Known for his ability to predict the market, Warren Buffet this week said the housing market will recover by 2011. Although this is fantastic news, we need to keep in mind that repercussions of the recession will be evident for years to come. Foreclosures and bankruptcies have marred many Americans’ credit scores which will impact their ability to buy a home in the future. In other news, Fannie Mae and Freddie Mac warned this week that, in addition to a new request for $15 billion from the government, they will continue to need assistance in the coming years. So we have a mixed bag this week again: some of the good and some of the bad.
As we imagined, U.S mortgage rates retreated below 5 percent this week, propping demand for home loans after purchase applications sank to a nearly 13-year low the previous week. The government also announced this week it is giving homeowners another year to take advantage of the Home Affordable Refinance Program, although millions unfortunately, for one reason or another, have not refinanced and therefore have not yet benefited from the program. We’ll see if this extension works.
On to another program from 1600 Pennsylvania Avenue, President Obama this week detailed the Home Star program, which will boost the energy efficiency of the nation’s homes. If the program is approved by Congress, homeowners can get rebates for making their homes more eco-friendly by replacing windows or insulation, among other things. Any program that aims to help the environment gets four stars in our book!
A new survey this week showed that about 36 percent of Americans claim to have had trouble paying their bills in the past two years. The good news for our industry? When asked which loan they’d pay if they could afford only one, 48 percent of respondents said their mortgage.
For any of your clients who are holding off on buying a home, waiting for prices to drop even lower, you can communicate that home prices are no longer free-falling. Coupled with historically low mortgage rates and the tax credit—although it seems like we’ve been saying this forever—now really is the time to buy. But if foreclosures are what people are looking for, a new Web site launched this week, Rebuildus.com, is designed to sell some of the low-end homes bought in bulk from banks by foreclosure investor James Odell Barnes. Just another tool for your belt.
This week we saw homebuilders employing interesting strategies as some went to work directly for banks, many of whom have been left holding unfinished homes after the original builder went bankrupt. Builder Hovnanian Enterprises also has more work as it plans 79 new hillside homes in California’s Inland Empire, one of the hardest hit areas by the market downturn. Homebuilders, we hope you stay busy!
On to some helpful tools that will make our lives easier… Omniture announced plans to turn Facebook into an online marketing channel, integrating technology tools, audience segments and best practices. This can help users integrate into the Facebook community more efficiently. For those of you who have invested in Google click advertising in the past, the company announced a similar expansion this week on its mobile space. Dubbed “click-to-call,” the option will be the same price as the traditional click-ad but is targeted for the on-the-go consumer. Speaking of mobile, Facebook and Twitter saw triple-digit traffic growth on the mobile Web last year. Not only are people increasingly using these Web sites, but they are using them on the go. Do we ever sit still?
The good news is we soon will know the impact social media is having on a variety of product categories. Knowledge Networks and MediaPost Communications this week announced the launch of a long-term study providing a consumer-centric view of social media’s affect on 30 key product categories called “Faces of Social Media.” We’ll stay tuned for the findings but, in the meantime, any predictions?
Also this week, Twitter is creeping to a new milestone – 10 billion tweets. What are the chances it could be me?