Fed Chair Appears Ready to Lower Interest Rates

Fed Chair Appears Ready to Lower Interest Rates

A China trade war is less imminent and employment strong, but Fed Chair Powell still told Congress that he’s prepared to cut interest rates, possibly this month.
NEW YORK – Federal Reserve Chairman Jerome Powell signaled to Congress on Wednesday that the central bank is prepared to cut interest rates as soon as this month despite an improved employment picture and less incendiary trade battle with China.
Testifying before the House Financial Services Committee, Powell noted that in June, Fed policymakers believed the case for lower rates had strengthened amid the trade tensions, a slowing global economy and muted inflation.
“Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook,” Powell said in his prepared testimony.
He later added, “We see the economy as being in a good place, and we’re committed to using our tools to keep it there.”
The testimony appears to signal that the Fed is poised to act despite a somewhat more stable economic landscape.
Last week, for example, the Labor Department reported 224,000 job gains in June, up from a disappointing 72,000 the prior month. And President Donald Trump’s summit with Chinese President Xi Jinping at the G-20 meetings yielded a truce that has Trump deferring a 25% tariff on the remaining $300 billion in Chinese imports not already hit with duties as the two countries continue talks.
Asked by Rep. Carolyn Maloney, D-N.Y., if the strong jobs report has changed the Fed’s outlook, Powell said, “No. We look at a broad range of data.” He added that weakness in Europe and Asia “continues to weigh” on the Fed’s view.
Similarly, Powell noted that despite the reduced volatility in the trade fight with China, the broader standoff between the two countries is unresolved.
“It doesn’t remove the uncertainty that we see,” he said.
And other risks to growth still loom, Powell noted, including a slowing global economy and muted inflation that’s below the Fed’s 2% annual target. As a result, fed fund futures markets still are pricing in a quarter point rate cut at the Fed’s late July meeting, though that’s down from expectations for up to a half-point cut before the summit and June jobs report.
Powell would not specify whether Fed policymakers are leaning toward a quarter or half point cut late this month. “We’ll be looking at a full range of data,” he said, adding that fresh estimates of retail sales and economic growth will be among the data released in coming weeks.
High Frequency Economics expects a quarter-point cut this month and a similar move in September while Capital Economics forecasts a total of three such moves by March.
Powell’s testimony largely echoed his remarks and the Fed’s policy statement after a meeting last month. The central bank left rates unchanged but indicated it was poised to cut them as soon as a July 30-31 meeting amid the growing risks “to sustain the expansion.”
Copyright 2019, USATODAY.com, USA TODAY, Paul Davidson

How Flood Insurance Works: 6 Questions Answered

How Flood Insurance Works: 6 Questions Answered

What is flood insurance? Homeowners’ insurance doesn’t cover damage to a home caused by flooding; instead, a separate policy is needed to cover flood-related losses, defined as caused by water traveling along or under the ground.  
How does flood insurance work? Robert W. Klein, an expert from Georgia State University in Atlanta, Georgia, answers questions about the topic.

1. What is flood insurance?

Homeowners’ insurance does not cover damage to a home caused by flooding. A homeowner must have a separate policy to cover flood-related losses, defined as water traveling along or under the ground.
Most such policies are underwritten by the National Flood Insurance Program, which is part of the Federal Emergency Management Agency. The National Flood Insurance Program was established in 1968 to address the lack of availability of flood insurance in the private market and reduce the demand for federal disaster assistance for uninsured flood losses. Another purpose was to integrate flood insurance with floodplain management, which includes such things as adopting and enforcing stricter building codes, retaining or restoring wetlands to absorb floodwaters and requiring or encouraging homeowners to make their homes more flood-resistant.
The National Flood Insurance Program’s activities are funded largely by the premiums and fees paid by its policyholders, supplemented by a small amount of general funds to help pay for flood risk mapping. Because the National Flood Insurance Program serves the public interest, some believe that more of its funding should be borne by taxpayers.
Homeowners can purchase a federal flood policy directly from the National Flood Insurance Program or through a private insurer. Separately, some private insurers sell their own flood policies on a limited basis for properties that are overcharged by the National Flood Insurance Program.

