Why You Shouldn't Put Too Much Faith In October's Case-Shiller Index

The Case-Shiller Index posted awful numbers in its most recent reading. Each of the index's 20 tracked markets showed home price deterioration between September's and October's respective report. Some markets fell as much as 2.9 percent.

The drop in values is nothing about which to panic, however. The Case-Shiller Index is just re-reporting what we already knew. It's a common theme with the Case-Shiller Index, actually; a trait traced to the report's methodology.

The Case-Shiller Index is an imperfect housing indicator with 3 inherent flaws.

The first flaw is that the index makes use of a limited data set, tracking values in just 20 cities nationwide. That data set is then projected across the more than 3,100 other municipalities in the United States. The "national figures", therefore, aren't really national.

The second flaw is that, even within the tracked 20 cities, not all home sales are included. The Case-Shiller Index only tracks sales of single-family, detached homes, and within that market subset, it only uses homes that are "repeat sales". This specifically excludes sales of condominiums and multi-family homes, and new construction.

Lastly, Case-Shiller Index's third flaw is its "age". The Case-Shiller Index reports on a 60-day delay, and the values it reports are tied to contracts written even longer ago.  Sales contracts from July and August are responsible for October's closings so when we see the Case-Shiller Index as reported in December, some of the data it's reporting is 5 months old already. That's too old to be relevant.

Looking back at 2010, housing was at its weakest between May and August. Therefore, it's no surprise that the most recent Case-Shiller Index shows significant weakness.  Looking forward, we should expect the report to improve -- especially because of how strong New Home Sales and Existing Home Sales have been since summer.

The Case-Shiller Index is helpful for economists and policy-makers. It's not much good for individual homeowners, however. For accurate, real-time housing data, talk to a real estate professional instead.

Housing And Mortgage Predictions For 2011

With 2010 coming to a close, the "experts" are out in full force, making predictions for next year's housing and mortgage markets on business television and in the papers.

Predictions for 2011 are wide-ranging:

• Some say home prices will rise in 2011
• Some say home prices will fall in 2011
• Some say mortgage rates will rise in 2011
• Some say mortgage rates will fall in 2011

The problem with housing and mortgage predictions is that -- like all predictions -- they're just educated guesses about the future. Nobody knows what will really happen with the housing and mortgage markets in 2011. All anyone can do is theorize. As laypersons, though, it can be hard to separate theory from fact.

Television can make that task even more difficult at times.

As an example, when a well-dressed economist goes on CNBC and presents a clear, succinct argument for why home prices will fall on 2011, we're inclined to believe the analysis and conclusion. After all, the outcome seems plausible outcome given the facts. But then, immediately after, a different economist presents an opposite argument -- that home prices will rise in 2011 -- and her analysis seems sound, too.

Even Freddie Mac can't see the future.

Last year, the government group predicted mortgage rates to 6 percent in 2010. That never happened, of course. Instead, conforming mortgage rates dropped over a 7-month period this year to levels best be described as "historic".  Freddie Mac couldn't have been more wrong.

So, what's a Kennesaw homeowner to believe?

About the only thing that's certain right now is that mortgage rates remain low by historical standards, and that home prices do, too. Also, that both housing and mortgage markets appear to be riding momentum higher into 2011.  This suggests that it will be more expensive to buy and finance a home by the end of 2011.

Until that time, however, predictions are just guesses.

New Home Sales Rise In November; Hint At Strong Winter 2011

Like most housing data in November, the most recent New Home Sales report showed sales volume increasing last month, and home supplies falling.

According to the U.S. Department of Commerce, sales of new, single-family homes increased to 290,000 in November on an annual basis, a figure equal to the New Home Sales 6-month rolling average, and a 6 percent improvement from October.

At the current pace of sales, the national supply of new homes for sale will be exhausted in 8.2 months -- a strong 0.6-month improvement from October.

This data is consistent with the most recent Existing Home Sales report. It showed sales volume rising 6 percent, too, and a similarly-strong inventory drop.

For the housing market in Kennesaw , it's another step in the right direction. Since May's post-tax credit plunge, home prices have stabilized and a foundation for growth has been built. Home builder confidence data highlights this point.

Also interesting in the November New Home Sales report is the volume breakdown by price point. Less expensive homes powered the market:

• Homes under $200,000 : 47 percent of all sales
• Homes between $200,000-$299,999 : 29 percent of all sales
• Homes between $300,000-$399,999 : 14 percent of all sales

Luxury homes accounted for less than 2 percent of sales last month suggesting that builders count first-time and move-up buyers as their core market.

As 2010 comes to a close, housing looks poised for a rebound. Sales in all categories are improving, relative to 6 months ago, and the economy is improving. In conjunction with rising mortgage rates, the best time to buy a new home may be now.

What's Ahead For Mortgage Rates This Week : December 27, 2010

Mortgage markets worsened again last week as the holiday-shortened sessions did little to buck recent momentum. Although Freddie Mac reported mortgage rates dropping 0.02% from the week prior, loan officers on the street will report the opposite. Rates did not fall last week.

