Money Minute: U.S. Millionaires Club Grows; Inventory Woes Hamper Home Buying

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More Americans belong to the millionaire's club than ever before.

The number of millionaires in the U.S. increased by 7 percent last year. That's another 640,000 people. The Spectrum Group says that brings the total number of millionaires to a record high 9.6 million. The group's definition of a millionaire is net worth topping $1 million, not counting their primary home.

Millions of Americans say they want to buy a home this year, but the online real estate website Zillow (Z) says most won't be able to do so because there's a limited supply of homes for sale, prices are soaring and there are higher standards to qualify for a mortgage. On average, home prices jumped by 11 percent last year.

Safety problems are mounting for General Motors (GM).
A private watchdog group claims more than 300 deaths may be related to air bags that failed to deploy in some of the same compact cars GM recently recalled for ignition problems. The group blames GM and federal regulators for failing to investigate the defect trend.

Here we go again: another round of talk that stocks are headed for a correction. We haven't had one in quite a while. S&P Capital IQ says the market fell by nearly 10 percent in 2012 -- a 10 percent drop is the widely accepted definition of a correction -- and by 19.4 percent in 2011. The S&P 500 has reached a series of record highs during the past month.

Here on Wall Street yesterday, the Dow Jones industrial average (^DJI) tumbled 231 points Thursday, the Nasdaq composite (^IXIC) dropped 63 and the Standard & Poor's 500 index (^GPSC) slid 22 points.

Finally, a group of workers at McDonald's (MCD) has filed suit alleging the company failed to pay them for all of the hours they worked or for overtime. They filed class action lawsuits in California, New York and Michigan. It's the same group that's been pushing for higher wages and union representation.

-Produced by Drew Trachtenberg.


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11 Comments

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tmoschetti

".....prices are soaring and there are higher standards to qualify for a mortgage."

I believe you mean RETURING standards to pre-Fannie Mae/Freddie Mac/Demo-RAT contolled congress/White House days when down payments were required, and the borower had to SHOW they could actually pay back the loans.

Bawney Fwank, Thomas Dodd, the Negro Congressional Caucus, led the charge to get everyone into a hose whether or not they could afford the payments.
http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1

BUSINESS/FINANCIAL DESK | September 30, 1999 (NY Times)
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

And the rest, as they say, IS HISTORY!

March 14 2014 at 3:39 PM Report abuse rate up rate down Reply
dolalanne

All paper millionaires, when the DOW and S&P correct there will be that many that drop off the list.

March 14 2014 at 2:48 PM Report abuse +2 rate up rate down Reply
evanali

I am a mortgage broker and Realtor in San Diego, California...

1. I feel housing bubble is here- and real! A 2500 square foot house here (nice area) goes for a MILLION dollars! (was about $800k two years ago).

2. This time around...investors, and people with good jobs (or cash) are the buyers....So when/if the crash happens- these people will not be devastated like the middle class was in the last bust a few years ago (which is a good thing).

3. Loans are not that much tougher to get than they ever were (not counting the days of 'no documentation' loans that Clinton and Barney Frank championed in).

You DO need to have a real job; real money in the bank; show where the money came from and you do need to have decent credit (700 fico +).

However, these are the things you've ALWAYS needed to get a house! (except for the liberal guidelines that were in place in early to mid 2000's that helped create this monster).

So...don't believe all that you hear!

If you want/need a new house- go check it out...find one that's in your price-range and go for it! DON'T chase it...don't bid it up!

One thing learned from the last bust: prices DO come down again...be patient and buy at the right time.

If you don't HAVE TO buy a house now- I'd wait....til you find the right combination of price; affordability and amenities that you've been waiting for!

Happy hunting!

March 14 2014 at 2:02 PM Report abuse +3 rate up rate down Reply
usapaydirt

Well it doesn't take beyond a 6th grade education to see the writing on the wall. Poor trade laws, policies and conflicts of interest in Washington, combined with job eliminating technology, are creating rampant income disparities. There is a tipping point of no return, that I believe we have already crossed. The businesses closing in droves on main st . USA, is the canary in the cage. Once enough buying power dries up ,then money becomes worthless no matter how big your stack.....

March 14 2014 at 11:41 AM Report abuse +6 rate up rate down Reply
1 reply to usapaydirt's comment
k4jlp

100% CORRECT

March 14 2014 at 11:52 AM Report abuse +2 rate up rate down Reply
tmlbtb

Zillow says that homes aren't selling because of higher requirements to obtain a mortgage. But don't forget that a lot of new employment is in the service industry, selling hamburgers, and that NAFTA has allowed many Corporations to ship their jobs overseas that a lotof these people could be working in. We are dismantling this country because of Special Interests and nobody seems to care. All of this will come back and haunt us, our grandchildren and especially our great-grand children.

March 14 2014 at 10:43 AM Report abuse +9 rate up rate down Reply
scottee

I wonder how many politicians are in the club? and why?
and consider this....

what if congress scrapped the 73,000 pages of tax code
and everyone just paid a small national sales tax with no deductions for anyone for anything?
they would probably collect more, everyone would pay some, the rich would pay more, we could close down the IRS, congress would have a lot less power, and April 15 would just be another spring day.

March 14 2014 at 9:59 AM Report abuse +8 rate up rate down Reply
2 replies to scottee's comment
bchrist751

Most of them are in the club and for those who are not they will be if they stay elected.

March 14 2014 at 10:47 AM Report abuse +3 rate up rate down Reply
bchrist751

Your succession is to simple.... and since it is so simple and logical politicians will not support a flat tax /national sales tax to replace the current IRS code because Politicians would not be able to exchange tax favors for votes.

March 14 2014 at 10:51 AM Report abuse +2 rate up rate down Reply
niceguyarl

I don't understand why net worth exclude the primary home. If today I have $50,000 in the bank, it is included in my net worth, but if tomorrow I use it to pay down my mortgage by $50k, suddenly my net worth has dropped by $50k. That makes no sense.

March 14 2014 at 9:56 AM Report abuse -2 rate up rate down Reply
Davie2743

Those who recently so;ld their homes must be stewing because all home prices will soar it's all about supply and demand.

March 14 2014 at 8:56 AM Report abuse -8 rate up rate down Reply