2. How many American homeowners have flood insurance?

It is difficult to determine exactly how many homeowners have flood insurance.
The National Flood Insurance Program had just under five million policies in force as of June 30. Of these policies, approximately 68% were on single-family homes and 21% on condo units. There is no source on how many private flood policies are in force, but my sense is that it is very small relative to the number of National Flood Insurance Program policies.
In recent years, the number of such policies has been dropping across the country. Some of the counties hardest hit by Harvey, for example, such as Harris (which includes Houston), have experienced significant declines.
A more revealing – and more difficult to ascertain – stat is the share of homeowners in a disaster area who actually have flood insurance. In Harris County, for example, experts estimated that only about 15% of homeowners were insured for floods – though the percentage was higher in areas near coastlines.

3. Why do people at great risk of flooding forgo insurance?

A number of factors affect a homeowner’s decision to buy flood insurance (or not).
People who perceive that their exposure to floods is high are more likely to buy it, all other things equal. And the mandatory purchase requirement forces owners of mortgaged homes located in Special Flood Hazard Areas – areas at high risk for flooding – to buy insurance.
However, 43% of homeowners incorrectly believe that their homeowners’ insurance covers them for flood losses.
Other factors also come into play, such as a lack of information, the difficulty of calculating flood risk and the expectation that the government will provide disaster assistance – which is rarely the case.

4. What does flood insurance cover?

With a National Flood Insurance Program policy, a homeowner can purchase coverage on a dwelling up to U.S. $250,000 and the contents of a home up to $100,000. It does not cover costs associated with “loss of use” of a home.
The National Flood Insurance Program policy limits have been in effect since 1994 and need to be updated to account for the increase in the replacement cost of homes and the actual cash value of their contents. Although not the best measure of the replacement cost, the median price of new homes sold in the U.S. has soared 132 percent since 1994.
Some homeowners buy additional flood protection from private insurers to make up any shortfall.

5. Why is the National Flood Insurance Program underwater?

The National Flood Insurance Program has faced considerable criticism over its underwriting and pricing policies, which have resulted in a substantial debt. Essentially, its premiums are not high enough to cover how much it pays out on claims and its other costs.
Part of the problem is that about 20% of the properties the program insures pay a subsidized rate. But many other National Flood Insurance Program policyholders are also paying premiums substantially less than what it costs to insure them because the rates do not adequately account for the catastrophic losses incurred during years when more major storms than normal strike, such as Katrina and Rita in 2005 and Sandy in 2012. As a result, the National Flood Insurance Program currently owes an accumulated debt of about $20 billion to the U.S. Treasury.
In the short term, Congress will have to increase the National Flood Insurance Program’s borrowing authority for it to pay the claims.
These inadequate rates also exacerbate the moral hazard created by flood insurance. People are more likely to buy, build or rebuild homes in flood-prone areas and have diminished incentives to invest in flood risk mitigation, such as by elevating their home, if they can buy insurance at below-cost rates.

6. What can be done to fix the program?

Legislative efforts to reform the National Flood Insurance Program to put it on firmer fiscal footing have produced mixed results.
Fundamentally, the program millions of Americans rely on to help them rebuild their lives after a devastating flood needs to be fixed. Its dire financial straits could be resolved by either making taxpayers foot more of the bill or increasing premiums closer to full-cost rates for most homeowners, while also raising total coverage levels.
At the same time, the government needs to do more to convince or compel more at-risk homeowners to buy flood insurance – which would be harder to do if it were to raise rates. To me, this suggests that increasing taxpayer support for the NFIP will have to be part of the solution so that pricey premiums don’t become a deterrent to someone buying insurance.
With the likelihood of much more flooding in the coming weeks and years, more needs to be done to mitigate the risk, including producing more accurate and timely maps of the flood risk in various areas, especially high-risk areas, educating people about what those risks really mean and helping relocate homeowners as necessary.
Copyright © 2019, The Conversation, under Creative Commons. All rights reserved.

Have an Idea to Help Fight Toxic Algae? Tell Fla. Officials

Have an Idea to Help Fight Toxic Algae? Tell Fla. Officials
The Department of Environmental Protection is formally accepting information until July 15 on ways to prevent, combat or clean up harmful freshwater algal blooms.
TALLAHASSEE, Fla. – Experts looking into toxic algae outbreaks that have exploded in state waterways want to know if anyone has a proven, innovative cleanup strategy that can be used.

