for meaningful tax reform or infrastructure spending to materialize in the near term, holding bond yields and mortgage rates in check. Mortgage rates are closely related to yields on long-term government bonds. But the continued trend of solid economic data could begin to offset this and push mortgage rates higher in the week ahead.
At the current average 30-year fixed mortgage rate of 4.30%, the monthly payment for a $200,000 loan is $989.74.
Survey results
30-year fixed: 4.30% -- up from 4.29% last week (avg. points: 0.26)
15-year fixed: 3.49% -- unchanged from last week (avg. points: 0.22)
5/1 ARM: 3.49% -- up from 3.44% last week (avg. points: 0.29)
The survey is complemented by Bankrate's weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The majority of panelists, 64%, expect mortgage rates to remain more or less unchanged in the coming week. The remainder are evenly split, with 18% predicting an increase and 18% forecasting a decline in mortgage rates over the next week.
(Source: Bankrate.com)
According to the annual Business Pulse Survey by SunTrust Banks, Inc., nearly two-thirds of business leaders expect the global and US economy to improve through 2017. Even more optimistic about their own companies, as 75% of middle market (annual revenue of $10-150 million) and small business (annual revenue of $2-10 million) leaders feel their business outlook is strong. Both segments have high expectations for healthcare (46%) and tax reform (44%) as a catalyst for growth. Mid-market leaders also cite reducing regulations (39%) and investments in infrastructure (37%) as ways to spur business momentum.
"This year, business leaders are feeling very prepared to take advantage of growth opportunities, 75% believe they have access to the critical capital needed," said Allison Dukes, Commercial and Business Banking executive at SunTrust. "Three out of four have a goal-setting process linked to long-term growth strategies and are comfortable that they will achieve their goals."
In 2017, the short term priority for 31% of mid-market companies is profitability, a 29% increase since 2016; while 34% of small businesses are focused on revenue, a 54% increase from last year.
Looking out five years, introducing a new product or service is still the top long-term strategy to stimulate growth for both mid-market (40%) and small business leaders (31%), while making a major capital investment (31%) and acquiring another company (17%) is a greater priority for the mid-market. To undertake these initiatives, common strategies include using cash on hand, reducing costs, obtaining a bank loan and reinvesting corporate earnings.
"Over the past four years, businesses in the small and mid-markets have taken incremental steps toward growing their companies, including M&A, hiring, and improving cash flow. At SunTrust, our purpose is to Light the Way to Financial Well-Being for our clients, and we have been working with them to ensure they have the tools and capabilities to grow their business in a smart way. Now, they see an opportunity for significant structural changes in taxes and regulations to unleash additional business growth," added Dukes.
Decision-makers representing more than 500 small and mid-size businesses participated in the SunTrust/Radius Global Market Research survey. Survey results have a maximum margin of error of +/- 5 percentage points at a 90% confidence level.
(Source: SunTrust Banks, Inc.)
Growth expectations for 2017 remain subject to both upside and downside risks from potential policy changes as the Federal Reserve considers raising interest rates for the second time in three months, according to the Fannie Mae Economic & Strategic Research (ESR) Group's March 2017 Economic and Housing Outlook. Full-year economic growth is projected at 2.0 percent, unchanged from last month, while the forecast for current quarter growth is down slightly due to weaker-than-expected consumer spending data. Still, general business and economic sentiment remain strong despite policy uncertainty.
Thanks to rising household net worth and healthy jobs data, consumer spending should remain the primary driver of growth. A pickup in the Fed's favoured measure of inflation in January supported several Fed officials' hawkish speeches, which led the market to fully price in a rate hike at the conclusion of the Fed meeting later today. The ESR Group expects today's target rate increase to be followed by two additional hikes in the second half of the year. Home sales should continue to improve this year despite affordability challenges, including continued strong home price appreciation due to scarce inventory.
"Our economic forecast remains in a conservative holding pattern as we await word on the particulars of the new Administration's plans for fiscal stimulus," said Fannie Mae Chief Economist Doug Duncan. "In the meantime, economic sentiment from most industry stakeholders continues to reach new heights: consumers, as demonstrated by our National Housing Survey, are more positive than at any time since the survey's inception in 2010 about the direction of the economy, while homebuilders' optimism remains near an eleven-year high."
"Tight inventory remains a boon to home prices and Americans' net worth, but it also continues to price out many would-be first-time homebuyers. However, our research suggests that aging millennials, now boasting higher real wages, are beginning to narrow the homeownership attainment gap," said Duncan.
(Source: Fannie Mae)
TaxTalent recently released its most important tax staffing report of the year. The 2017 Global Tax Market Assessment identifies a potential perfect storm that could cause significant disruption for the tax industry in 2017.
Data indicates another thirty-year transformation cycle could result from major tax reforms.
The 2017 Global Tax Market Assessment is produced in conjunction with TaxSearch, Inc. and British-based BPA and forecasts global tax market trends and their effect on staffing, retention, and talent development within corporate tax departments.
