The housing starts in May dropped to their lowest level since 1991 in a sign of continued weakness in the housing sector according to the U.S. Department of Commerce. The May figure was down 32 percent from the same month a year ago and slightly lower than expected by economists.  In the West, which includes California, starts were down by 10 percent.

The growing inventory of foreclosures, higher mortgage rates, tighter qualification criteria and continued declines in home values are behind declining builder confidence, which fell to a record low in May, according to a survey by the National Association of Home Builders and Wells Fargo.

In California 20,000 homeowners lost their homes in May and 72,000 mortgages were at some stage in the foreclosure process.  That means one of every 183 California households was affected in May, putting California right behind Nevada, with one out of every 118 households affected.

Many community banks gave up mass-market products like credit cards and mortgages in recent years in favor of the high fees they earned making loans to residential developers and home builders.  As new home developments sat empty in the wake of the sub-prime mortgage crisis and both land values and home prices plummeted, community banks were left holding a portfolio of loans worth dimes on the dollar.  Regulators are acting to require that banks write down the value of troubled loans and generate more capital to cover the write-offs.  These losses are increasingly apparent in regulatory filings and shareholder earnings reports.

The Federal Deposit Insurance Corporation (FDIC) offers some suggestions:

1.     Try to save more and spend less.  First, if you don’t already have a monthly budget, consider preparing one to get a better handle on your income and expenses for necessities, such as housing, utilities, food and transportation.  You can also decide what is appropriate for non-essential expenses, such as entertainment, eating out and the latest electronics.

2.     Keep banks costs down.  With planning, you can sidestep some of the more costly fees and penalties. Examples:

·        With credit cards, try to pay the card balance in full each month to avoid interest charges. If you can’t pay in full every month, send in as much as possible to keep interest costs to a minimum.  In addition, pay your credit card bill on time.  One reason is to avoid late fees.  Another is that late payments can damage your credit record.  If repeated, they could even trigger rate increases on your credit cards and loans.

·        With your checking account, avoid fees for insufficient funds and bounced checks.  Record every deposit and withdrawal in your checkbook – especially your debit card purchases and ATM withdrawals.  Your bank may offer various “overdraft protection” services for your checking account, but be aware that these come with their own costs. 

·        At the ATM, limit or avoid “surcharges: (access fees) by using your own bank’s machines or those owned by institutions that don’t charge fees to non-customers.  If you definitely need cash when you are out of town or otherwise not near an ATM owned by your bank, consider getting cash back when you use a debit card to make a purchase at a supermarket or another merchant.

·        Do not be afraid to ask for a break.  Bounce a check or send in a late payment for the first time ever?  Think the fees for your mortgage application are a bit steep?  Depending on the circumstances, your bank might be willing to reduce or waive a fee or penalty, especially if you have been a good customer and do not have a history as a “repeat offender.”

For most people, a computer is the central tool at work.  Optimizing the energy settings for computers and other devices can be more than a modest energy saver.  Set computers to energy-saving settings and make sure to shut them down when you leave for the day (“standby” settings will continue to draw power even when not in use).  By plugging hardware into a power strip with an on/off switch (or a smart power strip), the whole desktop setup can be turned off at once (make sure to power down inkjet printers before killing the power – they need to seal their cartridges).  Printers, scanners, and other peripherals that are only used occasionally can be unplugged until they are needed.  And of course, turn off lights in spaces that are unoccupied.