Ahead of President Elect Obama's first press conference of the new year we had some bad employment news. After a nice 20% rally since November lows stocks are finally giving back today after news from private sector ADP Employment Services that jobs fell more than expected in December. The ADP report has not been very accurate in recent months, in comparison to data from the bureau of labor statistics, but ADP said it has made methodological improvements. I guess we'll have to wait until the government releases its statistics this Friday to know for sure.

I will be discussing the economy, housing and financial markets... and my gameplan for 2009 profitable foreclosure investing tonight in my Free New Investor Webinar. Make sure you register in advance here. I will start at 6pm Pacific (9pm Eastern) speaking for about 90 minutes and will stay on afterwards in our Webinar Questions and Answers Chat. Talk to you then!

No surprise, November's job losses and weak consumer confidence dampered home buyers from signing contracts. Pending Home sales after holding fairly stable for a year fell 4.0%. However... the impact of December's big drop in mortgage interest rates to near 50-year lows is not reflected in current data.

According to the National Association of Realtors (NAR) with a proper real-estate focused stimulus from Obama's administration, home sales could rise more than expected, by more than 10% to 5.5 million in 2009, and easily begin to stabilize home prices in many parts of the country. Stable home prices reduce foreclosure pressures and lay the foundations for a solid economic recovery.

Here is the regional breakdown. NOTE that the West has been UP for each month for the majority of 2008 vs 2007.

The West was down 2.4% but remains 19.3% HIGHER than a year ago. (Read more about the California Rebound Here.)

The South declined 2.2% and is 12.7% below a year ago.

The Midwest fell 6.7% and is 10.1% below a year ago. 

The Northeast dropped 7.2% in November and is 14.6% below a year ago.

NAR advocates expanding a $7,500 tax credit to all home buyers and eliminating the repayment feature, and permanently raising loan limits to bring down interest rates for many buyers in high-cost areas. We also need to expedite short sales and unclog the mortgage pipeline.

NAR’s housing affordability index, which looks at the relationship between home prices, mortgage interest rates and family income, is on track to match a record high set in 1972. I blogged about our incredible affordability on December 21st (read it here).

Here are the actual stats from October (the most recent available). (This does not reflect today's much lower interest rates, hence we have a much higher affordability factor than this report shows.)

Median Home Price: $181,800

*Mortgage Rates: 6.23%

Monthly P & I  Payment: $894

Payment as a % of Income: 16.7%

Median Income: $60,840

Qualifying Income (Based on 25% qualifying ratio for monthly housing expense to gross monthly income with 20% down payment): $42,912

These numbers are well below the long term average of 23% from 1981-2007. Lack of affordability is what caused the housing market to peak and extremely high affordability is what is going to cause it to rebound and run again.

Find out how you can participate in the next great housing boom, buying foreclosures for a discount and either quickly selling them for a profit or holding them for positive cash flow and long term gains... TOMORROW NIGHT in my New Foreclosure Investor Webinar. It's Free. Make sure you register in advance HERE.

Talk to you tomorrow!

Oops, it looks like our Holiday Sale that expired yesterday is still up!

If you are lucky enough to be here, you can still take advantage of our Final 2008 Holiday Sale, and get in early to the biggest housing boom in 2009 now, while saving a bunch of money!

Make sure you LOGIN to Foreclosures.com so you can click on our HOLIDAY GIFTS specials page. I am sure this will be down by Monday morn, so take advantage of this slip up HERE: http://www.foreclosures.com/specials/

Happy New Year! :) Enjoy your time off with you family.

And talk to you next week... Wednesday, January 7th, is my next Live New Investor Webinar. I've got tons to cover on our gameplan for 2009, so don't miss out. You must register early, as we do fill up HERE: http://www.foreclosures.com/pages/TeleConf.asp

It's great to see good housing news on the last day of a horrible year... plus don't forget your New Years Gifts Expire Today!

1st... Interest rates dropped to their lowest in more than 30 years as the government stepped up efforts to revive the housing market and mortgage applications remained at their highest level in more than 5 years last week, as borrowers took advantage of attractive rates and rushed to refinance their home loans. The average rate for traditional, 30-year fixed-rate mortgages decreased to 5.03%, according to the MBA report. That’s the lowest in data that goes back to 1971.

