Financial thoughts

St. Louis should expect little improvement in the local job market or housing prices this year, according to a dismal new forecast from economists at PNC Bank.

Some excerpts:

St. Louis has not been able to accelerate its economic growth beyond stall speed thus far since the end of the recession. Employment growth is barely positive, and the market area’s labor force is declining in the absence of new job opportunities. What had appeared to be another manufacturing-centric turnaround story alongside so many other Midwest regional economies in early 2011 has sputtered entering 2012. The labor force has either been flat or seen outright declines in three of the past five quarters, indicating that would-be workers are falling out of the labor force count for lack of significant job opportunities. St. Louis looks set for sub par job creation through the next several quarters. Price declines (for homes) show little sign of bottoming out in the very near term, leading to expectations that even minimal price growth will be delayed until 2013. With employment gains temporarily stalled, housing demand will offer little price support in the coming year. St. Louis has traditionally posted a median household income level slightly greater than the Midwest and U.S. averages. This standing is under threat over the next few years, however, as the market area struggles to steady its labor market, and therefore its earnings potential.

The report expands on remarks made by an economist for the large Pittsburgh bank on a visit to St. Louis last week.

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One of the last vestiges of hope for Jamestown Mall has been its JCPenney outlet store.

While other retailers have deserted the mall in droves, the 124,000 square-foot anchor store’s presence – and success — has been something that the mall’s proponents have hung onto as proof of the area’s potential. (A Macy’s is also still open at the mall.)

In January of last year, J.C. Penney Co. announced it was exiting the outlet business. At the time, it sounded like a possible death knell for Jamestown Mall.

“For ten months we were in limbo,” said Steven Bingham, the outlet store’s manager.

But then SB Capital Group came to the rescue, buying most of those outlet stores in October and converting them to a new name: JC’s Five Star Outlet. Glen Gammons, who ran J.C. Penney’s outlet division for years, came on board to run the rebranded chain under the new owner.

In a recent phone interview, Gammons said the company’s plan for the Jamestown Mall store is the following: to keep it open. J.C. Penney still owns the building, he noted.

And what’s more, he said, the store is still profitable. In fact, its sales performance put it within the middle tier among the other 14 stores in the chain, he said.

Gammons thinks the mall could see better days down the road. The city needs to team up with a developer to bring in a retailer such as a Sam’s Club or Burlington Coat Factory to the site, he said.

“There’s potential for the mall to be revived,” he said. “I’m not naïve that there are challenges. … But it’s a good piece of real estate.”

In the meantime, the outlet store is in the midst of a 21-month transition to separate the systems and name between JCPenney and JC’s Five Star Outlet.

The slow changeover has led to some confusion. The sign outside the store still says “JCPenney outlet store.” So does the store’s glossy advertisements. The store no longer accepts JCPenney gift cards, but you can use that retailer’s credit card in the outlet.

While a lot of the systems behind the scenes are in flux, what hasn’t changed as much is what customers see on the sales floor. The store still gets about 20 to 25 percent of its merchandise from overstock and end-of-season inventory from J quick payday loan.C. Penney – the same level as before, Gammons said. But he said the chain is also expanding its other vendors to bring in different products into the store.

Not surprisingly, many customers haven’t realized the store has changed names. At the same, the store is also facing the opposite problem.

“A lot of our customers think we are closed,” Bingham said, referring to the previous publicity about J.C. Penney exiting its outlet stores.

So the store has seen a dip in traffic, he said. But it’s gradually building back up as word spreads that it’s still open.

Another thing the store has going for it is a loyal following. Some customers have been shopping at the outlet since it first opened in East Alton in 1980. It moved a couple times before ending up at Jamestown Mall in 1999.

“We are definitely a destination,” Bingham said. “We have some customers who are here everyday, scoping out the new merchandise.”

KELLWOOD

Kellwood Co.’s newly-minted chief executive didn’t get too settled in during her pit stop to the apparel company’s Town and Country headquarters. Jill Granoff popped into the local office earlier this week in between visits to the company’s New York and California offices.

A Connecticut resident, she will be working out of the company’s New York office.