And they want to know quickly.

The Florida Department of Environmental Protection is formally accepting information through July 15 on ways to prevent, combat or clean up harmful algal blooms in freshwater bodies and estuaries.

Thomas Frazer, Florida’s chief science officer, said Monday during a state Blue-Green Algae Task Force meeting in Fort Myers that he and other officials at the state department have already been fielding calls from people with ideas about fighting the algae.

“I wouldn’t want to limit the people who have expressed interest,” Frazer said. “There are times that people may not have a ton of preliminary data … but sometimes there are really good ideas.”

The better ideas will go before the task force at its Aug. 1 meeting, Frazer said.

Gov. Ron DeSantis issued an executive order in January to create the task force in response to outbreaks of toxic algae and red tide across the state last year. The source of outbreaks in Florida and the Gulf of Mexico is blooms of a single-celled organism called Karenia brevis algae, which produces toxins that kill fish, birds, sea turtles, manatees and dolphins, and can cause shellfish poisoning in humans.

The problems particularly drew attention in Southeast and Southwest Florida, as algae plagued water bodies such as the St. Lucie and Caloosahatchee rivers and red tide caused fish kills.

Frazer said the task force won’t be asked to pick proposals or vendors but to determine if projects have merit to move forward for potential state grant funding. Frazer said officials are open to “all different kinds of potential solutions,” which could mean chemical, biological, mechanical ideas or any combination of those methods.

As part of a request for information, more than 35 questions are asked, from potential environmental impacts to the size of water bodies that could be effectively treated.

“With regard to cleanup, specifically, we want to make sure the technology provides near-term ecological and human health relief,” Frazer said.

Some people making proposals could be asked to appear before the task force to answer questions about their proposals.

Frazer said additional people may even be needed to review the viability of proposals. Part of the grant-making process will be determining who is behind proposals because some information could come from more than one person.

The focus of the task force is Lake Okeechobee and waters on both sides of the lake, but the state is also looking at possible algae impacts as far north as the St. Johns River.

As part of the $90.98 billion budget for the fiscal year that began on Monday, $4 million is slated to go to expanding “statewide water quality analytics for the nutrient over-enrichment analytics assessment and water quality public information portal.”

Separately, a new law (SB 1552) provides $3 million a year for the next five years to the Florida Red Tide Mitigation and Technology Development Initiative to research the causes and impacts of red tide. The initiative was created between the Florida Fish and Wildlife Conservation Commission’s Fish and Wildlife Research Institute and Sarasota-based Mote Marine Laboratory.

Source: News Service of Florida, Jim Turner

Countertops, flooring and lighting costs going up

Countertops, flooring and lighting costs going up

 
WASHINGTON – May 14, 2019 – If the U.S.-China tariff war lasts, builders and contractors say that new tariffs on Chinese goods will add $2.5 billion in added costs to the home remodeling industry – and those extra costs will be passed on to customers.
Tariff costs on Chinese imports jumped from 10 percent to 25 percent on May 10, which builders say will increase the cost of about 450 goods used by the home building industry, such as countertops – like granite, marble and quartz – tile for bathrooms and backsplashes, light fixtures, cabinets, heating and cooling equipment, and flooring.
"I wish we would not just have to pass it along to customers, but at this point I don't know how to engineer around that," Bruce Case, CEO of Case Remodeling, told CNBC. "We can't use different products that aren't as effective."
The White House has increased tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the homebuilding industry. U.S. and Chinese officials ended two days of trade talks without a deal on Friday. China was the United States' biggest trading partner last year.
Last week, a survey from the National Association of Home Builders also showed that a labor shortage continues to impact housing projects by increasing prices and delaying timetables. Remodeling jobs that involve carpenters, framing crews, bricklayers and electricians are seeing some of the largest shortages.
"The labor shortage continues to be one of the top concerns for remodelers across the country," says Tim Ellis, the NAHB's Remodelers chair. "An ongoing challenge for remodeling is keeping their prices competitive while dealing with the increasing costs of labor."
From half to 70 percent of the remodelers surveyed by NAHB reported that the top effects of the labor shortage have been higher wages and subcontractor bids, higher prices for customers, and difficulty completing projects on time. Some even say they turned down projects because of the problem.
Source: "Tariffs Add New Costs to Home Remodeling," CNBC (May 10, 2019) and "How Steeper U.S. Tariffs on China Could Affect Consumers and Businesses," CBS News (May 10, 2019)
© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688
Countertops, flooring and lighting costs going up