Conforming mortgage rates in Georgia moved higher for 7th straight week.

For rate shoppers and home buyers, it's been a harrowing two months.  

Since the Federal Reserve announced its QE2 program November 3, 2010, mortgage rates have moved from all-time lows to 7-month highs. Mortgage payments now cost $38 more per month per $100,000 borrowed as compared to the day before the stimulus was announced.

Mortgage rates look poised to increase again. Here's why.

A major reason why mortgage rates were so low, for so long, was that the U.S. economy was suffering. Consumer spending was slow, business forecasts were dour, and job growth was negative. These conditions lasted for longer than a year.

Lately, however, the conditions are changing:

• Consumer spending is up 5 months in a row (Bloomberg)
• Fannie Mae is boosting its economic outlook for 2011 (WSJ)
• Job growth is slow, but positive (Reuters)

And, furthermore, housing appears to be on solid ground. Existing Home Sales and New Home Sales improved last month, and home supplies are dropping. This, too, is good for the economy, which, in turn, is bad for mortgage rates.

This week, don't be surprised is mortgage rates rise again. The week is again shortened by holiday and there's a host of new data that may signal economic improvement including Pending Home Sales, consumer confidence surveys and the Case-Shiller Index.

Home Inventory Dwindles Into The New Year

Existing Home Sales jumped another 6 percent in November, the report's third month of improvement since bottoming in July.

According to the National Association of REALTORS®, a quarter-million more existing homes were sold during the annual period ending in November as compared to October.  An "existing home" is a home that cannot be considered new construction.

Additionally, the national housing supply dropped by a full month. At the current pace of existing home sales, the complete stock of homes for sale will be exhausted in 9.5 months.

November's strong housing data is yet another signal to buyers in Marietta that the housing market's foundation has been rebuilt, and that a rebound is imminent.  It's helped that there are great "deals" on which for buyers to pounce.

In November, short sales and foreclosures accounted for one-third of all existing homes sold, and carried an average price discount of 10 percent and 15 percent, respectively, as compared to non-distressed sales.

Repeat buyers continue to power the market, too, representing more than half of all home buyers.

• First-time buyers : 32% of all buyers
• Investors : 19% of all buyers
• Repeat buyers : 51% of all buyers

This breakdown suggests that housing has regained its footing. First-time buyers can't support a market long-term like repeat buyers can and, as compared to 12 months ago, the percentage of repeat buyers is now up 14 points.

Home buyers take note. Raw sales volume is rising and available inventory is dropping. Basic supply-and-demand tells us that this will lead home prices higher. Furthermore, mortgage rates are rising quickly, increasing the cost of homeownership.

If buying a home is a part of your plan for 2011, consider accelerating your purchase time frame. Existing homes account for more than 80% of homes sold nationwide. If the market keeps improving like this, your home affordability will worsen.

Housing Starts Rise In November, But With A High Margin Of Error

The number of single-family Housing Starts increased in November, adding 30,000 units as compared to October.

The Census Bureau defines a "housing start" as a home on which construction has started.

November's starts represents a 7 percent increase from the month prior. However, if you see the Housing Starts story online or in the papers, you'll notice that the press is calling the market gain at 4 percent.

So which result is right? The answer is both.

The government's monthly Housing Starts data is published as a composite report; lumping activity among 3 separate housing types into a single, group reading.

The 3 housing types are:

1. Single-family homes (i.e. 1-unit)
2. Multi-unit homes (i.e. 2-4 units)
3. Apartments (5 units or more)

The group reading is a fair description of the market and it's easy-to-understand. As a result, it's what the press tends to report. However, for home buyers in Georgia , it's the single-family category that's most relevant.

 

The reason why single-family homes accounted for 84% of November's Housing Starts is because that's the type of home that most buyers buy. Few purchase 2-4 unit properties, and even fewer buy entire apartment complexes.

That said, it's possible that November's Housing Starts data is wrong. Within the press release, the government placed an asterisk next to the data, indicating that the figure's margin of error exceeds its actual measurement.

Against a 7 percent gain, the reported margin of error is 13.5%. There is no statistical evidence, therefore, to prove the actual change was different from zero.

If Housing Starts did fall in November, it will help to reduce the Atlanta housing inventory, which will, in turn, help keep home prices high. For home sellers, this could mean good news. Fewer homes for sale increase competition among buyers.

Foreclosure Activity Plunges (But With An Asterisk)

According to foreclosure-tracking firm RealtyTrac, the foreclosure filings fell 21 percent in November to 262,339 units nationwide. A foreclosure filing is defined as default notice, scheduled auction, or bank repossession. 

November marked the first time since February 2009 that the number of monthly filings failed to surpass 300,000 units.