It makes sense in some ways since New York is the center of the fashion world. But it also makes you wonder a bit about the future of the local headquarters where about 150 people work.

Her predecessor, Michael Kramer, once told me that he would keep the headquarters in this region as long as he was in charge. Then he took a job as chief operating officer for J.C. Penney.

However, Erin Haggerty, a company spokeswoman, noted in an email that the previous CEO before Kramer lived in New York.

“So it’s not uncommon for Kellwood to base its CEO there,” she wrote.

Still, I asked if there were any plans to move the company headquarters. Haggerty said there wasn’t — at least not “at this time.”

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The founder of BATS Global Markets says the U.S. exchange that withdrew its public offering on Friday after an embarrassing computer glitch should pursue a “credible” IPO plan in the second quarter.

Dave Cummings, who founded the BATS exchange and was its CEO till 2007, said in an email sent Sunday to people in the industry that it was a “freak one-time event,” because the computer program needed for an IPO was new. He said such bugs can easily be fixed, but recommended that all bonus plans at BATS should be suspended since “mistakes cost money.”

A BATS’ spokesman said Cummings’ opinions are his own and the company has “absolutely no comment” on the email.

Cummings sits on the board of BATS and is the owner of electronic trading firm Tradebot Systems and technology investment firm Tradebot Ventures. He also owns a stake in BATS.

On Thursday BATS’ initial public offering of its own stock priced at $16, the low end of what the company had originally predicted.

Shortly after starting to trade on Friday, the share price plunged to just pennies because of technical issues, according to the exchange. Trading in the stock was halted cash till payday. By late afternoon, BATS withdrew its public offering and said it had no plans to refile its IPO. All trades made were to be canceled.

The botched IPO was a blow not only to the exchange, but to its own plans for the IPO business. In February, BATS offered free listings to companies with shares that traded a certain amount each day, hoping to draw IPOs away from Nasdaq and the NYSE.

BATS, whose motto is “Making Markets Better,” strove to define itself as a tech-savvy exchange and said companies would benefit from its “world-class customer support and technology.”

Cummings said in his email that the software bug that led to the glitch would likely take less than a week to fix. He said that the company now needed a plan to move forward.

“BATS management should develop a plan to go public in the second quarter, if possible,” said Cummings. “This might seem tough, but I believe it is the only way to move past the issue.”

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U.S. stocks bounced back Wednesday, a day after the biggest one-day sell-off of 2012, as investors were heartened by the latest economic reports.

A labor market report signaling that private sector hiring is picking up steam helped bolster sentiment.

Gas prices also declined for the second day in a row, after a long streak of continuing increases. The pullback is helping to ease some concerns over what higher gas prices could mean for the American consumer.

The Dow Jones industrial average () added 80 points, or 0.7%. The S&P 500 () jumped 8 points, or 0.7%. The Nasdaq () jumped 26 points, or 0.8%, signaling a rebound from U.S. markets’ worst day of the year.

Still, the gains were modest as investors are largely waiting to see what the deal between Greece and its private-sector bondholders will look like. Greece and its private bondholders must officially agree to a crucial restructuring of the nation’s debt this week, in order for Greece to avoid defaulting on its debt.

"If something goes wrong with Greece’s deal, I can say with total certainty that the market will react negatively," said Dan Greenhaus, chief global strategist at BTIG. "Today investors are saying what’s the harm in waiting a day to see what’s going to happen."

Meanwhile, investors are also waiting for Friday’s release of the February jobs report to get a more detailed reading on the health of the U.S. economy.

Apple iPad event: Live blog

Separately, Apple unveiled details of the third version of its iPad at a presentation in San Francisco. Shares of Apple (, Fortune 500) are up 47% over the past year.

Stocks fell Tuesday as markets were under pressure from weak economic data out of Europe, and rising yields on euro-area government bonds — all three indexes suffered their worst day in 2012.

Economy: Hiring in the private sector picked up in February, according to a report released Wednesday by payroll processor ADP. The private sector added 216,000 jobs in the month, which was roughly in line with forecasts.

