Americans' equity in their homes near a record low
WASHINGTON (AP) _ Falling real estate prices are eating away at home equity.
The average homeowner now has 38 percent equity, down from 61 percent a decade ago, the Federal Reserve said Thursday. The percentage of their homes that Americans own is near its lowest point since World War II.
The latest bleak snapshot of the housing market came as mortgage rates hit a new a low for the year, falling below 4.5 percent for a 30-year fixed loan. Not even attractive rates have given any lift to the depressed housing industry.
The Fed report is based on data from the first quarter of this year. Another report last week found that home prices in big cities fell to 2002 levels.
Normally, home equity rises as a mortgage is paid off. But home values have fallen dramatically since the bubble in prices burst in 2006. So many homeowners are losing equity even though the outstanding balance on the loan is getting smaller.
Unemployment aid applications stuck at high level
WASHINGTON (AP) _ The number of people seeking unemployment benefits hardly changed for a second straight week, stuck at a high level that points to a slowing job market.
Weekly unemployment benefit applications ticked up by 1,000 to a seasonally adjusted 427,000 last week, the Labor Department said.
It marked the ninth straight week in which applications have been above 400,000. That trend represents a setback after applications had been declining all winter.
Nintendo's task: The Wii, again, more, better
NEW YORK (AP) _ The upcoming Wii U _ part tablet computer, part game machine _ could help Nintendo surpass its rivals once again.
Yet investors so far are skeptical, with unknowns such as the price. The company's stock has fallen 10 percent since the Wii U's unveiling this week. Expectations for the new machine have been high following the original Wii's roaring success.
Wii U, which will go on sale next year, features a motion-sensing controller with a tablet-like touch screen and high-definition graphics.
Trade deficit narrows in April to $43.7 billion
WASHINGTON (AP) _ U.S. companies sold more computers, heavy machinery and telecommunications equipment in foreign markets in April, pushing exports to a record high. Imports declined, reflecting a big drop in auto imports from Japan caused by supply disruptions from the March earthquake and tsunami.
The U.S. trade deficit narrowed by 6.7 percent in April to $43.7 billion, the lowest level since December, the Commerce Department reported Thursday.
Wholesale inventories and sales both increase
WASHINGTON (AP) _ Wholesale companies added to their stockpiles in April for a 16th straight month, a sign that businesses were confident in future sales gains. However, fresh data since then have shown the economy has weakened, suggesting supply levels could shrink in the months to come.
Inventories rose 0.8 percent in April to $447.2 billion, the highest level since October 2008, the Commerce Department reported Thursday. Sales increased 0.3 percent to $395.5 billion, marking the ninth sales gain in the past 10 months.
Companies boosted their stockpiles of furniture, machinery, paper, clothing and chemicals. Inventories of autos, lumber and computer equipment declined.
Wet spring cuts corn crop, prices to stay high
ST. LOUIS (AP) _ U.S. food prices are expected to stay high through 2012 because heavy rains and extreme flooding will likely cut the size of this fall's corn harvest.
The United States will have a surplus of just 695 million bushels of corn in 2012. That would be the tightest surplus level in 15 years, and far less than the 900 million bushels estimated last month.
A wet spring delayed planting schedules and will likely diminish crops by harvest time in September, the Agriculture Department said Thursday. This followed a more optimistic forecast from the government in May, which predicted a drop in corn exports that could have replenished U.S. food supplies and eased prices.
Gov't faults 3 lenders over mortgage-aid efforts
WASHINGTON (AP) _ The Obama administration is blaming the three largest U.S. mortgage lenders for the failures of its foreclosure-prevention program. It says they've done little to help people at risk of losing their homes.
Wells Fargo & Co., Bank of America and JPMorgan Chase & Co. have failed to help enough people permanently lower their mortgage payments so they can stay in their homes, the Treasury Department said Thursday.
Based on those lenders' lackluster success for the first three months of 2011, the government is withholding financial incentives that amounted to up to $1,000 per permanent loan modification. Treasury said the three lenders incorrectly determined that many people were ineligible for the program.
The lenders are disputing the data. They say the findings are based on old reports, not audits from the first quarter of the year as Treasury claimed. One of them, Wells Fargo, is formally appealing the government's decision to cut off its incentives.
Fixed mortgage rates drop for 8th straight week
WASHINGTON (AP) _ Fixed mortgage rates have dropped for an eighth straight week, but the low rates have done little to boost the depressed housing market.
The average rate on the 30-year loan fell to 4.49 percent from 4.55 percent, Freddie Mac said Thursday. The average rate on the 15-year fixed mortgage, a popular refinance option, slipped to 3.68 percent from 3.74 percent. Both are lows for the year.
Rates tend to track the yield on the 10-year Treasury note. The 10-year yield has been dropping as investors have snapped up Treasurys over fears that the economy is slowing.
Most people can't take advantage of the low mortgage rates because they can't meet tougher lending requirements. And many who could afford to refinance likely did so last year, when rates fell to their lowest levels in decades.
By The Associated Press(equals)
The Dow Jones Industrial Average rose 75.42 points, or 0.6 percent, to close at 12,124.36. The Standard & Poor's 500 index rose 9.44, or 0.7 percent, to 1,289.00. The Nasdaq composite rose 9.49, or 0.4 percent, to 2,684.87.
Benchmark West Texas Intermediate crude for July delivery rose $1.19 to settle at $101.93 on the New York Mercantile Exchange.
In other Nymex trading for July contracts, heating oil added 4.41 cents to settle at $3.1378 per gallon and gasoline futures gained 6.11 cents to settle at $3.0398 per gallon.
In London, Brent crude rose $1.72 to settle at $119.57 per barrel on the ICE Futures exchange.