There were other notable November statistics, too, included:

• November's 21 percent month-to-month decrease was the largest in RealtyTrac's recorded history
• November's 14 percent year-to-year decrease was the largest in RealtyTrac's recorded history
• Nevada led the nation in foreclosure activity for the 47th straight month

However, we can't read into November's RealtyTrac report too much; ultimately, history may treat it with an asterisk. Controversy surrounding the so-called robo-signers forced some of the biggest banks to institute a temporary halt to foreclosures in November. Foreclosure activity did fall last month, but the moratorium makes the figures look better for housing than if there had been no interference.

The halt in foreclosures is also why Utah leaped into the #2 state for foreclosures nationwide. Perennial foreclosure-leading states like California, Michigan and Arizona posted double-digit improvements in November whereas Utah did not.

Banks have since resumed foreclosure activity so December's results may be a better gauge for how the market is truly performing.

Foreclosures tend to be sold at discount and low home prices can entice home buyers to make an offer. If you're such a buyer in Marietta and want to look at foreclosed homes, talk to a real estate agent first.

Although there's a host of online search engines that specialize in foreclosures, a licensed agent may have access to broader inventory, plus the ability to negotiate it more effectively.

What's Ahead For Mortgage Rates This Week : December 20, 2010

Mortgage markets worsened again last week as belief in a U.S. recovery and concerns for inflation took hold on Wall Street.  Conforming mortgage rates rose in Georgia for the 6th straight week.

According to Freddie Mac's weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is 0.66% higher this week as compared to rates on November 11, but loan originators will tell you that figure is understated.

Real mortgage rates -- mortgage rates available to everyday homeowners and buyers in Kennesaw are up by as much as a full percentage point since November, and loan costs are rising, too.

The Refi Boom of 2010 is over.

Last week, mortgage markets revolved around the Federal Open Market Committee. The FOMC met Tuesday and voted to leave the Fed Funds Rate unchanged within a target range of 0.000-0.250. This was expected. However, markets seemed to be surprised by the Fed's take on inflation.

In its press release, the Fed said inflation is running too low to benefit the economy. Its policies, including the group's $600 billion bond market program, may be meant to spark inflation, then. This would lead mortgage rates higher and Wall Street knows it.

Mortgage rates spiked after the Fed adjourned.

This week, with a sparse data schedule and trade volume thinning because of holidays, expect mortgage rates to be volatile.

Although rates are higher since 7 weeks ago, they remain low, historically. There's still a chance to capitalize on the lowest mortgage rates in decades. If you haven't refinanced this year and want to know what's available, talk to your loan officer right away.

Why Builder Confidence Surveys Matter To Buyers Of New Homes

Home builder confidence is holding firm this month, according to the National Association of Home Builders.

The group's monthly Housing Market Index survey posted 16 for December. That's the same value as from November. It's also equal to this 2010's average HMI reading.

HMI is scored on a scale of 1-100, and is a composite of 3 separate home builder surveys measuring single-family sales; projected single-family sales over the next six months; and prospective buyer foot traffic.

The results of the 3 surveys were as follows:

• Single-Family Sales : 16 (unchanged from November)
• Projected Single-Family Sales : 25 (unchanged from November)
• Prospective Buyer Foot Traffic : 11 (from 12 in November)

Values of 50 or better indicate favorable conditions for home builders. Values below 50 indicate unfavorable conditions.

In other words, although improving, conditions for home builders remain less from excellent. Home buyers in Kennesaw can use this to their advantage. When builders feel pressure from the market, they're more likely to offer discounts.

On the other hand, job growth is returning, the economy is expanding, and mortgage rates are rising. These 3 factors are thought to boost housing markets. So, despite an unfavorable HMI reading, home builders might still less willing to "make a deal"; holding out for a better 2011.

November's strong Housing Starts data supports that line of thinking.

If you're buying a newly-built home in the BrookStone area , or expect to buy sometime in 2011, keep an eye on home builder sentiment surveys. The better the builders feel, the more you may be asked to pay to buy your next home.

Is a Licensed Loan Officer Processing Your Loan Request?

Would you buy a house from Realtor who was not licensed? Would you have taxes done by unlicensed CPA or tax preparer? Would you buy stocks from unlicensed broker? Would you have car serviced by unlicensed mechanic?

The simple answer. Of course not! The SAFE-ACT (Security and Freedom Ensured Act of 2003) requires every Loan Officer, who works for a Mortgage Banker or Broker, to register and obtain a license through the NMLS (National Mortgage Licensing System  Registry) system. Loan Officers who work for banks must register with NMLS; however, they are not required to obtain a license. This is a loop hole for the big banks again beware! They say just trust us we are MR BIG BANK we know what’s best for you.

The real LISCENED Loan Officer in order to obtain his or her license, must have their fingerprints taken, pass a FBI background and local background check, take and pass annual mortgage education courses, pass a very lengthy the national mortgage exam. State laws also require the loan officer pass additional licensing regulations for each state they do business in. Again big banks get to bypass this one!

Keep in mind just because the big bank holds your mortgage you could be working with some seasonal unlicensed hourly worker. They may be a temporary worker! Next time your shopping Ask the person on the phone or email a few simple questions. Then look them up here a the NMLS consumer look up system.

