New light bulb rules: what they are and 3 cost-saving choices– PLUS 3 ways the job market moves housing!h

Thomas Edison's incandescent light bulb was a brilliant invention, but not very energy efficient. Just 10% of the electricity it uses gets converted into light, the rest is radiated as heat. This January, the old-style bulb got a big push toward extinction, as additional provisions of the Energy Independence and Security Act of 2007 kicked in.

The new rules do not ban incandescents outright, nor do they say we have to use compact fluorescent (CFL) bulbs. But they do require manufacturers and wholesalers to meet new standards that force them to improve the efficiency of incandescent bulbs or replace them with bulbs using newer technologies.

The new standards phase in over the next two years, with 100-watt incandescents, the first victims. The Department of Energy assures us that the average household replacing 15 traditional 60-watt bulbs with the new alternatives can save over $50 a year on electricity – and have longer lasting bulbs. Here are three choices:

Halogen Incandescents. These offer a brightness and light quality closest to traditional bulbs and should last up to three times longer than old-style incandescents. But they only cut energy use by 25%. Estimated annual cost savings: $19.50.

Compact fluorescents (CFLs). These use 75% less energy and last up to ten times longer than traditional bulbs. Estimated annual cost savings: $54.

Light-emitting diodes (LEDs). These are the state of the art in low-energy lighting. They use 75%-80% less energy and last up to 25 times longer than old-style bulbs. They're costly, but prices should drop as more come to market. Estimated annual cost savings: $57.

THE SKINNY ON JOBS AND HOUSING

Over the years, in good times and bad, the most accurate indicator for the health of the housing market has been the health of the job market. When people are working full-time in good jobs they believe they'll keep, it's good for housing too. Here are three ways labor impacts homes:

1) Home Prices. A secure and healthy employment market helps stabilize home prices, since people aren't at risk of losing their homes because they can no longer afford them. A gain in jobs also brings in more first-time home buyers, which can help home prices rebound.

2) Home Size. In a good healthy job market, businesses often compete for the best workers, driving up salaries. When people get paid more, guess where they think about putting the extra money? In a larger home!

3) Home Location. Thriving labor markets require employers to attract people from outside the local area. This is why housing markets are localized. Towns, counties and states with better job markets than their neighbors also enjoy better housing markets. Compare job growth figures and the unemployment rate in your locale to other areas and the nation as a whole. That will tell you the real health of your local housing market.

If you're wondering about the housing market in your area or have any other related questions, please call or email us. We're always here to help.... Have a great day!

PS  With the housing market poised for an upturn in more areas of the country, this could be a great time to upsize, downsize or refinance. Mortgage rates are still at historic lows and home prices are very affordable. Please call or email us now to discuss your situation.

Inside Lending Newsletter - For the week of April 9, 2012 – Vol. 10, Issue 15

>> Market Update  QUOTE OF THE WEEK..."You miss 100% of the shots you don't take." --Wayne Gretzky, hockey's all-time leading goal scorer INFO THAT HITS US WHERE WE LIVE... Hopefully, more people will be taking a shot at buying a home, with home ownership regaining its appeal as rents head higher. A real estate research firm reported average apartment rents UP 2.7% last year, while the national vacancy rate went below 5% for the first time since 2001. Increasing rents, plus very affordable home prices and near record low mortgage rates, have made home buying cheaper than renting in most areas, spurring on first-time buyers.  A major bank housing analyst said apartment rental costs have historically been about 10% lower than after-tax home ownership costs. That difference began shrinking in 2010 and now apartment rents are about 15% higher than home ownership costs. A new survey found that twice as many real estate professionals, compared to three months ago, expect home values to rise. The housing market appears to be stabilizing as home sales trend upward and homebuilders are more optimistic than they've been in years. BUSINESS TIP OF THE WEEK... Focus your networking on the people who have referred business to you or made advantageous introductions. Stay in contact every three months to stay top-of-mind with these important contacts. >> Review of Last Week SLIPPING INTO Q2... In a not-so-wonderful start to the second quarter, the Dow suffered its worst weekly loss since last December, while the S&P500 and the Nasdaq also went lower. FOMC Minutes from the last Fed meeting left investors uncertain about monetary policy, while there were renewed concerns about Spain's sovereign debt. The ISM Services index, measuring the largest sector of our economy, dipped more than expected, but stayed in positive growth territory, as did the better-than-expected ISM Manufacturing index. Friday, equity markets were closed, but the government's disappointing jobs report ended the week on a downer for us all. Just 120,000 new jobs were created in March, hugely below expectations. The unemployment rate crept down from 8.3% to 8.2%, but economists explained that was because more people are becoming discouraged and dropping out of the work force. For the week, the Dow ended down 1.2%, at 13060; the S&P 500 closed down 0.7%, to 1398; and the Nasdaq edged down 0.4%, to 3081.  Following the weak jobs report, investors sought the safe haven of bonds in Friday's holiday-shortened session. Bond prices surged, with the FNMA 3.5% bond we watch finishing the week UP .92, to $103.16. National average mortgage rates eased again last week, according to Freddie Mac's weekly survey. Purchase loan demand rose to its highest level in months.  DID YOU KNOW?... The typical home purchased in 2011 was built in 1993, with three bedrooms and two bathrooms in 1900 square feet of space, as reported in the latest NAR survey.  >> This Week’s Forecast BUDGET, FED VIEWS, INFLATION... Wednesday's March Federal Budget should show the government running a big deficit, no surprise there. This will be followed by the Federal Reserve's Beige Book of economic observations from Fed districts around the country. Could be some good stuff. But the big reports will be PPI wholesale inflation on Thursday and CPI consumer inflation come Friday. The monthly numbers are expected to reflect annual inflation rates slightly above the Fed's 2% target. This is not good, as inflation cuts consumer buying power, sends mortgage bond prices lower -- and mortgage rates up! >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Apr 9 – Apr 13  Date Time (ET) Release For Consensus Prior Impact W Apr 11 10:30 Crude Inventories 04/07 NA 9.009M Moderate W Apr 11 14:00 Federal Budget Mar NA –$188.2B Moderate W Apr 11 14:00 Fed's Beige Book Apr NA NA Moderate Th Apr 12 08:30 Initial Unemployment Claims 04/07 355K 357K Moderate Th Apr 12 08:30 Continuing Unemployment Claims 03/31 3.350M 3.338M Moderate Th Apr 12 08:30 Producer Price Index (PPI) Mar 0.3% 0.4% Moderate Th Apr 12 08:30 Core PPI Mar 0.2% 0.2% Moderate Th Apr 12 08:30 Trade Balance Feb –$52.0B –$52.6B Moderate F Apr 13 08:30 Consumer Price Index (CPI) Mar 0.3% 0.4% HIGH F Apr 13 08:30 Core CPI Mar 0.2% 0.1% HIGH F Apr 13 09:55 Univ. of Michigan Consumer Sentiment Apr 76.1 76.2 Moderate >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... The Fed said it intends to keep the Funds Rate low for quite some time, which is what economists expect. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Apr 25 0%–0.25% Jun 20 0%–0.25% Jul 31 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Apr 25      <1% Jun 20      <1% Jul 31      <1%

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