A report on consumer credit for January was released. It show that credit grew by $17.8 billion for the month, beating expectations of a $12 billion increase.

Commodities: Oil for April delivery added $1.46 to $106.16 a barrel.

Gas prices: If you can’t beat ‘em, join ‘em

Gas prices declined for the second day in a row, falling three-tenths of a cent to $3.76 a gallon, according to motorist group AAA. Gas prices are up 14.7% so far in 2012.

Gold futures for April delivery rose $14.00 to $1,686.10 an ounce.

The dollar was little changed against the euro and Japanese yen, but rose slightly versus the British pound.

Companies: Shares of online radio service Pandora () slumped more than 20%, after the company narrowly missed analyst expectations on quarterly earnings and revenue.

Netflix () shares dropped in late afternoon, after an earlier run up on reports that CEO Reed Hastings is seeking a partnership with a cable company, and has held meetings with several providers in recent days.

Sears CEO: Faring better than Sears

Children’s Place Retail Stores () shares dropped, after the company reported a miss on quarterly revenue. The company attributed the results to warmer-than-expected weather that forced sharp markdowns on winter apparel.

Bonds: The price on the benchmark 10-year U.S. Treasury slipped, pushing the yield up to 1.97% from 1.94% late Tuesday.

World markets: European stocks closed higher. Britain’s FTSE 100 () ticked up 0.6%, the DAX () in Germany added 0.7% and France’s CAC 40 () rose 0.6%.

Asian markets ended lower. The Shanghai Composite () dropped 0.7%, while the Hang Seng () in Hong Kong slipped 0.9% and Japan’s Nikkei () was off 0.7%. 

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Fewer Americans applied for unemployment benefits last week, indicating the U.S. labor market continues to gradually improve.

Jobless claims dropped by 12,000 to a seasonally adjusted 367,000 in the week ended Jan. 28, the Labor Department said Thursday. That’s near a four-year low.

Economists surveyed by MarketWatch had estimated claims would drop to 370,000. Claims from two weeks ago were revised up by 2,000 to 379,000.

The four-week average of claims fell by a smaller 2,000, to 375,750. The monthly average smooths out seasonal quirks and provides a more accurate assessment of labor market trends, economists say.

The monthly average has shown little change in the past six weeks, but it also remains near a four-year low and stands at a level that usually suggests a healing labor market. Since claims reflect how many people lose their jobs, the recent decline likely indicates a slowdown in layoffs.

“The decline in the claims numbers does point to an improving labor market that will ultimately show up in more jobs,” said Joel Naroff of Naroff Economic Advisors.

Even if most companies aren’t laying off workers, however, that doesn’t mean they are eager to boost payrolls. The current pace of job creation — about 150,000 jobs a month — is far too slow to put millions of unemployed Americans back to work free credit score.

The past week’s claims data are likely to draw more than the usual scrutiny, coming on the eve of U.S. data on nonfarm payrolls and joblessness for January. The economy likely added 125,000 jobs in January and the unemployment rate probably stayed even with December’s 8.5 percent, according to a MarketWatch survey.

Economists say the U.S. would have to add about 250,000 jobs a month for several years to bring unemployment back under 6 percent. The jobless rate ranged between 3.8 percent and 6.2 percent in the seven years before the 2007-2009 recession.

Most economists expect the level of jobless claims to settle in the 375,000 range in the next several months.

Also Thursday, the Labor Department said continuing claims decreased by 130,000 to a seasonally adjusted 3.44 million in the week ended Jan. 21. Continuing claims are reported with a one-week lag.

About 7.67 million people received some kind of state or federal benefit in the week ended Jan. 14, virtually unchanged from the prior week.

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The last big name from the old days at Anheuser-Busch is leaving Pestalozzi Street.

Dave Peacock, who went from August Busch IV’s right-hand man to Carlos Brito’s U.S. point man, resigned from Anheuser-Busch InBev Monday, a move some see as one of the final steps of the brewery’s transition to new ownership.

The 43-year-old – a second-generation A-B employee who met his wife on his first day of work there – says the parting was his idea, and amicable. He’ll remain an adviser to the company, but he wants to do something else while he’s still young enough to do so.

