St Augustine Florida Real Estate

Summer surprise: U.S. trade deficit narrows in June

Sherri Crews — Tue, 12 Aug 2008 13:20:21 GMT

Posted Aug 12th 2008 12:57PM by Joseph Lazzaro

In this market and this economy, you take the good news where you can get it.

Today, we got some good news: the U.S. trade deficit narrowed in June to $56.8 billion on record exports and a dip in non-oil imports, the U.S. Commerce Department announced Tuesday. Economists surveyed by Bloomberg News had expected the June trade gap to be $61.5 billion.

Exports surged 4% in June to a record $164.4 billion, the largest gain in four years. Imports increased 1.8% to a record $221.2 billion, inflated by sky-high oil prices. Oil, which traded at about $113.65 per barrel on Tuesday at mid-day, is up about 360% since 2003.

U.S. export activity has been a silver lining in the nation's otherwise anemic economy. The trade deficit has been declining for about two years, aided by a weaker dollar and demand for products in emerging market countries.

A stronger U.S. economy in Q2?

Economist David H. Wang told BloggingStocks Tuesday the June trade deficit statistic "was a really pleasant surprise," but he still wants to lower expectations.

"The high export number is the standout, and it's one that, if it continues, implies a higher rate of GDP growth for the U.S. economy in Q2, but let's not jump the gun. Economists sense there's a global economic slowing going on, exports may have peaked as a result, so this large increase in June may prove to be transitory," Wang said.

The U.S. economy grew at a 1.9% annualized rate, according to preliminary data compiled by the U.S. Commerce Department. Wang said the June trade deficit data suggests an upward revision of the Q2 data, but he sees only a modest upside revision to 2.1-2.2%.

"Exports are the only engine of growth right now, but we still have tremendous contraction forces in housing and in declining disposable income. I expect upward negative revision in those categories, so the total Q2 GDP revision will be modest, in my interpretation," Wang said.

In June, exports of industrial goods rose 8.1%, consumer goods exports increased 5.4%; concerning imports, goods imports rose 2%, while services increased 1%.

Economists prefer that a nation run a trade surplus as opposed to a trade deficit, as it usually implies that a nation's goods are competitive on the world stage, its citizens are not consuming too much, and that it's amassing capital for future investment and economic goals.

Economic Analysis: Prudent analysis from economist Wang. The June export data suggests a stronger Q2 GDP statistic, but one should never underestimate the degree to which the housing slump and high oil prices can slow U.S growth. Hence, like Wang, it's best to expect only a sight upward revision in Q2 GDP, pending additional data. The U.S. economy's health remains serious and guarded, to borrow a hospital phrase.

Fed Stands Still – Time to Make Your Move

Sherri Crews — Wed, 06 Aug 2008 05:26:55 GMT

The Federal Reserve held the line on Tuesday–leaving the Fed Funds Rate at 2.00% for the third straight meeting.

Earlier in the week, the Personal Consumption Expenditure data indicated that inflation climbed 0.8% overall in June, which is the highest inflation jump in 27 years. In addition, the report indicated that inflation now sits at 2.3%–above the Fed's desired range of 1-2%.

What Does This Mean to You?
Many experts believe the housing market is nearing the bottom and may even be set to bounce back up. For now, home prices remain low, personal incomes are high, and interest rates are still very attractive.

If you've been weighing your options and waiting to see how things shake out, this is the ideal time to act–especially when you consider the new Housing and Economic Recovery Act benefits for home buyers:

Tax credits. First-time home buyers who purchase their primary residence between April 9, 2008 and July 1, 2009 are eligible for up to $7,500 in tax credit, as long as they haven't owned a home in the last three years. The credit is actually a generous interest-free loan, so we'll have to talk about some income parameters and payback terms. But if you're a new home buyer – or know someone who is renting or in the market to buy – this is a huge benefit.

Lower rates for larger loans. In the past, mortgages of $417,000 or more have been considered "jumbo" loans that were more expensive to finance. Thanks to recent provisions, however, those jumbo loans were able to qualify for better financing rates in some parts of the country. Although those provisions were set to expire, they are being extended–with a minor change to the maximum amount eligible.

Contact your mortgage lender for more details to take advantage of these offerings while we are still in a buyers market.

FHA Bill

Sherri Crews — Thu, 24 Jul 2008 07:45:56 GMT

The House and Senate have reached agreement on the omnibus Housing bill

Seller participation in down payment assistance loans is being terminated. Must have obtained credit approval prior to October 1st.
Risk-based pricing moratorium is effective October 1st
No changes to FHA broker eligibility requirements

Below is the link to the complete bill. The FHA provisions start on page 477
Click this link to view the bill:

St Augustine Real Estate Update 2008

Sherri Crews — Fri, 18 Jul 2008 14:54:53 GMT

Welcome to my Real Estate Blog for St. Augustine, FL. These are exciting times in real estate. If you have always dreamed of becoming a Donald Trump or Carlton Sheets, now is the time to be purchasing real estate. If you are looking for investments, we've got them in Northeast Florida at some of the most competitive pricing we've seen in years. I hope you will visit my real estate website at http://www.homesofnortheastflorida.biz where you will find my featured listings, as well as have access to searchable MLS listings for northeast Florida.

Feel free to add your comments or contact me directly at 904-814-4588.

Sherri