Simple Real Estate Definitions : Loan-Level Pricing Adjustments

Loan-level pricing adjustments are mandatory loan fees based on a borrower's specific default risk.

First introduced in 2008, LLPAs were Fannie Mae's and Freddie Mac's logical response to massive balance sheet losses. At the time, the housing market was deteriorating and mortgage delinquencies were rising.

To "better align with loan risk characteristics", the two entities created specific fees to be associated to specific loan traits, to be charged to all borrowers.

LLPAs are still in existence today.

Today's loan-level pricing adjustments can be grouped into 5 basic categories. Application exhibiting any of the 5 traits can trigger LLPAs, adding to a borrower's loan fees:

1. Credit Score (i.e. the borrower's FICO is below 740)
2. Property Type (i.e. the subject property is multi-unit)
3. Occupancy (i.e. the subject property is an investment home)
4. Structure (i.e. there is a subordinate/junior lien on title)
5. Equity (i.e. mortgage insurance is required by the lender)

In many respects, loan-level pricing adjustment are similar to auto insurance. All things equal, the driver of a "fast" car will pay higher costs than the driver of a "safe" car.  The same is true for mortgages.

Loan-level pricing adjustments are public information. Fannie Mae publishes the complete LLPA matrix on its website. The chart can be confusing, however. If you have questions about how LLPAs work, talk with your loan officer.

A Simple Explanation Of The Federal Reserve Statement (December 14, 2010 Edition)

Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged within in its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that since November's meeting, the "economic recovery is continuing", but at a pace deemed too slow to make a material impact on unemployment rates. It also said that household spending in increasing, but remains constrained by joblessness, tight credit and lower housing wealth.

In addition, the Fed used its press release to re-affirm its plan to keep the Fed Funds Rate near zero percent "for an extended period" while also opting to keep its $600 billion bond market support package in place.

And lastly, of particular interest to home buyers and mortgage rate shoppers, the FOMC statement devoted an entire paragraph to the Federal Reserve's dual mandate of keeping inflation and employment at acceptable levels.

The Fed acknowledges making progress toward this goal, but calls it "disappointingly slow". Currently, inflation is too low for what the Fed deems acceptable, and unemployment is too high. 

Over time, the Fed expects both measurements to improve.

Mortgage market reaction to the FOMC statement has been negative thus far. Mortgage rates in Marietta are unchanged post-FOMC, but appear poised to worsen.

The FOMC's next scheduled meeting is a 2-day affair, January 25-26, 2011. It's the first scheduled meeting of 2011.

Make A Mortgage Rate Strategy Ahead Of Today's Fed Meeting

The Federal Open Market Committee holds a one-day meeting today, its 8th scheduled meeting of the year and 10th overall.

The FOMC is part of the Federal Reserve, the government group that sets U.S. monetary policy. The Fed's primary policy-setting tool is an interest rate known as the Fed Funds Rate.  The Fed Funds Rate is the interest rate at which banks borrow money from each other. 

2 years ago Thursday, in an effort to jump-start the economy, the FOMC met and voted to lower the Fed Funds Rate to as close to zero percent as possible without actually going to zero percent; the benchmark rate was prescribed to a range of 0.000-0.250 percent.

The Fed Funds Rate had never been set so low before, but ever since, it's been held to that range. It will likely be there until early-2011, too, but that doesn't mean that mortgage rates won't change today when the Fed adjourns today.

Because the Fed Funds Rate has been so low for so long, businesses and consumers have been able to borrow money cheaply. As a result, both capital and household spending have been on the rise lately, creating tailwinds for the economy.

The Fed is expected to acknowledge this today which, in turn, should lead mortgage rates higher.  This is because, in the current recovery cycle and until markets find balance, what's good for the economy tends to be bad for rates in Atlanta.

The Fed's press release today will be a focal point for markets.  Talk of higher-than-expected inflation or better-than-expected growth, and mortgage rates should rise. Talk of a slowdown should lead rates lower.

Either way, we can't be certain what the Fed will say -- or do -- this afternoon. If you're floating a mortgage rate, the safe move is to lock before 2:15 PM ET today.

What's Ahead For Mortgage Rates This Week : December 13, 2010

Mortgage markets worsened last week as the U.S. economy showed additional signs of strength; and global demand for mortgage bonds slipped.

Conforming mortgage rates rose in Georgia and around the country for the fifth straight week. It's a streak that's been marked by volatile pricing that's rendered rate shopping difficult.

Last week, lenders published as many as 5 rate sheets per day where, by comparison, over the past 12 months, lenders have averaged closer to 2 rate sheets per day.

This week, with a bevy of data set for release and a Federal Open Market Committee meeting, expect volatility to remain high. Wall Street remains undecided on the future of the U.S. economy and there will be plenty on information on which to trade:

• Tuesday : Producer Price Index, Retail Sales
• Wednesday : Consumer Price Index, Housing Market Index
• Thursday : Housing Starts, Initial and Continuing Jobless Claims

Despite the high impact of this week's economic releases, though, it will be Tuesday's FOMC meeting that sets the tone for the mortgage bond market and, consequently, for mortgage rates in Kennesaw.