“I’ve been really blessed,” Peacock said. “When you grow up in St. Louis and your dad works for the brewery, you never even dream you’re going to have a shot at the job I had. But it’s time to try something different.”

In leaving, according to regulatory filings, Peacock appears to be walking away from stock options that would today be worth roughly $28 million. The arrangement required that he stay five years after the merger and that the company meet financial targets. It was unclear Monday if he received other compensation upon resigning.

Peacock’s departure comes three years into a transition that has seen many of the brewer’s top local executives leave, and as A-B InBev searches for ways to grow its iconic Budweiser and Bud Light brands despite a tough economy for big beer. The well-liked Peacock – whose title was president of Anheuser-Busch - was in charge of U.S. operations for A-B InBev. He played a key role in helping the Belgian-Brazilian conglomerate absorb its big acquisition, said Tom Pirko, managing director of Bevmark, a food industry consulting firm.

Now, with the takeover fading in the rearview mirror, the challenges are different.

“They’re in to Phase Two now,” Pirko said. “Phase Two is an ability to stabilize and grow the business. That requires new thinking, new blood. The company’s got to deliver in a way that it hasn’t been delivering in the last few years.”

That job will fall to Luiz Edmond, a Brazilian who has been been A-B InBev’s North America zone president, and Peacock’s boss, since the takeover. He’s been based in St. Louis and will remain here, and add Peacock’s U.S. duties to his portfolio.

“Dave has been a great colleague, embracing and leading many changes that we agreed would be difficult, but that would ultimately benefit the U.S. business in the long term,” Edmond said in an e-mail to employees Monday. “He has helped Brito, me and the global and zone management teams in transitioning the company in many ways over the last three years.”

Peacock had worked at Anheuser-Busch since 1992 and rose through the ranks to become its vice president of marketing and a close confidant of August Busch IV. He bled Budweiser, colleagues said, and was widely seen as a rising star in the industry.

Peacock played a crucial role in the days after Anheuser-Busch agreed to InBev’s terms in July 2008. He joined Busch – and did most of the St. Louis brewery’s talking – on a Monday morning conference call with Brito announcing the deal. The next day, according to Dethroning the King, a book by writer Julie McIntosh that chronicles the takeover, it was Peacock who gave Brito a ride to the brewery for his first visit as the new boss.

Peacock’s efforts were noticed, and he was alone among top A-B executives in having a major role at the new company. For the last three years, he helped to manage cuts, smooth relations with employees and distributors, and served as A-B InBev’s face in the U.S., including St. Louis.

But some industry-watchers suspect Peacock had had his fill. The business keeps getting tougher for big brewers, said Harry Schumacher, publisher of trade publication Beer Business Daily. Craft beers and spirits are eating market share, and more fights likely loom with distributors.

“They’re really getting sandwiched from both sides, and they’re going to need some changes,” Schumacher said. “I don’t think Dave wanted to go down that road and be the bad cop.”

In an interview Monday, Peacock said he’d been mulling the move for about a year, and that he’s leaving Anheuser-Busch in good hands, both with Brito and Edmond and with a core of U.S.-based executives who worked under him. He’s not sure what he plans to do next, but said he thinks he’ll stay in St. Louis, where his family lives and his children are in school.

And as for leaving behind those stock options – which were likely to start paying out in less than two years – he said it’s not really about the money.

“I didn’t really mind leaving that money on the table,” Peacock said. “It was just the right time for me.”

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Don Buckley lost his job driving a Chicago Transit Authority bus almost two years ago and has been looking for work ever since, even as other municipal bus drivers around the country are being laid off.

At 34, Buckley, his two daughters and his fiancée have moved into the basement of his mother’s house same day payday loans. He has had to delay his marriage, and his entire savings, $27,000, is gone.

“I was the kind of person who put away for a rainy day,” he said recently. “It’s flooding now.”

Buckley is one of tens of thousands of once solidly middle-class African-American government workers

Fresh clashes between security forces and Egyptian protesters demanding the military step down broke out Saturday in front of the Cabinet building, leaving one man dead, as violence threatened to overshadow next week’s parliamentary elections.

