US Housing Starts Continues Increase - Hits 2008 Levels

The U.S. housing starts rose more than most economists expected in January. The rise was caused by a surge in new rental property boosting hopes the housing sector could help economic growth this year.

The Commerce Department reported on Thursday that housing starts climbed 1.5 percent to an annual rate of 699,000 units.

Starts of multi-unit buildings, which are often rented, jumped 8.5 percent last month. New construction on buildings with five units or more increased 14.4 percent.

Groundbreaking on single-family units, which make up a much larger portion of the sector, fell 1.0 percent. This might appear as bad news, but in actuality it is positive news because the current inventory of single family homes continues to steadily drop. In Houston for January the number of sales actually increased in 2011 compared to 2010, and the inventory significantly dropped. The average price of single family home increased just below 1%. All this data continues to show that the housing market is improving and investors and some home owners realize that prices and loan rates are at all time lows.

U.S. Housing Starts

While housing starts are still increadibly low when compared to 2006 (2.2 million) we must remember that during the housing boom builders were flooding the market. We do not want to witness those insane levels again until the population increases substantially.

Tax Review - Debt Relief Forgiveness Act of 2007

The IRS requires anyone that received forgiveness from a previous debt to report that amount as income. However, the Mortgage Relief Debt Forgiveness Act of 2007 allows individuals to exclude the amount forgiven on their principal place of residence. This particularly helps individuals that were under water on their mortgage and thus utilized a short sale to unload the property. Currently the exemption applies from 2007-2012.

Obama is now seeking to have this act extended through January 1st of 2015. DSNews

To learn about what qualifies read IRS publication 4681.

Here are some more examples of debt which is not taxable.

• Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
• Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
• Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.

For specifics you can also contact a certified professional accountant.

Unemployment rate drops to 8.3% on strong jobs numbers!

The US economy created 243,000 jobs in January dropping the unemployment rate to 8.3%. Even better were the revised November and December numbers that increased by 50,000 jobs. The biggest gains were in the professional and business service category. The markets have responded favorably as all currently experiencing over 1.0% gains.

For more details head over to CNNMoney.