9 days of the year offer sellers a 10% premium

9 days of the year offer sellers a 10% premium









 




IRVINE, Calif. – May 3, 2019 – While the best day to list a home in New York City could be different than in Miami, ATTOM Data Solutions analyzed eight years of home sales, 2011–2018 – to determine the best days of the year to sell a home for maximum seller profits.




ATTOM’s results: Nine days of the year offer seller premiums of 10 percent or more – eight of those occur in the summer months, but one occurs the day after Valentine’s day.




“It’s no surprise that (summer is) a time when people are most likely to move,” says Todd Teta, chief product officer with ATTOM. “Families start their home search when they know their kids will be out of school and when the weather is ideal for home viewing and moving, giving home sellers an upper hand in price negotiations.”




9 best days to sell a home for seller premiums above 10%




  • June 28 (10.8 percent seller premium)
  • May 31 (10.7 percent seller premium)
  • June 21 (10.7 percent seller premium)
  • June 20 (10.6 percent seller premium)
  • May 24 (10.5 percent seller premium)
  • June 17 (10.5 percent seller premium)
  • June 29 (10.1 percent seller premium)
  • February 15 (10.1 percent seller premium)
  • May 29 (10.1 percent seller premium)




ATTOM’s best months to sell a home based on seller premium




  • June (9.2 percent)
  • May (7.4 percent)
  • July (7.3 percent)
  • April (6.4 percent)
  • March (6.1 percent)
  • August (5.8 percent)
  • February (5.6 percent)
  • September (4.7 percent)
  • November (4.0 percent)
  • January (3.7 percent)
  • October (3.3 percent)
  • December (3.3 percent)




© 2019 Florida Realtors®

Which Fla. cities offer the most bang for the investment buck?

Which Fla. cities offer the most bang for the investment buck?









 




PANAMA CITY BEACH, Fla. – May 2, 2019 – According to Rented.com, Florida has more profitable vacation rental markets than any other state, with many cities expected to give homeowners more bang for their buck this year.




The property management site analyzed trends in housing costs and tourism to rank the 150 best places to buy a vacation property in 2019, with six cities in the U.S. top 25, 10 in the top 50 and 19 in the top 150.




"The trend this year is to focus on markets that are as recession resistant as they come," the report says. "They are established vacation destinations where family traditions are made. They remain affordable family destinations even during an economic downturn."