Meanwhile, Field Marshal Hussein Tantawi, the head of the ruling military council that took power after Hosni Mubarak was ousted in February, met separately with opposition leader and Nobel Peace laureate Mohamed ElBaradei and presidential hopeful Amr Moussa, who was the former head of the Arab League. Egyptian state TV reported the meetings but gave no details.

The new prime minister, whose appointment by the military on Friday touched off a wave of anger among protesters accusing the army of trying to perpetuate the old regime, also held a series of meetings trying to sway youth groups to his side.

State TV said Prime Minister Kamal el-Ganzouri, who is unpopular in part because he served under Mubarak, offered Cabinet positions and is pondering the formation of an advisory council to be composed of leading democracy advocates and presidential hopefuls.

The suggestion however failed to disperse the protesters, with nearly 10,000 packing into Cairo’s central Tahrir Square as organizers called for another mass rally on Sunday.

Twenty-four protest groups, including two political parties, have announced they are creating their own “national salvation” government to be headed by ElBaradei with deputies from across the political spectrum to which they demanded the military hand over power.

ElBaradei said in a statement that he would be willing to form a such a government to manage the country’s transition, and that if he were officially asked to put a government together, he would give up the idea of running for president in order to focus on the current phase of transition.

Outside the Cabinet building, hundreds of protesters set up camp, spending the night in blankets and tents to prevent the 78-year-old el-Ganzouri from entering to take up his new post. Early Saturday, they clashed with security forces who allegedly tried to disperse them.

An Associated Press cameraman saw three police troop carriers and an armored vehicle firing tear gas as they were being chased from the site by rock-throwing protesters.

The man who was killed was run over by one of the vehicles, but there were conflicting accounts about the circumstances surrounding the death.

The Interior Ministry expressed regret for the death of the protester, identified as Ahmed Serour, and said it was an accident. Police didn’t intend to storm the sit-in but were merely heading to the Interior Ministry headquarters, located behind the Cabinet building, when they came under attack by angry protesters throwing firebombs, it said in a statement. The ministry claimed security forces were injured and the driver of one of the vehicles panicked and ran over the protester.

One of the demonstrators, Mohammed Zaghloul, 21, said he saw six security vehicles heading to their site.

“It became very tense, rock throwing started and the police cars were driving like crazy,” he said. “Police threw one tear gas canister and all of a sudden we saw our people carrying the body of a man who was bleeding really badly.”

Officials say more than 40 people have been killed across the country since Nov. 19, when the unrest began after a small sit-in by protesters injured during the 18-day uprising that ousted Mubarak was violently broken up by security forces. That sparked days of clashes, which ended with a truce on Thursday. It wasn’t clear whether the melee on Saturday was an isolated incident or part of fresh violence by security forces trying to clear the way for the new prime minister, and protesters frustrated by what they believe are the military’s efforts to perpetuate the old regime.

“El-Ganzouri was pulled out of his grave. He was a dead man,” said a 39-year-old employee Ahmad Anas as chants against the head of the military council filled the air outside the Cabinet building: “Tantawi and el-Ganzouri are choking me.” A banner hanging over the building gates read: “closed until execution of field marshal.”

El-Ganzouri served as prime minister under Mubarak between 1996 and 1999. His name has been associated with failed mega projects including Toshka, an ambitious and expensive scheme to divert Nile water at the southern tip of Egypt to create a second Nile Valley. The project has cost billions and barely gotten off the ground.

The military’s appointment of el-Ganzouri, along with its apology for the death of protesters and a series of partial concessions in the past two days suggest that the generals are struggling to overcome the most serious challenge to their nine-month rule, with fewer options now available to them.

Hala al-Kousy, a 37-year-protester, vowed that protesters will not leave the square until the Supreme Council of the Armed Forces, the formal name of the military’s ruling council, gives up power.

“They are willing to wait and so are we,” al-Kousy said.