Interest rates have plunged since the Federal Reserve said last month it would buy up to $500 billion in mortgage-backed securities in an effort to bolster the long-suffering housing market.

3rd... The Mortgage Bankers Association’s index of applications announced today that to purchase a home or refinance a loan it rose to 1,245.7, the highest level since 2003, from the prior week’s 1,245.4. The group’s purchase gauge climbed 1.4 percent and the refinancing measure fell 0.4 percent. Applications surged earlier this month to the highest level since July 2003, when refinancing activity boomed at the peak of the housing market. More than 80% of applications came from borrowers looking to refinance at more affordable rates.

Today's data and other recent data suggest there is potential for relief in the housing crisis, and the relief will spread when the Federal Reserve fulfills its promise to expand its initiative to purchase agency and mortgage-backed securities. A further push could arrive in January, when President-Elect Obama is inaugurated. It is possible that Obama's fiscal stimulus plan will include incentives for the purchase of new homes, either through tax incentives or low mortgage rates.

2009 is shaping up to have a huge bull market in housing. Are you going to participate, or watch and wait and kick yourself in 2010? Stop thinking and start doing!!

Tomorrow is 2009, thank goodness. And today is your last day to take advantage of our New Years Resolution Gifts from Foreclosures.com!

LOGIN RIGHT NOW and then GO HERE to Take Advantage of our GREAT GIFTS that EXPIRE TONIGHT at Midnight:  http://www.foreclosures.com/specials/

And HERE for Your Last Chance to Reserve Your 2009 3-Day Lab with our BIG 2008 DISCOUNTS that EXPIRE TODAY at NOON:  http://www.foreclosures.com/specials/2008yearend/lab.asp 

Please Call Jim or Judy at 800-310-7730 x2 BEFORE NOON PACIFIC TODAY, as they will be leaving early for the holiday.

Have a Happy and Save New Years! Enjoy!

Along the same "housing recovery" theme that I posted earlier today... Doug Kass recently came out with his list of 20 possible surprises for the coming year. 3 of them I had to share with you, as if he is right, as I expect he is, housing is going to surprise everyone in 2009. Read on...

But first, a quick reminder... Your 2009 Holiday Gifts EXPIRE TOMORROW 12/31/08 Midnight! You Must Login First to See Your Special... then Go HERE: http://www.foreclosures.com/specials/

And Your Last Chance 3-Day Lab Discounts EXPIRES TOMORROW TOO! More HERE: http://www.foreclosures.com/specials/2008yearend/lab.asp 

Call Jim or Judy asap at 800-310-7730 x2.

Kass: 20 Surprises for 2009

2. The U.S. economy stabilizes sooner than expected.

3. The U.S. stock market rises by close to 20% in the year's first half.

I will cover the details of each of his points, plus alot more, when we meet on January 7th in my New Foreclosure Investor FREE Webinar at 6pm Pacific (9pm Eastern). Plus 2 Lucky Attendees have a chance to win a FREE NANO loaded with my Mastering Foreclosures homestudy course and alot more for FREE! Make sure you register early as we have a very full house already. REGISTER HERE or Call 800-310-7730 x2. Talk to you next week! Happy New Year!

Had to share Cramer this morning… his original call for a June 2009 Housing Bottom seems too late. It is happening right now! Just as I've been saying… you must read and ACT NOW! 2009 is going to be the best year in housing. Are you going to be a part of it or watch and kick yourself in 2010?

Don't forget! Your 2009 Holiday Gifts are Expiring this Wednesday, 12/31/08 Midnight! Call Jim or Judy asap at 800-310-7730 x2. You Must Login First to See Your Special... then Go HERE: http://www.foreclosures.com/specials/

And Your Last Chance 3-Day Lab Discounts Expire Wednesday! More HERE: http://www.foreclosures.com/specials/2008yearend/lab.asp 

Housing: the Bullish Story of 2009
By Jim Cramer
RealMoney Columnist

Drats. I want housing to bottom in June of 2009. But when I read the articles by Doug Kass and Tony Crescenzi (see below), I think I might be late!