The Fed's last meeting in early-November provided the spark to the recent rise in mortgage rates. In the group's post-meeting press release, it acknowledged growth while committing $600 billion to bond markets. The move triggered a massive bond sell-off that has since pushed conforming mortgage rates to a 5-month high.

The Fed adjourns at 2:15 PM ET Tuesday afternoon.

If you're still floating a mortgage rate or have otherwise yet to lock, consider executing a rate lock agreement early in the week. Once the Federal Open Market Committee adjourns, mortgage rates could spike again. And, although rates are up since November, they remain historically low.

Fannie Mae Guidelines Change Monday. Apply Today To Lock In To "Old" Rules.

Fannie Mae rolls out new mortgage guidelines Monday. Therefore, if you're in the process of applying for a conforming home loan, consider giving your complete application by the close of business Friday.

All Fannie Mae applications taken on, or after, December 13, 2010, are subject to the changes.

As compared to mortgage guidelines updates of the last 3 years, Monday's roll-out is relatively small. There is no change to the maximum debt-to-income ratio, for example; nor is there an increase in the minimum FICO score requirement.

Most mortgage applicants in Atlanta and nationwide will be unaffected.

Others, however, will find getting approved to be more difficult.

The most major change is with respect to revolving and installment debt. This category includes credit cards, charge cards, and student loans, among others. Going forward:

1. Debt with fewer than 10 payments remaining must now be included in an applicant's monthly obligations.
2. Debt not reporting a monthly payment must be assigned a payment equal to 5% of the outstanding credit balance.

These edits will raise applicants' debt-to-income ratios, and may push some of them beyond the maximum allowable limits, resulting in a denial. People with relatively large car payments are especially susceptible.

Another change relates to receiving gift funds for a purchase. Unlike debt calculations, though, the "gifting" process is getting easier.

Under the new Fannie Mae guidelines, buyers of owner-occupied, 1-unit properties (i.e. single-family homes, condos, townhomes) can forgo Fannie Mae's customary, minimum 5% downpayment contribution from personal funds. Downpayments can be comprised 100 percent of gifted and/or granted monies.

Buyers of second or investment homes, or multi-unit properties must still make a 5% downpayment from their own funds.

And, lastly, Fannie Mae is easing some of its documentation requirements. Salaried applicants from whom commissions and/or bonuses paid account for less than 25% of annual income will have fewer paystubs to produce for underwriting.

Fannie Mae's complete guideline changes are available online at http://efanniemae.com.

Home Affordability Reaches Record-Levels... Last Quarter.

Last quarter, with home prices still relatively low and mortgage rates making new, all-time lows almost weekly, the cost of home ownership was extraordinarily low in Georgia and most U.S. markets.

According to the National Association of Home Builders' quarterly Home Opportunity Index, 72.5 percent of all new and existing homes sold between June-September 2010 were affordable to families earning the national median income. This ties the all-time high for home affordability, set in the first quarter of 2009.

The data also underscores that, when compared to historical norms, it's a fantastic time to be a Kennesaw home buyer.

Prior to 2009, the Home Opportunity Index rarely topped 65. The index has remained above 70 ever since.

All real estate is local, though, and on a city-by-city basis, home affordability varied last quarter.

For example, 96% of homes sold in Kokomo, IN are affordable for families earning the area's median income. This handily beat the average figure and led the nation. Looking at major cities, Indianapolis led the pack.

93% of homes in Indianapolis are affordable to families earning the area's median income. This ranks #9 nationwide.

On the opposite end of the affordability scale is the New York-White Plains, NY-Wayne, NJ region. For the 10th consecutive quarter, the New York Metro region ranks last in U.S. home affordability. Just 23% of homes are affordable to families earning the local median income, although this is 3 points higher versus Q1 2010.

The rankings for all 225 metro areas are available online.

Regardless of where your hometown ranks relative to its neighbors, home affordability remains high as compared to historical values. That said, with mortgage rates rising and home sales expected to climb this winter, it's unlikely that the Home Opportunity Index will improve.

Buying a home may never be this inexpensive again. If you planned to buy in mid-2011, consider moving up your time frame.

Boost Your 2010 Tax Deductions By Making Your January Mortgage Payment A Little Bit Early

Looking for an extra 2010 tax deduction? Consider making your January mortgage payment a few days early.

It's a simple strategy that works because of how mortgage interest works.

Unlike rent which is paid in advance at the start of a month, mortgage interest is only paid after it's been borrowed. Your January mortgage payment, therefore, accounts for the interest that accrued in December.

And for a lot of Kennesaw homeowners, that mortgage interest is tax-deductible.

