Daily Local News (West Chester, PA)
A burst of hiring occurs nationwide in November
The U.S. added 321,000 jobs during the month, the most in nearly three years.
WASHINGTON » A burst of U.S. hiring in November — the most in nearly three years — added 321,000 jobs and provided the latest evidence that the United States is outperforming other economies throughout the developed world.
In addition, the government said Friday that 44,000 more jobs were added in September and October combined than it had previously estimated. So far this year, job gains have averaged 241,000 a month, putting 2014 on track to be the strongest year for hiring since 1999.
The unemployment rate remained at a six-year low of 5.8 percent.
“These were boom-like numbers,” said Mark Zandi, chief economist at Moody’s Analytics. “They indicate that the U.S. economy is on very solid ground.”
November’s robust job growth, reflecting a steadily rising economy, makes it likelier that the Federal Reserve will start raising interest rates by mid-2015 as many economists have speculated. The Fed has kept its key
your total DTI cannot exceed 45 percent. For FHA financing, that number is about 57 percent.”
Jackson’s rule of thumb is to try to keep your monthly PITI payment at or below 30 to 35 percent of your monthly income, potentially allowing for 10 percent of your income to go toward other obligations. Of course, in the case of debt, less is more. The less you owe, the more you’ll qualify for.
These ratios and lending standards are set where they are for good reason. Banks and the institutions buying their loans do not want people to go bad on their payments. Foreclosure is timeconsuming and expensive. When people have to pay half of their incomes toward housing, Fannie Mae’s data says that there is a risk of default that not acceptable. Basically, those people are in over their heads, even if they don’t yet know it.
Fannie Mae may help and keep you from getting in over your head with an expensive mortgage (simply by having standards that you cannot meet), but you’re on your own when it comes to rents. Do your math. If you’re thinking about paying half your paycheck for a rental, you probably already know this, but it’s going to be a rough ride.
Renters left longing
Despite the struggles of many, a great number of experts see today’s home prices as relatively affordable given the accommodative interest rates being held down by the monetary policies of the Federal Reserve. However, those rates won’t stay down forever, especially with the QE3 now fading into the distance.
Jeremy Burbank of The Demand Institute joins the consensus, noting that “home ownership has become more affordable, but many renters have still been unable to transition into home owners.” The Institute says that more than half of surveyed renters want to purchase a home.
Blame game
Too many Americans are in over their heads when it comes to housing expenses. For many, it is their own fault, because they have overextended themselves. Even more are probably in the position because of rising rents, stagnant wages, underemployment, high food and gas costs, or any number of the budgetary concerns Americans have faced in the wake of the Great Recession.
Whoever or whatever is to blame is less important than the solution. People need to live more within their means and the economy needs to continue improving so that people can afford to put a house over their family’s heads. The economic battle is trending in the right direction, and the powers that be are continuing to provide accommodative conditions for continued growth. As for the battle to change mindsets, we may be fighting a losing battle with the natural human (and quintessentially American) desire for more.