According to Tony Santiago, president of US-based TaxTalent and TaxSearch: "This is a critical time for corporate tax functions to pay attention to what could be a major market shift. We believe there are three major trends that, if combined, could have a big impact on the tax industry in the near future."
The three potentially disruptive market trends include:
Santiago stresses that tax and finance leaders need to be prepared by looking at past data as evidence of another thirty-year disruption cycle. "It appears we could be entering another major market transformation like those experienced in 1986 and 1954. Corporate tax professionals need to be aware of these potential market changes so they can prepare their tax departments and be equipped to respond to any fallout from this situation."
Key Results from the 2017 Global Tax Market Assessment:
(Source: TaxTalent)
Uber has recently received a permit from the California Department of Motor Vehicles to test its robot cars in the state and Consumer Watchdog warned that the cars should not carry passengers while still being tested.
"When Uber illegally deployed its robot cars in San Francisco last year, the vehicles were observed driving through red lights," said John M. Simpson Consumer Watchdog's Privacy Project Director. "Uber's technology simply isn't safe enough to put passengers at risk."
Under California law companies testing self-driving cars with a permit in the state must file reports of any crashes and annual "disengagement reports" describing when the robot technology failed and a human operator had to intervene. Both reports are posted on the DMV's website.
"Now that Uber has permits to test, the company's activities must be closely monitored by police," Simpson said. "What is clear is that Uber must not use passengers as human guinea pigs as part of a publicity stunt."
Consumer Watchdog asked people in San Francisco to watch out for traffic violations and safety threats by Uber's test vehicles. "If you see something, say something," Simpson said. Send reports to: UberSF@consumerwatchdog.org.
(Source: Consumer Watchdog)
Data through January 2017, released by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, shows the composite rate up three basis points from the previous month at 0.92% in January. The bank card default rate recorded a 3.21% default rate, up 26 basis points from December. Auto loan defaults came in at 1.06%, up three basis points from the previous month. The first mortgage default rate was 0.72%, up one basis point from December.
All five major cities saw their default rates increase in the month of January. Miami had the largest increase, reporting 1.67%, up 14 basis points from December. Miami's composite default rate is at a 31-month high. Dallas and Los Angeles both reported eight basis point increases from the previous month at 0.75% and 0.80%, respectively, in January. Chicago saw its default rate increase five basis points to 1.03%. New York reported a default rate increase of one basis point from the last month at 0.88%.
When comparing the bank card default rates among the four census divisions, the default rate in the south is considerably higher than the other three census divisions.
"While consumer credit default rates on mortgages and auto loans remain low and stable, default rates on bank cards have popped up to the highest level seen since July 2013," says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "Recent data point to consumer optimism: retail sales rose 5.5% in January 2017 compared to a year earlier, consumer sentiment measures rose over the last two years, and employment and labor market conditions are favorable. Federal Reserve data on consumer credit and mortgage debt outstanding reveal that consumers are borrowing money.
"Current default levels do not present any immediate concerns for the economy. During 2004-2006, a period of strong retail sales and consumer spending, bank card defaults were higher than today. Moreover, even if interest rates were to increase much faster than the Fed or most analysts currently expect, the cost of borrowing money is unlikely to create problems for consumers. The weak spot, if there is one, would come with a rise in unemployment and an economic downturn."
The table below summarizes the January 2017 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.
| S&P/Experian Consumer Credit Default Indices | ||||
| National Indices | ||||
| Index | January 2017 Index Level |
December 2016 Index Level |
January 2016 Index Level |
|
| Composite | 0.92 | 0.89 | 0.96 | |
| First Mortgage | 0.72 | 0.71 | 0.84 | |
| Second Mortgage | 0.48 | 0.41 | 0.65 | |
| Bank Card | 3.21 | 2.95 | 2.52 | |
| Auto Loans | 1.06 | 1.03 | 1.04 | |
| Source: S&P/Experian Consumer Credit Default Indices | ||||
| Data through January 2017 | ||||
The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:
| Metropolitan Statistical Area |
January 2017 Index Level |
December 2016 Index Level |
January 2016 Index Level |
|
| New York | 0.88 | 0.87 | 1.04 | |
| Chicago | 1.03 | 0.98 | 1.02 | |
| Dallas | 0.75 | 0.67 | 1.11 | |
| Los Angeles | 0.80 | 0.72 | 0.72 | |
| Miami | 1.67 | 1.53 | 1.17 | |
(Source: S&P/Experian Consumer Credit Default Indices)
US mortgage rates jumped last week, with the benchmark 30-year fixed mortgage rate moving to 4.35%, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.25 discount and origination points.
The larger jumbo 30-year fixed climbed to 4.34%, while the average 15-year fixed mortgage rate rebounded to 3.51%. Adjustable mortgage rates also moved upward, with the 5-year ARM notching higher to 3.51% and the 7-year ARM stepping up to 3.73%.
