Fed: Moderate Recovery Calls for ‘Extended’ Low Rates

The Federal Reserve left the key federal funds rate at the historically low 0-.25 percent level and – more significantly – maintained its “extended period” outlook based partially on weak housing and employment sectors. In the Fed’s overview of its policy-setting Federal Open Market Committee meeting today, it suggested that economic activity is strengthening with the labor market stabilizing. The FOMC last met in January.

Foreclosures vs. Homebuilders: Guess Which Side is Ahead?

Builders of single-family homes feel they have yet to make strides against an overwhelming number of discounted foreclosure deals, weak buyer demand and tight credit standards to fund new projects. Add a nasty winter season and you have an anemic 15 for March in the Housing Market Index from National Association of Home Builders/Wells Fargo, representing a 2 point drop from the previous month.

Calif., Fla. Led in Homebuyer Tax Credits Claimed in FY 2009

During the first nine months of 2009, there were 479,622 claims filed and granted for the first-time homebuyer tax credit, led by California, Florida and Texas, reported the Internal Revenue Service in its newly-released data book for fiscal year 2009. The claims amounted to $3.58 billion in credits, the IRS data shows. California and Florida, two of the hardest hit states in the ongoing foreclosure crisis, accounted for 22 percent, or nearly one quarter, of the total first-time homebuyer tax credits.

A 40% Sales Surge May Spur Toyota to Extend 0% Financing

After seeing a 40 percent sales surge in the first 10 days of March compared to a year earlier, Toyota will likely continue its first extensive zero-percent financing offers beyond this month. The automobile giant’s troubles have not abated following the recall of millions of top-selling vehicles for unintended acceleration issues, and yesterday a lawsuit filed by Orange County, Calif. prosecutors accused Toyota of unfair business practices.

Despite Recall Crisis, Toyota Sales Boosted by 0% Financing

Toyota’s widest zero-percent financing incentives are paying off with the troubled car company seeing its retail market share at 16.8 percent so far this month, up 10 percent from last March’s 15.2 percent — and up 31 percent from 12.8 percent last month when its massive recall for unintended acceleration was initiated. Toyota’s daily retail sales rate is running at about 47 percent higher than the same period last year, and about 71 percent higher than last month, according to Edmunds.com, the automotive resource site which tracks purchase intent and sales activity.

Ford Joins GM, Toyota in O% APR Financing Offers

After troubled Toyota announced last week its unusual move of offering zero-percent financing for up to 60 months on several models, General Motors followed with no-interest incentives of its own. Now comes word that Ford has expanded its incentive programs. Ford is offering zero-percent financing for 60 months on some models, including the Focus, Fusion, Milan, Edge, Escape and Mariner — or cash back options, the Detroit Free Press reported today.

Credit Card Borrowing Falls for 16th Month, But Stabilizing

Credit card borrowing fell for the 16th consecutive month in January, but the decline was the smallest since July — and overall consumer credit with auto loans included managed the first increase in a year, the Federal Reserve reported today. The unexpected increase in combined revolving and non-revolving credit was a surprise to analysts who expected a 12th-month with a decrease, because of predominantly tight credit standards among lenders. The Fed reported this week that most of its 12 districts “indicated banks remained cautious about lending.”

Study: 59% Pay Off Credit Card Balance Each Month

In another indicator that Americans are increasingly inclined to reduce their credit card debt, a sampling of 150,000 consumers last month shows that 59 percent pay off their card balances in full each month, compared to 46 percent a year ago. The study by BillShrink.com reinforces what the Federal Reserve has been reporting for several months. Revolving credit, or credit card balances, fell $8.5 billion, or 11.7 percent, to $866 billion in December, the 15th-consecutive monthly decline, the Fed reported last month.

30-Year Fixed Mortgage Rate Jumps Back Over 5%

The beleaguered housing finance market gave out more bad news today with the 30-year-fixed mortgage rate jumping back over the key level of 5 percent – to 5.05 percent for the week ending today, up from 4.93 the previous week, according to Freddie Mac.
A year ago the key long-term mortgage rate was at 5.07 percent. But it has bounced from a record low of 4.71 percent in December.

TransUnion: Average Credit Card Debt Still Slipping

With stricter credit card laws taking effect this week, there’s even more bad news for card issuers. The average credit card debt continued its slide in the fourth quarter 2009, down to $5,434, a 3.18 dip from the previous quarter and down 5 percent from a year ago, reported TransUnion. The credit bureau also reported that the national credit card delinquency rate, the ratio of card borrowers 90 days late, increased to 1.21 percent in the fourth quarter, up 10 percent from the previous quarter, but remained flat year over year.

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