$8,000 Tax Credit Extension For Military Serving Outside The U.S.
The IRS states: Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31,2008 and ending May1,2008
By Karen Dry and Linda Hebert
Rising female consumer power is changing the way companies design, make and market products — and it’s more than just adding pastels.
Women are a force not to be underestimated, pushing 80% of consumer spending in the U.S. alone.
They also are the deciding factor in 87% of all household purchases and, according to the marketing research firm Smith-Dahmer Associates, nearly 91% of all new home purchasing decisions are made or influenced by female buyers.
And should a man make the final purchasing decision, well, his tastes and buying influences are determined by how he was raised by his mother or other prominent women in his life.
Women are the driving force of our economy. According to Northwestern Mutual, high-net-worth women account for 39% of the country’s top wealth earners; 2.5 million of them have combined assets of $4.2 trillion. More than 1.3 million women professionals and executives earn in excess of $100,000 annually. Nearly half — 43% — of Americans with more than $500,000 in assets are female.
Over the next decade, women will control two-thirds of consumer wealth in the U.S. and be the beneficiaries of the largest transference of wealth in our country’s history, according to Claire Behar, senior partner and director at the public relations and marketing firm Fleishman-Hillard in New York. Estimates range from $12 trillion to $40 trillion.
Many boomer women will experience a double inheritance windfall from their parents and their husbands. Luxury branding resonates with boomer woman.
The biggest mistake often made by marketers — and 68% of marketing executives in the U.S. are men — is assuming they know what women want without even asking.
“If the consumer had a sex, it would be female,” says Bridget Brennan, author of “Why She Buys: The New Strategy for Reaching the World’s Most Powerful Consumers.” “If the business world had a sex, it would be male. And therein lies the pickle.”
Taking a woman-centric approach means designing from her perspective, Brennan says. “At its core, it means understanding the female so innately that you can actually anticipate what she wants even before asking — especially during the buying experience,” she says in her book.
While much of the country is in the middle of the hottest summer in recent memory, residential construction appears to be just entering an early spring — with hopeful signs of more meaningful growth ahead.
At first glance, the June housing starts report appeared to be negative, with activity declining 5.0% to a seasonally adjusted annual rate of 549,000 units, down from a pace of 578,000 units in May. But on closer examination there were some positive signs.
Single-family starts fell a modest 0.7% — from 457,000 to 454,000 — suggesting that they are at or near bottom after dropping off with the expiration at the end of April of the home buyer tax credit, which advanced a significant amount of housing demand into that month.
Although single-family building permits fell 3.4% in June — from 436,000 to 421,000 — this was due to a 7.8% decline in the South; the other regions were either flat (the West) or up slightly (the Northeast and Midwest).
Even multifamily construction, which continues to struggle against forces such as weak rents and the scarcity of financing, provided some basis for optimism. Largely responsible for the drop in total starts in June, multifamily starts fell 21.5% to a yearly rate of 95,000, down from May when they were running at a 12-month high of 121,000.
But the picture is not so bleak when viewed in the broader context of quarterly averages, which remove much of the noise created by the volatile monthly numbers.
Multifamily production in the second quarter proceeded at an annual pace of 111,000 units, which was up 19.4% from 93,000 in this year’s first quarter and up 45.0% from 76,000 in the fourth quarter of 2009.
Meanwhile, multifamily building permits in June jumped 19.6% to 165,000, their highest level since February 2009, from May’s 138,000. On a quarterly basis, permits rose 9.5% to 142,000 in the second quarter, up from 130,000 in the previous quarter.
At worst, multifamily construction appears to have found a solid bottom, and more optimistically appears to be on a steady, if erratic, upward course.
NAHB is forecasting that residential construction will slowly improve throughout the second half of this year and into next year, bolstered by continued low mortgage rates, affordable housing prices and an improving jobs market.
Conducted and released before the June housing starts and building permits numbers were reported, July’s NAHB/Wells Fargo Housing Market Index (HMI) fell to 14, down from 16 in June, indicating that builders see little grounds for optimism at the present time. Expiration of the home buyer tax credit, ongoing competition from foreclosed properties and short sales and difficulty in obtaining AD&C credit all contributed to the downbeat mood of the builders surveyed by NAHB.
Traces of rising optimism were found in the Northeast and the Midwest where the index rose, albeit to levels that remained low, and that improvement was supported by an increase in June’s single-family building permits for the two regions.
At the same time, slipping building confidence in the South was matched by a drop in the region’s permits. The HMI for the West also indicated an erosion of confidence, but the region’s single-family permits were flat.
Meanwhile, portraying gloomier consumers, the University of Michigan’s Consumer Sentiment Index dropped to 66.5 in July from June’s 76.0. Beneath the surface there was positive news for housing, with 76% of the households surveyed believing that now is a good time to purchase a house, the second highest reading over the past 14 months and only one percentage point below the peak level for this period.
Further improvement in the economy may enable more households to act on this belief.
The dejected spirits of builders and consumers have not been helped by recent indications that the economy is slowing down. Industrial production rose a mere 0.1% in June, though it was still up a healthy 8.2% from a year earlier. Meanwhile, capacity utilization held steady at 74.1%, its highest level over the last year and a half.
Consumers retrenched in June, cutting retail sales 0.5% from May, the second monthly reduction in a row. Nonetheless, sales were still up 4.9% from a year earlier.
Even small movements in consumer spending, which is responsible for two-thirds of the gross domestic product (GDP), can have major implications for growth. NAHB believes that consumer spending will slowly increase over coming months, helping to support the economic recovery.
The seasonally adjusted monthly Consumer Price Index (CPI) was down in June for the third consecutive month, falling 0.1% following a decline of 0.2% in May, but up 1.1% from a year earlier. Meanwhile, core inflation — excluding food and energy prices — rose a modest 0.9% from a year earlier.
The low rate of inflation gives the Federal Reserve the room to maintain its expansionary monetary policy and to keep mortgage rates low.
For the past year, the rental component of the CPI has been essentially flat, and as of June, it was down 0.1% from a year earlier. Homeownership “prices” — measured by using an owner’s equivalent rent, which is largely driven by the rent index without utilities — has also been drifting down, declining 0.3% over the past year.
The rent and owner components of the CPI make up 31% of the CPI. The soft rental market and excess vacancies have kept rents from rising, which has been a challenge to apartment owners who have seen other costs increase. It also has made it more difficult for multifamily projects to obtain financing.
The June Producer Price Index for finished goods also fell for the third month in a row, down 0.5% after declining by 0.3% in May. Nonetheless, the June reading was up 2.8% from a year earlier.
Weakness in construction contributed to a 0.7% drop in June for overall building materials prices for both single-family and multifamily construction, their first decrease in eight months. However, they were still up 3.9% and 3.5%, respectively, from a year earlier. Major contributors to June’s price decline were falling lumber, energy and copper prices.