Minneapolis - The Bureau of Labor Statistics report released Friday surpassed expectations and delivered surprising news that the U.S. economy created 114,000 jobs during September and the unemployment rate dropped to its lowest level since January 2009. A sense of greater job security increases U.S. optimism and one of the first outcome is consumers invest in their homes.
Some area of U.S. real estate are in short supply to meet the demand for luxury homes, like Silicon Valley and the Twin Cities. "The fact is, all over the country, and especially in Minneapolis the housing market is seeing an interest in luxury homes. With improving housing markets and low interest rates, a lot of people of wealth are making decisions to build luxury homes in the Twin Cites or requesting luxury home renovations," says Butch Sprenger, owner of Destiny Homes.
For more than a century, the Bureau of Labor Statistics has published a list of how an average American consumer spends his or her annual budget. The recent released report shows the raw numbers of inflation we tend to be infatuated by, it highlights the ratio of impact certain goods have on people's budgets in relation to their incomes.
Couple that with QE3's assistance to advance housing markets and home prices, and we are finding that households holding secure employment and substantial savings accounts are facing the best of worlds for considering new construction homes. In a recent talk at the Economic Club of Indiana in Indianapolis, Federal Reserve Chairman Ben Bernanke said the Federal Reserve's plan to buy $40 billion in mortgages every month for the foreseeable future, widely recognized as QE3, would help spur greater economic activity and higher home prices. He said that would help many more savers. "Many savers are also homeowners; indeed, a family's home may be its most important financial asset," he said. "Only a strong economy can create higher asset values and sustainably good returns for savers."
“The massive bond-buying initiative, called quantitative easing, aims to prop up the economy through a few key channels -- namely the housing market and the stock market. Both of those channels skew in favor of Americans who are already in solid financial standing, and it seems the wealthier you are, the more you have to gain,” states CNNMoney in an article titled “Federal Reserve Policies Favor The Rich”.
Minneapolis City Housing policy director Tom Streitz told a local TV station, "The trend is absolutely towards high amenity." August's Housing Scorecard shows the housing recovery is steady and increasing, adding to home values in high-demand neighborhoods across the Twin Cities.
Banks are favoring or some say "cherry-picking" wealthier applicants for home loans. Recent opportunities include:
Bank of America rolled out a 0.50-percentage-point discount on points paid toward mortgages for customers having more than $250,000 in assets with the bank.
Chase Private Client clients who have somewhere between $500,000 to $5 million in assets have been able to reduce closing costs.
Wells Fargo discounts mortgage rates for some clients who maintain at least $1 million in assets, including Wells Fargo brokerage and savings accounts.
At a September news conference, Chairman Bernanke stressed that when the Fed launched its first round of bond buying in 2008, the average rate on a 30-year fixed-rate mortgage was a little above 6 percent. Today, the rate varies up and down around 3.4 percent, the lowest since long-term mortgages began in the 1950s.
"Under current economic conditions commonly used house price indices will rise between 8.5 and 22 percent cumulatively over the next five years," says the latest UFA Mortgage Report by University Financial Associates of Ann Arbor.
Destiny Homes is a highly skilled professional residential home builder, specialized in Twin Cities luxury homes which are all carefully planned around the idea of community and an exceptionally lifestyle. Call 952-934-5706 to discuss building or renovating a luxury home.
Source: Destiny Homes
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