By making January's mortgage payment in December, eligible homeowners can apply the interest paid to 2010's tax returns instead of waiting to claim the same deduction against 2011. Don't cut it close, though. It's best to remit payment prior to the last week of the month, leaving your servicer ample time to receive and process your paperwork.

Most importantly, though, before prepaying on your mortgage, talk to your tax professional.

Not every homeowner is eligible for mortgage interest tax deductions, nor should every homeowner itemize their respective tax deductions. The "pay early" plan could be a wasted effort for you, ultimately, depending on your taxpayer profile.

If you don't have an accountant that you trust, call or email me anytime; I'm happy to make a recommendation to you.

Pending Home Sales Index Points To A Budding Seller's Market

The Pending Home Sales Index surged 10 percent in October as low mortgage rates and low home prices spurred Marietta buyers into action.

A "pending home sale" is an existing home under contract to sell, but not yet closed. The Pending Home Sales Index is at its highest level since April 2010 -- the contract deadline date for this year's federal home buyer tax credit program.

The jump may also explain why home builder confidence is rising even as the number of new homes sold fades. Builders are seeing buyers' renewed interest in housing first-hand and expect the next 6 months to be dramatically better.

On a regional basis, gains in October's Pending Home Sales Index varied as compared to September. The Midwest led the charge, and the West was the laggard.

• Northeast Region: +19.6%
• Midwest Region : +27.3%
• South Region : +7.1%
• West Region : -0.4%

Home buyers looking in areas such as Vinings should take last month's Pending Home Sales Index to heart. According to the National Association of Realtors®, 80 percent of homes under contract close within 60 days, so we can reasonably expect November's and December's existing homes sales data to be similarly strong.

In other words, the housing market is heating up and may have already shifting toward sellers. Changes like that lower buyer leverage, and increase the cost of homeownership. Coupled with rising mortgage rates, the shift is even more defined.

The best time to buy a home this year may have already passed. The next best time may be right now.

Talk to your real estate agent if you're planning to buy a home in 2011. It may be smart to move up your time frame.

What's Ahead For Mortgage Rates This Week : December 6, 2010

Mortgage markets lost ground last week on growing optimism for the economy, a poor run for the dollar versus the euro, plus the lingering concerns that inflation will grip the U.S. long-term.

Conforming mortgage rates in Georgia rose for the fourth week in a row, stymying rate shoppers and raising the effective cost of homeownership for new buyers in need of a mortgage.

After a spectacular run that drew 30-year fixed rates to near 4.00, mortgage rates have returned to their highest levels since late-June.

Last week was heavy on news. Bond traders were hit with the Beige Book; with the ADP Challenger Report; with the ISM Manufacturing Report; and, with Pending Home Sales data for October. Each release moved markets.

Only Friday's Non-Farm Payrolls report kept mortgage rates from really soaring.

According to the government, 39,000 net new jobs were created in November, and September's and October's data was revised higher by a combined 38,000.  The sum of these figures fell well short of Wall Street expectations -- investors has expected 146,000 net new jobs in November.

As a result, mortgage rates made their largest, intra-day improvement of the year Friday morning, although they slid higher through the afternoon. Rates fell 1/8 percent Friday as compared to Thursday and rate shoppers may see that momentum carry forward into this week.

Fed Chairman Ben Bernanke gave a televised interview Sunday evening in which he said, among other things:

1. "The fear of inflation is way overstated."
2. Additional bond market support is "certainly possible".

Both comments should help to allay inflation concerns, and may lead mortgage rates lower this week. If you're floating a mortgage rate, keep a watchful eye on markets and be especially wary if mortgage rates start to rise again. November was rough on mortgage bonds.

If December follows suit, expect mortgage rates to approach 6 percent.

Understatement : Freddie Mac Says Mortgage Rates Rose Last Week

It's been a wild 30 days for home affordability.

Since the Federal Reserve's November 3 press release, in which our nation's central banker committed $600 billion to bond markets, mortgage rates have leaped, moving quicker than the news can report them.

This week is a terrific example of that.

Today, newspaper headlines in Georgia and around the country read that mortgage rates rose 0.06% on average over the past 7 days, and that average loan fees remain unchanged at 0.8 points. The data is based on Freddie Mac's Primary Mortgage Market Survey, a weekly poll of more than 100 lenders around the country.

Unfortunately for Atlanta home buyers and other local rate shoppers, the Freddie Mac figures are low. Both mortgage rates and fees rose by more than what's being reported.

Freddie Mac's data is not real-time. It's out of date for today's pricing.

According to Freddie Mac, the survey's methodology has it collecting rates from participating lenders between Monday and Wednesday, averaging the results, and then publishing that data Thursday late-morning. The problem there, as you know if you've shopped for a mortgage rate, is that mortgage rates change all day, every day.

Monday's rates are unrelated to Wednesday's rates, yet both are included and given equal weight by Freddie Mac. Some weeks, it's not a problem; rates are relative static. 

This week was not such a week.

 

Rates were jumpy Monday and Tuesday, rising and falling throughout the course of the day. Action like that is normal. But Wednesday, mortgage bonds put forth their third-worst daily showing of the year.  Rates rose by as much as 3/8 percent between the market open and close, with the bulk of the sell-off coming late in the day. In other words, after the deadline of Freddie Mac's survey.

Mortgage lenders accurately reported their rates to Freddie Mac, but they reported them before the market turn a turn for the worse.

The lesson is that mortgage rates are time-sensitive and can't be captured by a weekly, average survey. When you need to know what mortgage rates are doing right now, the best place to check is with your loan officer. Otherwise, you may just get yesterday's news.

Mortgage Rates Rapidly Rising On Jobs Data; More Risk Ahead For Friday

Mortgage rates are rising, up nearly 1 percent since mid-October. Tomorrow, rates could rise again.

The Bureau of Labor Statistics releases the November jobs report at 8:30 A.M. ET Friday. With a stronger-than-expected reading, mortgage rates should continue their climb, harming home affordability across Georgia and nationwide.

And already, Wall Street is bracing for big results.  Here's why.

Wednesday, payroll processor ADP said that 98,000 private-sector jobs were created in November. The figure was a complete blowout reading as compared to analyst estimates, which had the results in the 50,000 range. But that wasn't all. ADP re-measured and re-reported October's gains, too. It found that 84,000 jobs were created -- not the 43,000 on its original report from 30 days ago.

If jobs growth is the keystone to economic recovery, the ADP report suggests that recovery is already underway.

It's bad news for rate shoppers. A faltering economy helped keep mortgage rates low. A recovering one should make rates rise. And, that's exactly what happened Wednesday.

In response to the ADP report, conforming mortgage rates posted their third-worst day of the year. Rates climbed as much as 0.375 percent throughout the day as lenders scrambled to keep up with a deteriorating market.

At some banks, rates changed 4 times between the market's open and close.

Tomorrow, analysts expect the government to report 146,000 jobs created in November. Mortgage markets and home affordability have a lot riding on the actual results. A lower-than-expected reading should lead mortgage rates lower. Anything else and mortgage rates should rise. Likely by a lot.

Therefore, if you're shopping for a mortgage right now, or floating a loan that's in-process, think about your personal risk tolerance and whether you want to gamble against rates moving higher. Once Friday morning's report is released, it may be too late to lock something lower.

September's Case-Shiller Index Reflects A Slowing Housing Market

Standard & Poors released the September Case-Shiller Index Tuesday. The Case-Shiller Index is a home-value tracker. The report shows home prices down 0.7% from August and values fading, in general.

Case-Shiller representatives assessed the findings as "another weak report; weaker than last month", citing deterioration in 18 of 20 tracked markets. Upward pricing momentum from the summer is slowing and values remain 30% off the market's June 2006 peak. It could spell bad news for home sellers in Marietta this winter.

That said, the Case-Shiller Index is imperfect; its methodology flawed. The index is not meant for use by individual buyers or sellers -- for 3 reasons.

First, the Case-Shiller Index reports on a 2-month delay. Today is December 1 and we're discussing data from September. In the 8 weeks since, the economy has shifted to a net jobs gainer, and the Federal Reserve has committed to $600 billion in re-investment.  These are major developments that weren't a part of September's housing market, but are relevant today.

Especially because employment is largely believed to be a keystone to housing.

Second, the Case-Shiller sample set is limited to just 20 cities nationwide. This means that most U.S. home sales are specifically not included in the Case-Shiller Index's monthly findings.

And that ties into reason number three -- all real estate is local. No matter what the Case-Shiller Index says about the country, what matters to your local market is what's happening in your local market. Each neighborhood has its own housing economy and that's something that can't be captured by a national report.

New Home Sales Slip In October

After posting a strong September, the number of newly-built homes sold nationwide slipped in October.

Total units sold on an annual basis dropped by 25,000 from September; supplies of new homes climbed 0.7 months. Home supply is back to its rolling, 6-month average of 8.6 months.

Like everything else in real estate, however, the October's New Home Sales results varied by location.

For example, except for the South, each U.S. region posted a loss. In the South, there was a 3 percent gain. This is statistically significant because more new homes are sold in the South than in all other U.S. regions combined.

In October, the South accounted for 58 percent of all homes sold.

The dip in New Home Sales did not surprise Wall Street. New Home Sales is closely correlated to Housing Starts, and Housing Starts fell in July and August. Furthermore, it seems home builders expected the dip and are brushing it off.

In a poll taken 2 weeks ago, builders reported higher confidence in housing, and their respective prospects for the future. Home builder confidence is at its highest point since June.

For buyers in Marietta , the effects of New Home Sales data are unknown. In a normal environment, falling sales volume and rising home supplies would help shift negotiation leverage away from the seller and toward the buyer, resulting in lower sales prices.

However, in this market, the "sellers" (i.e. home builders) are more confident about housing, and that offsets a buyer's statistical edge.

With home prices stagnant and mortgage rates rising, therefore, the best "deals" may come between now and the New Year.