Egypt’s first parliamentary elections since Mubarak was replaced by the military council are slated to begin Monday. The vote, which the generals say will be held on schedule despite the unrest, is now seen by many activists and protesters to be serving the military’s efforts to project an image of itself as the nation’s saviors and true democrats.

However, boycotting elections is a hard choice for many youth groups who rose up against Mubarak’s autocratic regime in hopes of ushering in democracy, fair and free elections. Others have been engaged in awareness campaigns or are fielding candidates. Many said that even if they vote, they will continue their sit-in.

Mohammed el-Qassas, one of the founders of The Egyptian Current party, which was born out of the revolution, described the general atmosphere, as “saddening,” but said he will vote just to “put my voice in the ballot.”

A member of another youth group, Injy Hamdi, 27, said “we will all go to the ballot boxes, vote and then come back to the square.”

Mohammed Abdel-Moneim, 38, said the protesters would not allow any election tampering, allegedly widespread during the past regime.

“We protect the ballot boxes with our bodies and lives if we have to. We fought hard for this right to vote,” he said.

The next parliament is expected to be dominated by the country’s most organized political force, the Muslim Brotherhood. The group decided to boycott the ongoing protests to keep from doing anything that could derail the election. However, the outcome of the vote is likely to be seen as flawed given the growing unrest and the suspension by many candidates of their campaigns in solidarity with the protesters.

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Builders have found a way to make money in a decrepit home market: Apartments.

Permit requests to build apartments jumped to a three-year high last month. In 12 months, they’ve surged 63 percent.

Blame the housing bust, which left many people without the means, the credit or the stomach to buy. More people need apartments. The demand has driven up monthly rents. And apartment-home builders are rushing to cash in.

That said, the overall home market remains depressed. Builders are still struggling. They broke ground on a seasonally adjusted annual rate of 628,000 homes last month, the government said Thursday. That’s barely half the pace that economists equate with a healthy market.

High unemployment, stagnant pay and waves of foreclosures have slowed sales of single-family homes, which make up about 70 percent of the home building market. Apartment construction may be surging, but it’s a small portion of the industry.

More apartment building won’t add enough jobs to reduce unemployment or hasten an end to the housing crisis. Still, it’s contributed to the overall economy’s growth for two straight quarters. And many economists expect apartment construction to grow for at least the next 12 months, as long as the economy avoids another recession.

“You’re not going to see apartments as an economic driver,” said James Marple, senior economist at TD Economics. “But it’s renters who are clearly going to drive the demand for housing.”

It’s also worth keeping the increase in perspective: The growth in apartment construction is coming off extremely low levels. Last year, for example, only 146,000 apartments were built. That was the fewest since 1993. This year’s pace isn’t much more.

By comparison, in 2005, just before the housing market went bust, 258,000 apartments were built. Some signs suggest that builders could match that level over the next few years.

One such sign: Permits for apartment buildings, a gauge of future construction, have jumped more than 60 percent over the past year. That compares with just 6.6 percent growth in permits for single-family construction over the same period.

“The demand is there,” said Mark Obrinsky, chief economist at National Multi Housing Council. “Rents have recovered, much of them to where they were before the recession.”

Bob Champion, who runs a real estate company in Los Angeles, says he has four apartment projects in development. That matches the number he had in 2005.

It’s quite a shift from 2006, when Champion’s company stopped building apartments because the cost of land had skyrocketed.

Champion has raised rents about 4 percent this year. His occupancy rate is 95 percent. As recently as last year, his rents were flat, and he was dangling incentives, like a free month’s rent, to woo tenants.

“People who can’t afford to buy a home, rent,” Champion said. “That’s why the apartment market has stayed healthy.”

Champion won’t likely be building as many apartments next year, though. Land prices have doubled in the past two years, he said. Competition for apartment land has intensified.

For many builders, financing for a project remains a big obstacle. So is time. Apartment projects take an average of 18 months to build.

Still, fewer home buyers mean more people must rent. Nearly 4 million new renting households were created between 2005 and 2010, according to Harvard’s Joint Center for Housing Studies. Under normal economic conditions, that’s more than 10 times the number of new renters who would be expected in a five-year span.

