Housing Starts: Is the Worst Behind Us?

After boosting construction in February, March, and April, in May homebuilders saw housing starts drop to a seasonally adjusted annual rate of 1.474 million units, according to a Census Bureau report released recently.

The housing market isn't as bad today as it was in the early 1990s or early 1980s, but outlooks have worsened in the past month. Homebuilders have tried to lure buyers with price cuts, but tighter lender standards and rising mortgage rates have been too much to bear, leaving builders with a glut of unsold homes.  Fixed-rate mortgage rates have jumped nearly 60 basis points since May 1st.

The good news is that as builders scale back, inventories of new homes may slowly decrease.

The worst may be behind us.  Action Economics Chief Economist Mike Englund expects starts under construction to fall at an 8% rate in the second quarter, half the 17.7% rate of decline in the first quarter.  Housing starts are on the rise in certain regions.  In May starts jumped 16% in the Northeast and the Midwest.  In the same period, they fell 2% in the South and 20% in the West.

What do you think?  Is the worst behind us?  We'd love to hear your comment by clicking the comment link below.

Paying Too Much in Property Taxes?

More than half of homeowners pay too much because their property has been wrongly assessed.

Property-tax increases are based largely on rising home values, not the increase of taxes by local governments.  Different formulas are used to figure property taxes, but it all depends on a home's assessed value.  Some jurisdictions use a home's actual market value, while others use a percentage of a property's worth.

The National Taxpayers Union estimates that as much as 60% of taxable property in the United States is overassessed.  But only half of homeowners protest their assessments.  This means many may be paying more in property taxes than necessary.  Many taxpayers don't fight it because they don't understand the process, or because they can't stomach doing the research and providing evidence to prove the assessment is wrong.

If you really don't have the time or desire, hire a property-tax consultant or attorney to do the work.  Many of these consultants charge on a contingency basis, meaning they'll take a percentage of the tax savings if they succeed in lowering your assessment.

Mistakes happen more often than you think.  Many assessors don't even come onto your property to inspect it.  They simply compare a written description of your home with that of similar properties in your neighborhood.  Appraisers also may use historical information that's wrong.  A home's square footage, for example, might have been incorrectly calculated on original construction documents.

Here are additional tips to help you in the appeals process: