Chart: Federal Reserve Bank of Atlanta

Chart: Federal Reserve Bank of Atlanta

You may have heard some buzz recently about first-time home buyers, with millennials sitting on the sidelines instead of jumping into the housing market.

Well, it’s not just them. Basically, Americans in every age group under 65 are showing historic reluctance to own homes, according to an email from Ellyn Terry, an economic policy analysis specialist at theFederal Reserve Bank of Atlanta.

First-timers represent only 30% of the market, when they should be more like 40% — historically, the long-term average, according to the National Association of Realtors.

(This story first appeared on Credit.com. Read it there.)

And just last week, Credit.com reported on a survey that found young buyers want to skip the starter home and wait for their dream home.

Why? Terry speculates that high debt, high cost, as well as shifts to a more urban society and shifts away from the desire to own homes are just a few of the reasons. But those factors are hardly limited to young people.

“To the extent that these factors are true [for Millennials], they may be affecting the decisions of other generations as well,” she wrote in a recent post titled “It’s Not Just Millennials Who Aren’t Buying Homes.”

First off, homeownership rates for all Americans — young or old — have fallen since the housing peak of 2005. That makes sense; most weren’t spared by the housing bust.

It’s surprising to learn that homeownership rates fell even harder among older Americans, however.

“Homeownership among young Generation Xers has fallen by a bit more than the millennial generation since the housing peak — declining 11 percentage points since 2005 compared with a decline of 9 percentage points for those under 35-years-old,” Terry wrote.

Historical context is critical, however. Homeownership rates in the last decade were artificially elevated because of the housing bubble, so it’s worth comparing them to levels before the boom. By some measures, the overall homeownership rate — at around 64% now — stands at roughly what it was in the mid-1980s and ’90s, before the factors that started the boom were set in place.

That hardly tells the whole story, however. Ownership rates for every under-65 age group — under 35, 35-44, 45-54, and 55-64 — have fallen to below even their mid-1980s rate. So why is the overall rate flat?

You can see what’s going on in the chart below — the rate of older owners is higher than the mid-80s, while the rate among all other groups is lower.

In a different study, financial adviser Joshua Brown cites Bank of America research claiming the effect is even more dramatic for much older Americans. Among the 75+ crowd, homeownership rates soared from 73.6% in 1994 to 78.6% in 2014 — a span during which the rate fell for everyone between the ages of 25 and 65.

In some ways, this makes sense: Americans are living longer, and staying in their own homes longer. That means a bump in the total number of older Americans, “an age group that always has higher homeownership rates,” according to Terry, is skewing the statistics. But it’s also another sign that the underlying fundamentals of America’s housing market remain shaky.

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By Dan Maccarone and Bob Sullivan

The voice is soothing, even sultry, as it cuts through the otherwise empty, black night.

“Overnight, under the covers,” he says, the bass in his voice turned up almost to Barry White levels. He invites himself into bed with you. “Me here, you there.”

Steve Somers is miles away. But suddenly, you aren’t alone.

Co-author Dan Maccarone

Co-author Dan Maccarone

He’s not offering sex. He’s offering sports. Specifically, “schmoozing S-P-O-R-T-S.” But he might as well be offering sex. Somers helped invent the category of overnight sports talk radio shows in the late 1980s, when there was one all-sports station, WFAN, in New York. Within a decade, there were hundreds of copycats in the lucrative new category. Steve’s late-night style worked because he understood a profound truth about human nature: Most people are lonely. Really, really lonely.

It’s no mistake that Somers’ taglines hinted ever-so-gently at another 1980s late-night cash cow — 1-900 telephone numbers. In fact, in graduate school, Bob wrote a paper comparing Somers’ language to the then-ubiquitous TV commercials hawking 1-900 sex phone lines. After all, they were both in the same business. And so, most likely, are you.

The loneliness business.

Most people’s motivations are pretty primal. After they have food, water, and shelter, they want connection. Yes, they want a new television, or a pair of shoes, or a ride, or a piece of software, or a beer. But they really want a bridge. A bridge to other people. They want love. Or at least, like. Lots and lots of like.

Sell someone a thing, and they’ll drop you the moment they find that thing somewhere else. Solve someone’s “like” problem, someone’s loneliness problem and you don’t just have a customer. You have a connection.

This is most obvious in bars, of course. Bars don’t sell liquor; they sell social lubricant. Bud Light tastes the same everywhere. And it’s about 90 percent cheaper to drink it alone in the basement. But (most) people would rather pay $6 for glass of the stuff and…..and what? And a chance at getting some likes. That means if your patron is getting only beer at your bar, they’ll be bar hopping to somewhere else pretty shortly. The difference between “one-and-done” and a whole night of fun could be as simple as a cheery hello and just a few likes.

GETTING TO HELLO

Corporations kill — and spend billions — for the kind of loyalty that can be won, or earned, for free.

A bartender may just be a “single-serving friend” — like someone you strike up a lovely chat with while waiting for a flight that’s delayed. But he’ll make you forget the delay, and leave you feeling comfortable, rather than awkward, while waiting or a friend who is late. See what’s happened there? There’s magic in making a stranger feel at home. Irish pubs often have a saying over the door: “There are no strangers here, only friends who haven’t met yet.” That’s not a slogan; it’s a business model. Teach a newcomer that it’s ok to walk into your bar alone, that uncomfortable feelings can drain away and even turn into warm familiarity, and she will come back: Even, perhaps, alone – a real business coup.

When Dan used to bartend Sunday Funday, that same principle applied. The goal wasn’t to sell a single beer, it was to create an atmosphere that kept pints of Blue Moon full, orders of pretzels and fries flowing, multiple groups (many that had just met) laughing together over Cards Against Humanity, and a steady ring as customers’ joy flowed into the cash register one dollar at a time. That last bit may seems out of place, but when you’re in the business of creating continued splashes of happiness, that is an important part of it. The difference is there’s a humanity to it that spending billions of dollars just can’t fake. There’s the “genuine factor.” And the best bartenders know how to make every customer feel special, hand-hold them through whatever’s going on in their world that day and be the best listener that person has ever met.

Perhaps you aren’t buying that a single smile and hello is enough to inspire a lifetime of loyalty…and you’re right. It’s only a first step. That must be followed quickly by a second step: bringing the consumer into the community. Bartenders don’t have time to engage in long chats with patrons. That’s just not scalable. In fact, the art form requires learning to tell stories or engage in interactions that take no longer than the time it takes to mix an Old Fashioned. The second step is equally important. Bartenders must connect people. They must make introductions, the way a good party host does.

GETTING PAST HELLO

Finding commonality is, of course, the easiest way to ease lonliness. At Destination, the easiest way to bring people together was sports. Spot a few people sitting by themselves, all cheering for the Pittsburgh Steelers or Boston Red Sox, and there’s your opportunity. Perhaps a few shots for them brings them together, they start talking and they’ll now while away the afternoon together as fast friends. The bar has won.

Trivia Nights do the same thing. When Destination partnered with GawkerTV for a video trivia night, some teams came together, but often groups of two or three merged to spawn temporary friend groups united around their collective ability to outsmart (out snark) their fellow patrons. Again, for those two hours, the bar has won.

GETTING TO THE PROBLEM

Of course, not everyone is great at conversation. And not everyone wants to feel like they are at a real-life LinkedIn or Tinder meeting. That’s where the other truth about the loneliness business rings true.

We are all therapists.

Every day, in every interaction, people arrive at your door with The Problem. Everyone has one. Good companies offer solutions to such problems. But smart businesses begin their sale by selling nothing more than understanding.

With most human beings, it takes less than 5 minutes to find out what The Problem is. The husband won’t listen. The mortgage is too much. Users can’t find the buy button on the website. Customers use your store as a showroom and only really spend money online. Employees hate you. Investors hate you.

They say there’s no vice like advice, and they are right. A good barman doesn’t listen to a customer for 10 seconds and then bark, “Just divorce her.” A good barman – like a good therapist — lets the customer process The Problem, interjecting only clever pieces of wisdom, and only when the time is right. Anyone can offer advice, or a piece of software, or a redesign. People often land at your bar, or at your consulting firm, because they are hurting. Comfort the afflicted, and you’ll something far more valuable. You’ll “get it.”

Nothing is more powerful than understanding. Anyone can take a fee; very few people “get it.” If you simply sell a solution to someone, you will likely never see them again. If you sell them understanding, they’ll come back again and again. This is the best way to inspire loyalty, because no one has just one problem.

Doing this can be scary as a business, because offering real comfort and understanding might put you in the uncomfortable position of recommending something that won’t profit you – at least not right away. When Dan was discussing design for the original Hulu, a seemingly crazy idea came up. What do you do with consumers looking for video that’s not on Hulu? The obvious answer was to nudge them towards “similar” offerings that were on Hulu. “You’re looking for ‘Lost’? Sorry, we don’t have that. How about ‘Star Trek’ or ‘Lost in Space’?” The response from any normal person to that question would be “No, I want to watch ‘Lost.’ Thanks for nothing Hulu.” After which they’d most likely head on over to Google and type in “Where can I watch Lost on for free?”

That’s what most media and entertainment products were doing back then, but the Hulu team chose to go a different route.The right answer was to help consumers find what they were looking for, even if it was on another site. So that’s what Hulu did. Yup, it sent customers to the competition — “Sorry, we don’t have Lost right now. But you can go watch it on ABC.com” — a not uncontroversial decision for a young company. Why? Because in the Internet Age, your customers are going to find what they are looking for anyway. You might as well be seen as helpful, rather than as an obstacle.

Hulu had a choice: Right at that moment when a TV show fan was fumbling around looking for entertainment to keep their mind off the real world, it could be a friend or just a busineess. It chose to make connections. It chose to give people a warm, fuzzy feeling. Plenty of Internet firms now do this. Kayak, for example, steers visitors towards cheaper travel deals, even if it doesn’t make them money. News sites – smart ones, anyway – liberally link to competitors when they have scoops and better stories. The fact is that most people don’t know what sites they’re visiting these days, so take the opportunities that come your way to stand out.

LISTENING BEGINS ON THE INSIDE

It’s not always the consumer that needs therapy or, rather, to be understood. Sometimes it can be your colleagues — people inside an organization that aren’t necessarily being heard. Regularly, when Dan’s working on products, whether it be with startups or multinational conglomerates, the same issues arise: people aren’t being heard. Taking thirty minutes to sit down and understand where someone has issues with their responsibilities, peers, boss, process, or all of the above can go a long way. Even when they’re looking to figure out how the make an overall product better for consumers, hearing how to streamline a person’s job could actually end up making it better for everyone.

Years ago, when Dan was redesigning Newsweek’s site, employees complained about the amount of “process” required just to populate articles on the homepage. It was clear in listening to the magazine’s team that there was a lot of frustration and too many steps. In the end, creating a more automated process freed people up to do the more interesting facets of their jobs as editors and, in the end, simplified the experience for customers. Everyone was happier.

The same is true in bars. Whether it be a free gift, a friendly bartender, a distinct enhancement to a common cocktail (at Destination, Dan used to add a splash of Guinness to the bar’s signature Bloody Marys), or a unique offering (Destination turned around slow Monday nights by creating “Mac and Cheese Mondays” which gave customers a variety of macaroni and cheese options for every drink they bought), the slight differentiating factor can mean the world to someone and inspire them to come back. Hopefully, with friends.

Don’t get Netflix’d

On the other hand, there’s cable television. Big firms like Comcast rank near the bottom in customer service year after year, and often do all they can to trick customers into paying more than they should. That works for a while. But it’s no surprise that cable is getting “Netflix’d.” The movie service has done this before.

In his book, The Plateau Effect, Bob goes into great detail about the rise and fall of video rental giant Blockbuster. Many folks erroneously think that Blockbuster was a victim of changing times and technologies. Not true! Blockbuster, a Goliath, was slayed by Netflix, a true David at the time. Its business model in the early days sounds straight out of the Pony Express archives. It *mailed* movies to people. Consumers didn’t dump Blockbuster because Netflix was better. They dropped Blockbuster because THEY HATED Blockbuster. With the passion of a thousand fiery suns. Blockbuster famously charged insane late fees, often far exceeding the value of movies rented, and went after “debtors” with the ferocity of debt collectors. Blockbuster had reverse goodwill; customers couldn’t wait to dump them and say goodbye to late fees. Incidentally, that was a big part of Netflix’s initial marketing.

And so it is with cable. Cord cutting is the new mortgage burning. People don’t just cancel cable TV; they brag about it at parties. Forget about helping people with loneliness; cable companies, with their endless “please come back” mail offers, are now a lot more like a crazy ex-boyfriend or girlfriend.

All industries face the challenge of serving customer needs versus barrelling over customers just to make money. Sometimes the issues are less offensive than how the cable industry has backed its customers into a corner, but other times it’s because corporations can’t see what people want or need because they are blinded by their own agenda.

Several years ago, Dan was doing research for a large media company that wanted to build a variety of services for families – a large component of their audience. During this research two findings surfaced very quickly: 1) the products this company wanted to create didn’t resonate at all with parents and 2) there was one single service that every single respondent independently begged for without any prodding. Clearly, this was a product that the media company could and should build.

Towards the end of the research, Dan’s client sent him an instant message in all caps from behind the one-way mirror where she was watching. “GET BACK HERE RIGHT NOW.” After excusing himself, he entered the observation room and his client’s face was bright red and her team was quivering behind her – it was like watching a Disney villain getting ready to strike. “This is awful,” she said. “They don’t want any of the products we’re building!”

“I disagree,” Dan replied. “This is great. There’s only one thing these people want and you can easily give it to them.”

“But it’s not on our roadmap.”

“Then change the roadmap.” It really was that simple. They weren’t building houses or testing medication. They were making a website and changing it would have cost them nothing, probably saved them money in the long run. But instead of listening to their customers, solving a problem and inspiring loyalty, the company went on to build three tools that nobody used and ultimately ended in a digital media graveyard.

Companies that forget about the importance of connection are ripe for disruption. Yes, Uber is cheap and convenient. But Uber has risen to power so quickley in large part people really HATE taxis, and for good reason. Everyone has the story of getting taken for a ride, not to mention the smell.

Treat your friends like that, and you’re going to be lonely. Treat your customers like that, and your balance sheet is going to get pretty lonely, too.

More Barstool MBA:
The Brand as Experience >
The Well-Timed Free Gift >
Everyone Will Steal From You>

ABOUT THE AUTHORS
Dan Maccarone is the co-founder of Charming Robot, a digital product design agency in NYC. He also hosts the podcast Story in a Bottle, chronicling the stories of tech and media professionals. Follow him on Twitter@danmaccarone.

Bob Sullivan is a New York Times bestselling author and a Peabody award winning journalist. His work can be found at BobSullivan.net and you can follow him on Twitter @RedTapeChron.

 

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RealtyTrac data

RealtyTrac data

There’s been a lot of talk lately about why first-time home buyers are sitting on the sidelines. Here’s some data that may help explain why: Low-cost starter homes are simply disappearing from the market, and the ones that still exist are being gobbled up by investors and turned into rentals at a stunning rate.

The stark numbers, prepared exclusively for Credit.com by RealtyTrac, tell the story. Back in 2000, 70% of all single-family homes were sold for under $200,000. Five years ago, the rate was 63%. This year, the rate is 48%. (All rates include only January to May sales from each year, for consistency.)

In other words, sales figures show that inexpensive homes are disappearing from the market.

(This story first appeared on Credit.com. Read it there.)

That’s not the lowest-ever rate. But the only other time this century that sub-$200,000 sales fell below 50% was during the height of the housing bubble, when prices were far above historic norms and lending standards were almost non-existent. Today’s lack of $200,000-and-under inventory is leaving first-time home buyers with few decent options. And many of those options are being soaked out of the market by people who have no intention of living in those homes.

Another proxy measure for starter homes is three-bedroom homes, exclusive of price. When the market is examined that way, there’s a little good news, but a lot of bad news. The share of three-bedroom homes sold around the country has not fallen — in fact, it’s remained consistent at just more than 50% the past 15 years, RealtyTrac says.

But that datapoint obscures an ominous reality. About 29% of three-bedroom homes purchased in the past 12 months are not owner-occupied; in most cases, they are now rentals.

“After looking at the data, the conclusion I come to is that the starter home has not disappeared, but a starter home sold in recent years is much more likely to be a rental property than a starter home that was sold before the Great Recession,” said Daren Bloomquist, senior vice president of communications for RealtyTrac.

That means young families looking to buy smaller homes must duke it out with investors over a dwindling supply of cheap properties.

The homes-to-rentals conversion process began in earnest during the housing bust, when investors could scoop up foreclosed homes at bargain prices and turn them into rentals. But it’s clear that process has continued even as distressed properties have been gobbled up and taken out of the market.

In a separate study from last year, RealtyTrac found that cities like Memphis, Charlotte, Atlanta, Jacksonville and Oklahoma City had the highest rates of institutional investor single-family home purchases.

The new data is consistent with a prediction made by The Urban Institute last year, which suggested that between 2010 and 2030, the majority (59%) of the 22 million new households that will form will be rentals, while just 41% will buy their homes.

Renting instead of buying can be a wise choice.

Yet there are plenty of reasons young adults are hesitating to buy homes, the Urban Institute found — chief among them, the “American Dream” of homeownership took a beating during the housing bubble collapse.

But mortgages offer one advantage that renters don’t have: consistent monthly payments. As the supply of available rental properties shrinks in many U.S. cities, rents are skyrocketing at record rates.

And some observers warn there will be unintended consequences as the shift from a nation of buyers to a nation of renters continues.

“Most household formation in this cycle has been renting,” said housing expert Logan Mohtashami. “Are we at the beginning of a sociological movement away from middle-class homeownership and toward a cultural split between the investment property landlords and their renters, both of whom may have less personal investment in neighborhood security, local schools and shared public facilities compared to primary homeowners?”

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WASHINGTON D.C. — Here are my prepared remarks from this Wednesday’s Consumer Federation of America awards banquet. There is no video, so I’ve  matched an audio file with a few images. I’m sorry the audio isn’t great — it’s from Michael Shreiber’s iPhone — so if it’s too hard to hear, you can read the text below. It was an amazing, flattering, humbling night.  Also below is a quick bit of the talk given by U.S. PIRG’s Ed Mierzwinski to introduce me.

(Click here to watch/listen on YouTube)

It is so wonderful to be here tonight, among all you folks who spend all your days, and many nights and weekends, fighting to make our country a little bit more fair. I’m honored that you took a little time out from that fight to have dinner here with me tonight, and floored that I’m in front of you getting an award. I’m also well aware that I stand between you and a well-earned good night’s sleep, so I’ll be brief.

I’m thrilled that this award is named for Betty Furness.  As a kid in north jersey I grew up watching betty, cheering for Betty. And it’s no small thing that I wathed with my parents, a high school teacher and a secretary — who also cheered for Betty.  I picked up a lot from that

As you know, Betty broke a lot of barriers, for women, for television, for consumers..but the one she didn’t break was age.  She felt she was prematurely pushed off the TODAY show when she still had more to give.  Age discrimination hasn’t gotten nearly the attention it deserves — I’m doing some reporting on it now — its a bad problem that’s only going to get worse.

Speaking of getting worse, let me just take a moment to talk about journalism.  I’m very, very honored to receive this award, but I’m a little concerned that you picked me because you had trouble finding another living, breathing journalist.  Certainly you had trouble finding another living, breaking consumer journalist.  There’s a stark reality facing my profession, and you all know it well. Thousands of years of collected journalism experience have been vaporized as journalism wretchs through this time..and I firmly believe we all see the consequence of that, every day, as we see the race to the bottom that is our national discourse.

When journalism is done well, it gives voice to those who would otherwise be voiceless in society. I’m hear to warn you that journalism itself is in danger of becoming voiceless. But maybe…just maybe…there’s something you and I can do about that.

As many of your know, I left NBC News two years ago to set out my own shingle, thinking that was the better way for me to continue covering the topics I care so deeply about. There was a real danger that my voice would slip into oblivion. But thanks to some good fortune and good partners — my first partners are here tonight, the good folks of Credit.com, who threw me my first lifeboat — I’m proud to say that 874 stories later — no kidding – I’m still standing.

But hundreds, even thousands, of my colleagues are not.  I miss them. I need them. You need them.  Our country needs them. So I am working with the University of Georgia’s Cox Institute for Journalism Innovation on something I call sustainable journalism.  Can journalists facing the awful dillema of working in PR or writing up 27 ways dogs are cuter than cats find an alternate?

I talk often of a mythical school board reporter in Iowa who’s about to lose her job, and take with her all the institutional knowledge of how that school system runs. Can she find a way to keep doing stories that parents in her community desperately need?  If I have my way, she will. She’s start a paid newsletter, or get a few sponsors for a blog, or she’ll do a podcast, or she’ll learn to syndicate, as the folks at Credit.com have taught me. Whatever it is, I really, really want her to try. I don’t want her voice silenced.

So, how can you help?  I’m here tonight to ask your patience when you get a phone call or email from a journalist working with an outfit you’ve never heard of.  Better yet, maybe throw us a bone or two.  A scoop that might make the back page of the Washington Post might make an independent journalist’s entire career.  And yes, that’s a hint.

I know you have the same mission I do, to give voice to the voiceless.  Well, here’s a new chance to do that. I know many wounds the media has suffered are self-inflicted. But I promise you many individual journalists are worthy of your help. And they need it.  I accept this award on behalf of all my friends and colleagues who are struggling to make sure their voices don’t disappear during this turbulent time.

From my speech on Wednesday. That's Illinois Attorney General Lisa Madigan in the background. (Photo by Ed Mierswinski)

From my speech on Wednesday. That’s Illinois Attorney General Lisa Madigan in the background. Below, a short clip of Ed’s comments.(Photo by Ed Mierswinski)


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Click for my Brexit impact story at Grow

Click for my Brexit impact story at Grow

Today might be a good day to step away from the keyboard (after reading this story), go enjoy the sun, and not look at your portfolio.  Peeking again and again won’t do you a whole lot of good.

The Brexit “Leave” vote is a genuine surprise, and markets hate surprises.  But as we’ve seen during Friday’s down-but-not-catastrophic market activity, it might not be quite as big a surprise as you think. Clearly, some professional investors had priced in the Brexit Leave vote already.  And that’s important for you, non-professional investor. It’s too late to do whatever you might think to do in response to the result – say, sell stocks or buy gold.  That trade has already happened. The damage is done.  Your move is to just hold on to whatever plan you already had.

It feels like stocks are going to suffer a historic drop in value today. But remember, we can point to many down Dow days that had only-short term impact. Like Sept 29, 2008, when the Dow lost 778 points. Or Sept 17, 2001 – right after the 9-11 attacks — when the Dow lost 685 points.  In both cases, and on the dozens of days when the Dow has lost 400-500-600 points or more, the market has always recovered. Sometimes, within a week or two. So, don’t overreact.  (Here’s a great chart of the Dow’s 10 worst days, and what happened next.) In fact, if there’s something you’ve wanted to buy — a stock or mutual fund — today is probably a good day to buy it.

Soon, it might be a good time to buy British tea, too — if this big drop in the value of the British Pound holds, U.K. goods should become cheaper in the U.S., at least temporarily.  But don’t cheer too loudly about that.  It also means U.S. goods are about to become much more expensive across The Pond, a potential disaster for U.S. companies.

What other disasters might come from Brexit? Well, really, we don’t know..this move is unprecendented. My Scottish friends believe this almost certainly means Scotland will leave the U.K., as the Scottish want to stay with in the E.U.  And then there’s the strange case of Northern Ireland, which also voted to stay in the E.U.  Will the North start erecting more border controls with the Republic? Or will it find a way to join the Republic?  The Brexit dominoes could fall for a long time. And that’s why markets are so spooked.

I have a lot more to say about the potential Brexit impact over at Grow.  Have a read. While you are there, go ahead and check your portfolio if you must. But really, after that, go to the beach and let the dust settle.

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bryant art

Quantrey Bryant wasn’t a suspected terrorist, but he was a convicted felon, and felons aren’t supposed to be able to buy guns.  But from an Alabama jail cell, using smuggled cell phones, stolen credit card data, online websites, and straw buyers, Bryant was able to set up a guns-for-money crime ring, federal authorities say.  He ultimately used crude forms of identity theft to evade background checks and buy dozens of guns with other people’s money, including several AR-15s — the assault rifle in several mass shootings recently.

Bryant’s case highlights a problem with America’s gun purchase process that’s far more fundamental than the background check loopholes now being debated in Congress.

At a time when Little League volunteers are forced to submit fingerprints and online banking customers must answer arcane questions should they forget their passwords, there is essentially no modern identify verification conducted as part of a gun transaction. The simplest forms of identity theft can foil the process nearly 100 percent of the time.

In other words, it’s easier to lie and get a gun than lie and get a credit card in America. 

No one trying to reform America’s process for selling guns should proceed without learning the lessons offered by Bryant’s story: The fact that a felon plotting from jail could buy guns online with stolen credit card information and hire a straw buyers to pick them up shows how porous the background check process really is.

In 2013, Bryant was nearing the end of five long years in an Alabama prison — he’d been convicted of two second-degree robberies in 2008 — but he had a plan to set himself up for freedom. He had a source inside high-end retailer Smith+Noble, and in August 2012, she started feeding him stolen credit and debit card data.  He’d managed to get cell phones into his cell – he was accused of having five of them back in 2010 – and began committing identity theft from there.  At first, he used the credit and debit card data to put money into other inmates’ accounts.  Then he set his sights on larger crimes. He directed co-conspirators to set up used car sales at a local auto auction house. When time came to pay for the cars, Bryant’s partners directed the seller to call Bryant, who “paid” for the cars over the phone using new credit cards he’d tricked banks into issuing.

On a Twitter account that appears to belong to Bryant, the identity thief seems to brag about his enterprise.  In May 2012, he Tweeted:

“Don’t judge me I ain’t on the streets and I’m still getting money.”

But as freedom crept closer, Bryant turned his attention to buying guns.

In February 2013, Bryant was transferred out of Alabama Department of Correction Facilities into the custody of Jefferson County Community Corrections.  He was allowed to complete the final month of his sentence at his mother’s home, while under supervision of a community corrections officer. He was formally released from custody on March 19. But his online gun-buying splurge had already begun.

On March 12, Bryant ordered three pistols from an online gun website (I have decided not to name).  The orders were placed in the name of Curtis Glen Robinson, who would later plead guilty to aiding Bryant.  Neither the indictment nor the plea agreement make clear how the transaction was funded, other than indicating that stolen credit/debit card information was used.

[Read more!]

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Nlich.org. Click for full graphic

Hourly wage required to afford a typical two-bedroom apartment in each state. Nlich.org-click for full graphic.

You probably won’t be surprised to hear that there isn’t a single state in the U.S. where a worker earning minimum wage can afford the rent for a two-bedroom apartment — or, for that matter, a one-bedroom apartment. You might be surprised to learn that there isn’t a state where renters earning average pay can afford a two-bedroom apartment, either.

(This story is part of my Restless Project: Why Americans Can’t Sleep at Night.)

The National Low Income Housing Coalition crunched the numbers recently and found that a toxic mix of stagnant wages and rising rents has made things really difficult on a wide swath of U.S. wage-earners. It calculated a “housing wage” by determining how much workers would have to earn hourly to afford a “fair market rent” apartment for 30% of their income. By that measure, the national housing wage is $20.30 for a two-bedroom unit and $16.35 for a one bedroom — both far above even recently increased minimum wages.

But in many parts of the country, the numbers are even bleaker. Near Washington, D.C., the two-bedroom rental wage is about $31 an hour. In New York, it’s $27. In Maryland, it’s $26. In fact, in six staes and D.C., the housing wage is north of $25 an hour, the report says.

(This story first appeared on Credit.com. Read it there.)

Another way of expressing the same problem: Using the national rates, a worker earning the federal minimum wage of $7.25 per hour would need to work 2.8 full time jobs, or approximately 112 hours per week, to afford a two-bedroom apartment. That renter would need to work 90 hours to afford a one-bedroom, according to the report.

“In only twelve counties and one metropolitan area is the prevailing minimum wage sufficient to afford a modest one-bedroom apartment,” the report says. Those regions are all in West Virginia and Washington state.

Meanwhile, the average hourly wage of renters in the U.S. is $15.42, which is $4.88 less than the two-bedroom housing wage.

“In no state is the mean renter wage sufficient to afford a two-bedroom apartment at the fair market rate,” the report points out.

Here’s one example of the troubling numbers at work:

In Washington state, fair market rent on a two-bedroom apartment is $1,203. That means a worker needs annual earnings of about $48,000 to afford that unit, or $23.13 per hour. Based on the state minimum wage, a worker would need 2.4 jobs full-time jobs to afford that. The real average renter wage in Washington is just $16.69, meaning a worker with an average-pay job needs 1.4 jobs to afford a two-bedroom place. In King and Snohomish counties, the region’s most expensive areas, the housing wage is much higher: $29.29.

Part of the problem is skyrocketing rents due to high demand and low supply. Vacancy rates are at their lowest levels since 1985, and rents have risen at an annual rate of 3.5%, the fastest pace in three decades, according to the housing group.

Another part of the problem I’ve written about before: Builders are less interested in constructing medium-prices housing at the moment for numerous economic reasons, preferring mostly high-end construction. This impacts availability of starter homes and rental units.

The National Low Income Housing Coalition says it is using a trust fund to help communities build and rehabilitate affordable rental homes.

“It is also critical to preserve and improve the nation’s public housing stock, expand the number of housing vouchers, and increase funding for other programs providing affordable housing to truly end this crisis,” the report says.

What is the housing wage for your state? You can find out on the map on this page. Remember that your earnings are only one of many things that determine your ability to find housing. Your potential landlord will probably look at a version of your credit report as part of your rental application, and badcredit rating or a history of payment problems could make it harder to find a place to live. A pasteviction could be really problematic, as well, though it may not be a deal breaker.

It’s a good idea to review your credit before looking for housing, so you can check it for errors as well as be upfront about anything a landlord may find during a credit review. To keep track of where you stand, you can get a free credit report summary, updated monthly, on Credit.com.

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Katie Ray-Jones is CEO of the National Domestic Violence Hotline.

Katie Ray-Jones is CEO of the National Domestic Violence Hotline.

In the days when there were newspapers, every cub reporter’s first job was to go to the local police station and mine stacks of police reports looking for good stories.  In my first job, as is common, a desk sergeant sat with me once a week and sifted reports for me.  He handed me the “interesting” reports that might lead to stories; the dull and routine went back into his desk drawer.

Week after week, he handed me DUI after DUI.  The “dull” pile?  I can still hear his voice in my head.

“Domestic.  Domestic…..another domestic.”  And into the drawer.

In the peaceful little suburb I covered, a majority of police reports were domestic violence reports that landed in the sergeant’s desk drawer.  I eventually got up the courage to ask about them, and I was told it wasn’t fair to embarrass families involved.  A fight with the police chief ensued, but that’s not the story I’m writing today.

On days like today, I can’t help but wonder if Omar Mateen’s name was hidden in a drawer like that.

When news broke that Orlando monster Omar Mateen had an ex-wife who says she was abused, Katie Ray-Jones wasn’t surprised.  More often than not, mass murders are preceded by domestic violence, she says.

“Those of us working in domestic violence have recognized this link for some time,” said Ray-Jones, ‎CEO of the National Domestic Violence Hotline.  “We are seeing a strong correlation between domestic violence and mass murder, and we have the data to support that.”

A website that tracks gun violence published a study recently of the 133 mass shootings in America between January 2009 and July 2015.  Its conclusions were stark:

“There was a noteworthy connection between mass shooting incidents and domestic or family violence. In at least 76 of the cases (57%), the shooter killed a current or former spouse or intimate partner or other family member, and in at least 21 incidents the shooter had a prior domestic violence charge,” it said.

In other words, mass shooters commonly attack intimate partners, but even when they don’t, the shooter often has a domestic violence background. It should seem obvious that a person capable of harming someone they supposedly love is capable of far greater destruction.

“Often they are not labeled domestic violence in the headline. But people who work in this space are not surprised when there is a history,” Ray-Jones said.

We don’t know if Mateen’s ex-wife called police on her husband after he allegedly abused her — probably not, give reasons we’ll discuss.  Plenty of facts remain unclear. But regardless of how this story turns, we do know there’s a clear link between family abuse and mass murder. We just haven’t been listening carefully enough. And as we all scramble to do something — anything — to stop the next Omar Mateen — one critical step is to listen better to abuse victims. Because odds are high the next mass shooter is sitting in a police department desk drawer right now.

It might seem natural to wonder why Mateen’s ex-wife didn’t ring a louder alarm bell, and Ray-Jones said she used to ask those kinds of questions when she started working in domestic violence.  But not any longer. Victims are scared for their lives, for good reason.

“Clearly this is a man capable of tremendously heinous acts. Women know their partner the best. When he says, ‘If you call police, I’ll kill you’ you have to believe he’s capable of that,” she said.

But fear of the violence spouse is only part of the story. Many victims who call her hotline say calling the police would do more harm than good.

“We recently surveyed survivors’ experience with law enforcement, and a lot of women say they did not have a favorable experience when they did call police. Sometimes, no one is arrested.  Or police say, ‘Just go cool off for a few hours… Even female officers often don’t respond well sometimes,” she said.

We also live in a time of decreased trust in law enforcement, Ray-Jones said.

In a survey of hotline callers, 80 percent of those who had called police previously said they were “somewhat or extremely” afraid to call them in the future.  And 1 in 3 said they felt “less safe” after calling police.

But even when police handle the calls well, there are other frustrations. District attorneys prosecute violence as misdemeanors; victims recant testimony, often out of fear.

When we mishandle domestic violence cases, we miss a very important opportunity to stop a future, heinous crime. Very few domestic abusers turn into mass murderers. But it’s also true that men who beat their wives rarely do it just once.  Instead, the level of violence often increases.

“When I worked at the local level supervising a team of 15 people who responded to 911 calls …so many times staff on this team would come back and talk about a different victim, but the same perpetrator, someone we’ve encountered before,” she said. “He leaves and finds someone else to control. We know that it’s rare that someone who is an abusing person does it once.”

Guns also play a big role in domestic violence cases.  The hotline surveyed 5,000 victims and found that 10 percent of time, a firearm had been discharged as part of the abuse.  In other cases, guns are used for psychological abuse, such as “the husband cleaning the gun while staring at the wife,” Ray-Jones said.

“We are finding that there is not enough protection for women in violent relationships where firearms are a part of the relationship,” she said.

It’s too early to draw specific conclusions from Mateen’s case, but that shouldn’t stop anyone from focusing on the connection between domestic violence and mass murder.

It’s hard to imagine the Orlando tragedy feeling any worse, but the idea that an obvious warning sign might have been missed adds to the torture for victims’ families, and it should fuel our resolve to not let it happen again. Ray-Jones is advocating for more funding to train law enforcement so they can better handle domestic violence cases and support victims.

The rest of us? We should all learn to listen better.   And to open a few more desk drawers.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list or click on an advertisement.



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Levittown, on New York’s Long Island, new starter homes were plentiful in the late 40s and 50s. Click to visit the Instant House blog, a tribute to manufactured homes.

Levittown, on New York’s Long Island, new starter homes were plentiful in the late 40s and 50s. Click to visit the Instant House blog, a tribute to manufactured homes.

Young would-be home buyers are still sitting on the sidelines of America’s housing market, with first-time homebuyers representing a decades-low share. Student loans, high prices and low credit scores have all been blamed for this, but Bank of America recently proposed a different explanation.

Perhaps they’re just being patient.

Young adults don’t want starter homes, the bank said when explaining the results of a recent survey; they want to wait until they can buy their dream home and perhaps the home they’ll grow old in.

This story first appeared on Credit.com. Read it there.

“Seventy-five percent of first-time buyers would prefer to bypass the starter home and purchase a place that will meet their future needs, even if that means waiting to save more,” the bank says. “Thirty-five percent want to retire there.”

When asked why they haven’t bought a home, 56% told researchers, “I don’t think I can afford a home or the type of home I’d want.”

California loan agent and housing expert Logan Mohtashami said he’s seen evidence of this in his own sales. Younger folks are looking for larger homes, he said, specifically “more three-bedroom detached homes. That means no condos for them.”

But while patience is a virtue, so is facing reality. There’s a chicken-and-egg problem with claiming that would-be buyers are simply waiting and saving: There are very few starter homes for them to buy. Would these young people feel differently if they actually had options?

To understand the question, let’s back up a bit and get into the numbers.

The housing market is hot — home price listings are up 9% nationally from one year ago, according to Realtor.com. But the market is still broken. Only 30% of homes are being sold to first-time buyers, when the historic rate is 40%, according to the National Association of Realtors (NAR). The absence of (mostly) young first-time buyers creates problems all the way up the housing market food chain, making life difficult for families looking to sell and trade up while turning millennials into a generation of apartment dwellers.

Or perhaps it’s not really a problem. It’s possible some homeownership attitudes are changing, and trading up is becoming a thing of the past. Older generations were very comfortable buying smaller homes and moving as their families grew. Today’s buyers are used to much larger homes — the average home built in 2016 is 2,500 square feet, compared to 1,500 square feet in the 1970s, Mohtashami said.

Meanwhile, long-term trends suggest that Americans — both first-time buyers and trade-up buyers — are staying in their homes longer. A study by the National Association of Home Builders shows families moved after 11 years in 1987, on average, but stayed 16 years in 2011. The research is skewed by the housing recession, but the long-term trend is still for buyers to stay in their homes longer.

Maybe we should call millennials the “one and done” crowd.

But back to the chicken-and-egg problem. First-time home buyers have an average student loan debt of $25,000, according to NAR, which puts a serious damper on home-buying dreams. NAR thinks that debt delays saving for a down payment by an average of three years.