Homeownership has fallen more over the past decade than in any other 10-year stretch since the Great Depression. Roughly 65 percent of Americans own homes. That’s down from a peak of nearly 70 percent in the middle of the decade.

As more people have become tenants, landlords have felt emboldened to raise rents.

The average rent in the United States has risen 2.4 percent over the past 12 months to $1,004 a month, according to the real estate data firm Reis Inc. Over the previous year, rents rose just 1 percent. Between 2008 and 2009, they actually fell 2.7 percent.

AvalonBay Communities Inc., based in Arlington, Va., has raised rents by an average 6 percent in the past year. The company earned 11 percent more in rental revenue in the July-September quarter than in the previous quarter.

With nearly 54,000 units, AvalonBay is one of the largest apartment developers in the country. Nearly 96 percent of its apartments had been occupied by the end of September, according to its earnings reports.

The average rent at AvalonBay’s cheapest complex under construction, in Seattle’s Ballard neighborhood: $1,715. The builder completed 1,280 more apartments between July and September and started work on 933 others.

At Equity Residential, whose chairman is real estate magnate Sam Zell, rental income jumped 12.7 percent in the July-September quarter over the same period a year before.

Equity Residential is the nation’s largest apartment owner. Nearly 25 percent of its apartments are in Phoenix, Orlando and South Florida, which were hammered by the housing bust and where its average rents are the lowest.

Yet Equity’s properties there are faring well. The average rent for one of the company’s 9,300 apartments in Phoenix rose from $837 last year to $925 this year.

Zell, whose net worth is roughly $5 billion, has publicly extolled the prospects for his apartment business over his office and retail operations.

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Today’s record-low mortgage rates are out of reach for millions of U.S. homeowners who would benefit from them most.

One in four homeowners with a mortgage _ 11 million people _ owe more than their home is worth. These “underwater” borrowers have virtually no shot at refinancing.

Their plight is a drag on the housing market and the broader economy.

The Obama administration is hoping at least 1 million of these borrowers will take advantage of its refinancing program under more lenient rules unveiled Monday. Homeowners who are current on their payments will be eligible to refinance no matter how much their home’s value has dropped.

Still, it’s unclear how many borrowers will benefit. Lenders will remain under no obligation to refinance a mortgage they hold.

A growing number of these people are missing mortgage payments and falling into foreclosure. And the higher rates they’re locked into limit how much they can contribute to a weak economy. If they were able to refinance at today’s rates, it could boost consumer spending by tens of billions of dollars, economists say.

Underwater homeowners are paying an average 30-year fixed mortgage rate of 5.7 percent, according to an analysis of mortgage data by CoreLogic and The Associated Press. That compares with today’s average rate of 4.11 percent on a 30-year fixed mortgage. For a homeowner with a $250,000 mortgage, the lower rate would save more than $200 a month.

For many Americans, a few hundred dollars each month would mean the difference between paying their mortgage on time and in full and losing, or walking away from, their home guaranteed online payday loans.

Underwater borrowers are the “most desperate population in the country today,” says Barry Bosworth, an economist at the Brookings Institution.

Dan and Maggie Micoff bought a two-bedroom home in the Detroit suburb of Marine City in 2003. They paid $119,000. Eight years later, they’re underwater with a 6 percent loan.

If they could refinance, the Micoffs, both 58, could shave at least $120 from their monthly bill.

“The banks won’t work with us,” Maggie Micoff said. “We helped bail them out, and now we can’t even get a personal loan to get by. We could rent something for a few hundred dollars cheaper.”

Even among homeowners who do have equity in their homes, few are refinancing. Many have already refinanced within the past year. Others can’t meet tighter lending standards. That’s why underwater borrowers represent the best chance for refinancing to unleash spending that’s otherwise going toward mortgage bills.

With millions locked into artificially high rates, foreclosures are rising. Mortgage default notices surged nationally last month.

Whether the administration’s revamped mortgage refinancing program will reach more Americans this time is unclear, said Mark Vitner, senior U.S. economist at Wells Fargo.

“No one knows if it will spur a lot more people to refinance, but it’s a start,” Vitner said.

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