Mortgage rates moved higher following increases in two different inflation measures – the Producer Price Index and the Consumer Price Index – and Fed Chair Janet Yellen's testimony to Congress that waiting too long to raise interest rates "would be unwise." With this week's move, the benchmark 30-year fixed mortgage rate reset a new high water mark since May 2014. The two inflation readings and strong results on retail sales for both December and January indicate an economy gaining momentum. Coupled with near full employment and the prospect of government stimulus, Janet Yellen reiterated the need to raise interest rates further. The timing however, remains uncertain. But within a 24-hour span following Yellen's initial comments to the Senate Banking Committee and the release of the retail sales and consumer price data, the odds of a March rate hike doubled from 13% to 26% according to trading in Fed funds futures.
At the current average 30-year fixed mortgage rate of 4.35%, the monthly payment for a $200,000 loan is $995.62.
SURVEY RESULTS
30-year fixed: 4.35% -- up from 4.27% last week (avg. points: 0.25)
15-year fixed: 3.51% -- up from 3.49% last week (avg. points: 0.22)
5/1 ARM: 3.51% -- up from 3.46% last week (avg. points: 0.26)
(Source: Bankrate.com)
Commercial real estate industry executives are optimistic about Q1 market conditions while taking a "wait and see" approach to new Administration policies and potential tax reform, according to The Real Estate Roundtable's Q1 2017 Economic Sentiment Index released this week.
"The Trump Administration and a new Congress are aiming to unshackle the economy by focusing on growth-oriented policies," said Roundtable CEO and President Jeffrey D. DeBoer. "As our Q1 Sentiment Index shows, leaders in commercial real estate are cautiously optimistic about what policy changes may bring, yet concerned about any potential unintended consequences that could threaten real estate's vast contributions to the US economy."
The Roundtable's Q1 2017 Sentiment Index registered at 55 — seven points up from the last quarter. [The Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive.] This quarter's Current-Conditions Index of 55 increased four points from the previous quarter, and rose 1 point compared to the Q1 2016 score of 54. However, this quarter's Future-Conditions Index of 55 rose nine points from the previous quarter and is up 10 points compared to the same time one year ago, when it registered at 45.
The report's Topline Findings include:
Although 36% of survey participants said asset prices increased "somewhat higher" compared to one year ago, 43% of respondents said they expect generally flat valuations a year from now — reflecting the view that many believe pricing has stabilized for certain property types. Some also noted that inflows of private capital currently favor equity to debt, dependent on the quality of the property.
DeBoer added: "The Real Estate Roundtable and its members want to advance policies that will spur job creation and economic growth, always guided first by research, data and reasoned analysis that inform policymakers' understanding of all issues, particularly when making choices that affect real estate. We hope our information will assist the policy discussion as lawmakers continue to charge forward on proposals that could have an enormous impact on our nation's growth, prosperity and national security."
Data for the Q1 survey was gathered in January by Chicago-based FPL Associates on The Roundtable's behalf.
(Source: The Real Estate Roundtable)
It's not just citizens of seven Muslim-majority countries who are facing a US-enforced travel ban.
Under new rules, American citizens too could soon be banned from travelling by having their passports revoked for unpaid taxes, warns the boss of one of the world's largest independent financial advisory organizations.
Nigel Green, founder and CEO of deVere Group, is speaking out as the America's Internal Revenue Service (IRS) publishes details on its website of new powers to revoke US passports for taxes that remain unpaid.
He comments: "As President Trump hits out at the judge who has blocked his travel ban for citizens of seven Muslim majority countries, there are more travel complications from US authorities being introduced – ones that could prevent US citizens from travelling internationally.
"The IRS is to have a new tool to collect taxes. The new law will use the threat of stopping people being able to travel by revoking passports if there are unpaid taxes. It was passed by Congress in 2015 and details are now on the IRS website."
Mr Green continues: "If you have seriously delinquent tax debt, the IRS can certify that to the State Department. The Department generally will not issue or renew a passport to you after receiving certification from the IRS. The IRS website confirms that certifications will begin in early 2017."
He goes on to say: "This latest move would likely affect Americans living abroad most acutely for two reasons.
"First, because they would typically use their passports more often – not only for travel but for administrative matters, such as rental contracts, in their countries of residence.
"And second, since the worldwide rollout of the highly controversial Foreign Account Tax Compliance Act, or FATCA, in 2014, tax returns have become more complex, onerous and burdensome for US expats due to additional reporting requirements.
"Indeed, in our experience of working with US citizens who live abroad, 35 per cent are now likely to make a mistake on their tax return and/or file late due to the new complexities."
Mr Green concludes: "For US citizens who are resident overseas, the IRS' latest weapon to collect taxes, means it is more important than ever to stay on top of your taxes and file on time and correctly.
"With this in mind it's recommended that before submitting their tax returns they have them checked by an advisor with the relevant cross-border experience."
Mr Green concludes: "FATCA is a toxic law on many levels and there are renewed and strengthened efforts being made to have it repealed. But until that happens, Americans overseas must adhere to the FATCA rules or face the heavy consequences."
Earlier this week, the deVere CEO launched the Washington-based Campaign to Repeal FATCA, and with co-leader, Jim Jatras, a leading authority on FATCA, is assembling a team of experienced DC professionals to push the repeal effort over the top.
(Source: deVere Group)