Florida cities' rankings for return on investment based on perfect 100 score




3. Panama City Beach: Score 90.5 – estimated rental income $20,000




5. Palm Coast: Score 86.9 – estimated rental income $33,000




12. Jacksonville: Score 79.8 – estimated rental income $35,500




15. Navarre: Score 78.8 – estimated rental income $39,000




19. Kissimmee: Score 74.7 – estimated rental income $20,500




20. Cape San Blas: Score 74.0 – estimated rental income $66,500




27. Cocoa Beach: Score 69.8 – estimated rental income $30,500




37. Fort Myers: Score 64.7 – estimated rental income $24,000




42. Miami Beach: Score 63.9 – estimated rental income $61,000




45. Davenport: Score 63.4 – estimated rental income $25,500




51. Destin: Score 62.4 – estimated rental income $53,000




65. Orlando: Score 56.5 – estimated rental income $34,000




74. Clearwater Beach: Score 52.5 – estimated rental income $65,500




83. Ponte Vedra: Score 49.8 – estimated rental income $42,000




86. Daytona Beach: Score 49.0 – estimated rental income $25,000




113. Santa Rosa Beach: Score 42.0 – estimated rental income $47,500




126. Pensacola Beach: Score 38.2 – estimated rental income $37,000




134. Tampa: Score 35.2 – estimated rental income $28,500




149. Siesta Key: Score 27.9 – estimated rental income $43,000




Source: Coastal Living (04/30/19) Spyker, Marisa


© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688  

How to appeal property taxes

How to appeal property taxes

 
NEW YORK – April 24, 2019 – Home values have risen across the country, which means many homeowners' property taxes are going up, too. The average annual property tax for owner-occupied single family homes nationwide in 2017 was $3,399, an effective tax rate of 1.17 percent, according to Attom Data Solutions.
Nine counties impose average annual property taxes of $10,000 or more. In Westchester County, New York, the average property tax is more than $17,000 a year. Now that federal deductions for state and local taxes are capped at $10,000, living in a high-tax jurisdiction has become even more expensive.
If your property tax bill has increased significantly, you may have grounds for an appeal, particularly if the increase seems out of line with overall appreciation in your area.
Most jurisdictions give you 90 days after you receive a new assessment to appeal, although some close the appeals window after 30 days, says Pete Sepp, president of the National Taxpayers Union. Some lawyers handle property tax appeals on a contingency basis, but most homeowners can appeal on their own, Sepp says.
Plenty of property owners challenge their assessments each year, and between 20 percent and 40 percent of them win lower assessments and lower property tax bills. The following steps will show you the way to success.
Step 1: Know the rules
Schedules vary, but local governments commonly send assessment notices to homeowners in the first few months of the year. As soon as you get yours – or even before – check the deadline for challenging the value. You may have just a few weeks. And be sure you know how your locality assesses property.
Some set the tax assessment at a percentage of market value – 80 percent, for example – so don't be smug if you get a $90,000 assessment on a home you think is worth at least $100,000.
Step 2: Catch a breakWhen you get your property tax bill, check it for your tax rate, assessment figures and payment schedule, and make sure that you're getting the tax breaks you deserve.
Some states allow anyone who owns and lives in a primary home to shield a portion of its value from taxation, or you may be eligible for credits based on your income or status as a senior citizen, veteran or disabled person. In Florida, for example, all homeowners are eligible for a homestead exemption of up to $50,000; those 65 and over who meet certain income limits can claim an additional $50,000.
Other jurisdictions reduce a percentage of your tax bill if you meet specific criteria. While these tax breaks are valuable, they're often overlooked. For example, when Chicago increased property taxes by an average of 13 percent in 2016, it included a rebate program for low- and middle-income homeowners. The rebates were worth up to $200, but only about 16 percent of eligible homeowners claimed them.
Rebates and other property tax breaks aren't automatic: you usually have to apply for them and show proof of eligibility. Contact your state's department of taxation or visit its website to see what breaks are available to you.
Step 3: Set the record straight
Check your property's record card, which you'll find at your assessor's office or possibly on its website. This is the official description of your house, and if you see an outright error – indicating four bedrooms and three-and-a-half bathrooms for your two-bedroom bungalow, for example – the assessor may fix the problem on the spot, reduce the assessed value and your tax bill. That'll save you the trouble of a formal appeal.
Step 4: Size up the neighbors
We'd never tell you to keep up with the Joneses, but comparing your property to similar ones in your neighborhood will determine whether you have a solid case.
Pull up property cards of several homes of similar age and square footage and with the same number of bedrooms and bathrooms to see how their assessments line up with yours.
Step 5: Build your case
If you find that your assessed value is considerably higher than several similar homes, you may have grounds for appeal. But even if the assessment falls into the middle of the pack, it's not necessarily fair. Maybe your house has a leaky basement or lousy grading that doesn't allow you to have a garden. The assessment should be based on the market value of your home; if your place has issues that would turn off buyers, now's the time to own up to them.
Step 6: Fight city hall
The process varies by locality, but you'll likely send your appeal and your evidence – data on comparable properties, blueprints, photographs, repair estimates – to the assessor for review. You should get a verdict within a couple of months.
If you're dissatisfied, take your case to the appeals board and put your persuasive skills to work. Don't whine, and save your opinions on politics and tax rates for elected representatives who vote on those matters.
Step 7: Enlist troops
If you don't have time, or the stomach, to do battle yourself, get a hired gun to do the legwork for you. A professional appraiser can provide the strongest evidence of your property's worth. If your community allows outside appraisals – and if you're willing spend at least $250 – find an appraiser with national certification, such as through the Appraisal Institute or the American Society of Appraisers. Don't fall for solicitations from law firms or other services saying they'll assist you in return for a high percentage of the savings on your bill – it's not worth the cost.
Step 8: Reap the rewards
If you need added incentive to bring a skeptical eye to your real estate appraisal, remember this: A successful appeal is truly the gift that keeps on giving, year after year. Raise a toast to your success.