We are running out of homes, running out of inventory and we are lowering mortgage rates to the point that if you can't stay in your home, I will buy it. Getting credit to build more homes is almost out of the question for all but, say, Toll Brothers (TOL), and it doesn't need money! Do not focus on the previously-owned-home sale declines -- they don't tell the story.

Focus on the 372,000 unsold new homes and the numbers of new homes being built by the homebuilders -- certainly not enough to replace the number that get sold, and they will get sold because of the 5.125% mortgage money that's coming down as we just got the new target pricing from the Fed, which should drive rates down big time.

Now I know that the existing-home sale inventory is a problem, but that can be worked off. People seem to forget that Americans have families, get divorced and have so many kids that they have to move.

People seem to forget about immigration, which can add to the natural buyers. There is only so long that you can put off buying a house, and the declines in the prices of homes are staggering in many areas. Rates down, prices down -- that's what causes people to get off the sidelines. And I want to be very clear, the bottom will not be put in unless houses fall 30% to 40% in the regions you are focused on.

That's what moved the inventory in the Inland Empire in California and West Coast Florida, the two areas that started falling first and bottomed first. Go read Tony and Doug. You will see what I mean. Housing will be the most bullish story of 2009, just as it has been the most bearish story of 2006-08. That could lead, ultimately, to a turn in the mortgages held by CDOs and the benchmarks of the synthetics.

It can happen and it can happen fast, provided:

1. The homebuilders do not get TARP money.

2. President-elect Obama proposes a tax credit for buying a home.

3. We get some homebuilder bankruptcies so we even fewer new homes are built.

4. The Fed helps take mortgages down to 4.5%, which would make it nuts not to act, if only just to borrow the money and buy a property, any property.

I think very few people are ready for it. Cramer.

I will be off this week to enjoy the new snow in Squaw, but when I return, watch out. Both sleeves will be rolled up and ready to dig in! I can't wait for my January 7th New Investor Conference Call! Have TONS to share! Make sure you register early, this one is going to be a sell out! Register Here NOW.

Happy New Year!

Are you ready to make 2009 your best year ever? If you've been reading my blog, you can see the opportunities are everywhere. There is no better time than now to change your direction so you can have a new destination for 2009!

Check your emails asap everyone. There's a gift in there for you! Can't wait to see? Call Jim or Judy asap at 800-310-7730 x2.

You Must Login First to See Your Special... then Go HERE: http://www.foreclosures.com/specials/ 

Merry Christmas and Happy New Year!

The Fed's recent announcements have pushed 30-year fixed-rate mortgages to historic lows at rates now hovering around 4.5%. We have not seen those rates since the 1960’s. Yes, you’ve read right.

“With the Federal Reserve’s announcement that they will back mortgage-related bonds securities, it’s shot confidence into the market,” said Robert Rahal, president of Shore Mortgage in Birmingham.

“If you can do it, this is it, this is like a fire sale,” Rahal said.

1% Drop in Rates = 10% Decline in Prices

Credit Suisse analysts, led by Daniel Oppenheim, wrote in a recent research note that a one percent point decline in mortgage rates has the same impact on affordability as a 10% decline in housing prices. In addition, lower mortgage rates and better affordability will also help to limit a decline in home prices.

From 2005 to 2006 the average mortgage payment went from 25% of the monthly income to 37%. That just proved to be too much and buyers stopped buying. Lack of affordability is what caused the bubble to burst.

Most Affordable Since 1994

Since then both house prices and mortgage rates have fallen dramatically. Currently housing is the most affordable it's been since February 1994 when the mortgage on the median-price home equated to 18% of the median income.

Credit Suisse estimated that the mortgage payment on the median-price home now represents 16.7% of median household income, down from 21% this past summer. That's well below the long-term average of 23% from 1981 to 2007.

"Affordability is also returning to attractive levels in key building markets. We expect that this improved affordability will help and will likely lead to at least a bottoming of sales in 2009” Credit Suisse reported.

They continued, “We have also seen some signs of stabilization on foreclosure pricing in several of the hard-hit markets as of late, which may indicate a bottom in home prices in those areas."