But debt is only one of the obstacles young people face.

“There are several reasons why there should be more first–time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college-educated and the fact that renting is becoming more unaffordable in many areas,” said Lawrence Yun, NAR chief economist at NAR. “Unfortunately, there are just as many high hurdles slowing first-time buyers down. Increasing rents and home prices are impeding their ability to save for a down payment, there’s scarce inventory for new and existing homes in their price range, and it’s still too difficult for some to get a mortgage.”

Where Are All the Starter Homes?

The disappearing starter home is one element of the equation that some have overlooked, but it’s critical. Five minutes on any realty website can offer a tough dose of reality to anyone dreaming of buying a first home.

Sales of $200,000-and-under homes dropped the past two years, according to RealtyTrac. And many of the existing cheaper homes — often made available through foreclosure during the recession — have been snapped up by investors and turned into single-family rental units. A report last year from Harvard’s Joint Center for Housing Studies found that the recession added 3.2 million more single-family home rental units, “unprecedented” growth in this part of the market.

Then there’s the new construction problem. Builders just aren’t building $200,000 homes right now for a simple reason: Larger homes mean larger profit margins. BuilderOnline.com did a great job of breaking down the math in a story last year:

Making a $200,000 home work as a home builder is junior high–level arithmetic. Solving for profit — say, 20% — land and building direct costs cannot exceed $160,000. Problem is, a 20% margin on a sub-$200,000 house has become frighteningly elusive in the past decade.

The lowest build cost is around a $50 a foot,” says David Goldberg, a home building and building products manufacturers analyst for UBS, New York. “If you do a 2,000-square-foot house, which is what you’d have to do to compete with existing stock, that leaves you with $100,000 of sticks-and-bricks cost. The maximum cost on the land would be $60,000.”

So back to the original proposition: Are young people staying in apartments or living with their parents because they are patient or because they are hopeless? The answer, no doubt, lies somewhere in the middle. But when young people say they are simply waiting until they can afford the home they want, you have to wonder if they are being patient or simply sparing themselves the heartache of shopping for a unicorn.

If you’re in the market to buy a home, it’s a good idea to check your credit before you apply, since a good credit score will help you qualify for better terms and rates. You can see where you currently stand by viewing two of your credit scores, updated each month, for free on Credit.com.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list, or click on an advertisement, or just share the story.





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OhioAuditor.Gov

OhioAuditor.Gov

How bad has the ransomware problem become?  The state auditor of Ohio held a press conference yesterday because local government agencies keep falling for ransomware attacks. And a firm that tracks domain activity found a 3,500% increase in ransomware-related domain name registrations in the past quarter.  Hacker love to cut and paste, so imitation is the surest sign that something is working.

Recall the high-profile, alarming ransomware attacks earlier this year on hospitals.  These “your money or your data” crimes can do a lot of damage quickly, and confused organizations brought to their knees by missing mission-critical data often pay up.  Of course, smaller organization with less IT resources are at greater risk.

Here’s what’s going on in Ohio.  Auditor of State Dave Yost issued a warning on Thrusday to treasurers, fiscal officers and others responsible for spending public money that cybercrimes targeting government are “on the rise.” And he offered these examples.

  • An investigation continues in an eastern Ohio county after the county’s court data was attacked by ransomware on May 31. A virus had encrypted the court’s data and hackers demanded $2,500 for the key to unlock the information. Because a recent copy of the data wasn’t available, the county agreed to pay the $2,500. (Note: Because the transaction is ongoing, we are not identifying the county.)
  • A similar ransomware attempt was made April 5 in Vernon Township (Clinton County). That cyberattack did not result in the payment of any ransom because the township’s data was backed up.
  • In Peru Township (Morrow County), the township fiscal officer’s computer began screeching on March 9 before a notice appeared on the screen advising that a solution was available by calling an 800 number. The township paid $200 to stop the attack.

In separate, non-ransomware incidents,  an employee at Big Walnut Local School District in Delaware County was tricked into issuing a check for $38,520 to a hacker. The money was recovered before it was lost. The Madison County Agricultural Society wasn’t as lucky; it was scammed out of $60,491 through someone posing as the IRS, collecting back taxes.

“We’ve all seen and heard about the criminals who try to steal our personal funds. These scammers would like nothing more than to get their sticky fingers on our tax dollars, too,” Yost said. “We need to be vigilant because they are becoming increasingly sophisticated in how they attempt to steal money through the internet.”

Yost is right.  Network security firm Infoblox reported last week that hackers were falling over each other to set up websites related to ransomware scams.  The firm tracks domain registrations as a way of monitoring the Internet for threats, and it says it found a 35-fold increase in newly observed ransomware domains from the fourth quarter of 2015.

“There is an old adage that success begets success, and it seems to apply to malware as in any other corner of life.
In the first quarter of 2016, there were numerous stories in the news about successful ransomware attacks on both
companies and consumers,” the firm said.  “We believe the larger cybercriminal community has taken notice.”

According to the FBI, ransomware victims reported costs of $209 million in the first quarter, compared to $24 million for all of 2015.

“Unless and until companies figure out how to guard against ransomware – and certainly not reward the attack – we expect it to continue its successful run,” Infoblox said.

Yost said all the crimes began with some variation of phishing, and urged all government employees to be on alert.

“The internet is the tool of choice for criminals, and we need to make it as difficult as possible for thieves to access community treasure chests,” Yost said.

The best way to do that, as Vernon Township showed above, is to keep good backups.

If you’ve read this far, perhaps you’d like to support what I do. That’s easy. Sign up for my free email list or click on an advertisement.



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