Mortgages more likely now for self-employed clients

Mortgages more likely now for self-employed clients









 




WASHINGTON – April 5, 2019 – The two largest sources of mortgage money in the United States want self-employed loan shoppers to know that their chances of getting a home loan approved have increased.




Fannie Mae and Freddie Mac rolled out automated underwriting technology changes for lenders that take a lot of the guesswork and risk out of the approval process when the self-employed apply for a mortgage loan.




Lenders have been reluctant to approve loans for the self-employed because, in part, it's expensive, time-consuming and labor-intensive to gather and analyze the paperwork needed to verify income and gauge risk. It's much easier and profitable for them to process applications from wage or salaried employees who get a W-2 issued by their employer.




But this new technology, incorporated into the companies' automated underwriting systems, enables lenders to analyze a self-employed applicant's paperwork quickly and accurately, and they can come to a decision in a fraction of the time it used to take – and with far less speculation involved.




The process potentially increases efficiency so much that even small community banks in rural areas can find it cost-effective to consider loan applications that they might have passed on before.




Source: Fannie Mae and Freddie Mac

Florida Legislature focuses on emotional support animals

TALLAHASSEE, Fla. – March 26, 2019 – The Florida Legislature has turned its focus to emotional support animals under two bills introduced in the House (HB 721) and Senate (SB 1128). Three committees were scheduled to hear each bill in their respective houses, and both have passed two committees so far. If passed by their third and last committee, they will head to the full floor of the House and Senate for a vote.


Florida's existing law for service animals mirrors federal Americans with Disability Act (ADA) laws; however, state law does not address emotional support animals (ESAs). As a result, someone can currently comply with Florida law when dealing with ESAs but violate federal law. These bills would correct that federal-state discrepancy by adding ESAs into Florida statues if passed by the Florida Legislature and signed into law by Gov. Ron DeSantis.


If passed, the bills would also add a punishment for people who falsely claim that a pet is an emotional support animal. In the current version of the bill, which is still subject to change through amendments, the text reads:


"A person who falsifies written documentation … for an emotional support animal or otherwise knowingly and willfully misrepresents herself or himself, through conduct or verbal or written notice, as using an emotional support animal and being qualified to use an emotional support animal, commits a misdemeanor of the second degree … and must perform 30 hours of community service for an organization that serves individuals with disabilities, or for another entity or organization at the discretion of the court, to be completed in not more than 6 months."


The misdemeanor addition is new as it applies to ESAs, but it already exists in Florida law with respect to service animals.


The ADA defines service animal as an animal trained to do work or perform tasks benefitting a person with a disability. An emotional support animal (ESA) is not the same thing as a service animal, but the federal Fair Housing Act (FHA) prohibits discrimination in housing access based on a person's disability and requires reasonable accommodations. Unlike a public accommodation under the ADA, a housing provider must also make FHA reasonable accommodations for an emotional support animal.


In relation to ESAs in housing, a provider may ask a person to submit reliable documentation of a disability and his or her disability-related need for an ESA, including a written certification from a medical professional.


The bills in the Florida Legislature currently define ESAs; require a housing provider to offer equal access to a person with an ESA; and prohibit the charge of any additional fee associated with an ESA.


The bills permit a housing provider to request additional information regarding an ESA, including written documentation:


  • From a listed type of licensed health care practitioner
  • Verifying the applicant's disability or disability-related need
  • Verifying the ESA provides support alleviating one or more symptoms or effects of a disability or disability-related need


If the bills become law as currently presented, they would require the Florida Department of Health (DOH) to establish the format a health care practitioner must follow when providing ESA documentation to a patient, and it grants rule-making authority to DOH relating to ESA documentation requirements.


If passed and signed by the governor, the bill becomes effective on July 1, 2019

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