What's Ahead For Mortgage Rates This Week : November 29, 2010

In a holiday-shortened week on Wall Street, mortgage markets improved on 3 of 4 days, but still posted its fourth consecutive losing week.

Unfortunately for rate shoppers and home buyers in Georgia , last week's 3 days of gains were mild improvements; the one day of deterioration was among the Top 10 worst days for mortgage bonds this year.

Mortgage rates in Marietta are at their highest levels since mid-July. The Refi Boom is unwinding quickly.

Last week underscores the importance of the global community to the future of the U.S. mortgage market. Two of the main reasons why mortgage rates increased were non-domestic.

1. Concerns for a full-blown North Korea/South Korea conflict lessened quickly
2. The likelihood of a speedy, $85 billion bailout Ireland increased

The two events stemmed the typical safe-haven buying patterns that accompany geo-political and economic uncertainty, and drive down mortgage rates.

This week, mortgage rates may rise again.

First, Ireland's bailout package was signed Sunday morning and that relieves some pressure on the European Union.  Second, this week's economic releases should show that the U.S. economy is still expanding, and that U.S. consumers are still spending -- both are tied to higher rates.

A sampling of the week's releases include:

• Tuesday : Case-Shiller Index; Consumer Confidence surveys
• Thursday : Initial and Continuing Jobless Claims; Pending Home Sales
• Friday : Non-Farm Payrolls; Unemployment Rate

If you haven't locked a mortgage rate and are waiting for "the bottom", remember that the mortgage market waits for no one. Rates are much higher since the start of November and look ready to rise even higher.  Call your loan officer and get your application in process this week.

The longer you wait, the higher that rates could go.

Breaking News Loan up to 125% on the HARP or Home Affordable program set to expire June 2011

H.A.R.P. Home Affordable Program

The Home Affordable Program is designed for homeowners who pay their mortgage on time but are not able to refinance because they have little or no equity in their home. But hurry this program is set to expire and many lenders do not understand the program or are too busy with the REFI boom to help you close your loan.

We understand and can help see ATLrates.com or call 770-792-7979  or  Outside Atlanta call 1-800-792-0068

You must meet the following criteria to qualify for the Home Affordable Program:

1. Your current loan must have been sold to Fannie Mae or Freddie Mac.  To find out, contact your current loan servicer or visit: http://www.makinghomeaffordable.gov/loan_lookup.html
   
   
2. During the last 12 months, all of your mortgage payments must have been made within 30 days of the due date.
   
   
3. Your new loan amount may not exceed 125% of the current appraised value of your home. 

To view rates and obtain a good faith estimate for a Home Affordable refinance with ATLRATES.com.


Frequently Asked Questions

If I have a first and a second mortgage, do I still qualify?

As long as the balance due on the first mortgage is less than 125% of the value of the home, you may qualify.  The lender on the second would have to agree to subordinate their loan to the new first mortgage, thereby remaining in second position.

Can I get cash out to pay off debts?

No.  However, provided the new loan amount will not exceed 125% of the value of the home, you may include all closing costs in the new loan so you don’t have to come out of pocket with any cash.

If I’m delinquent on my mortgage, will I still qualify?

No.  Borrowers who are currently delinquent on their mortgage should contact their current lender/servicer and ask about a loan modification.

Will I need mortgage insurance?

If your existing loan does not have Private Mortgage Insurance (PMI), it will not be required as part of your HARP refinance either. If your existing loan has PMI, your HARP refinance will also require it. PMI for this program will only be available through your existing PMI company.

Below are the HARP PMI guidelines of the major PMI companies:

HARP REFINANCE PMI GUIDELINES
Existing PMI Company	Refinance with New Lender	Refinance with Existing Lender
Genworth (Formerly GEMICO)	Max 105% LTV	Max 125% LTV
	45% Max DTI	Per AUS Approval
	New Premium	Same Premium
MGIC	Max 105% LTV	Max 125% LTV
	45% Max DTI	Per AUS Approval
	Same Premium	Same Premium
	.5% Upfront Fee
PMI	Max 125% LTV	Max 125% LTV
	Per AUS Approval	Per AUS Approval
	Same Premium	Same Premium
Radian	Max 105% LTV	Max 125% LTV
	45% Max DTI	Per AUS Approval
	New Premium	Same Premium
UGI	Not Available	Max 125% LTV
		55% Max DTI
		Same Premium
RMIC	Max 105% LTV	Max 125% LTV
	55% Max DTI (41% if Mtg payment increases)	No DTI Requirement
	New Premium	Same Premium

How long will the Home Affordable Program be available?

The program expires on June 30, 2011. Your refinance transaction must be closed and funded on or before that date.

Fed Minutes Help Push Mortgage Rates To 4-Month High

The Federal Reserve released its November 2-3, 2010 meeting minutes Tuesday afternoon. Mortgage rates in Georgia have been on the move since.

The Fed Minutes is a comprehensive review of Federal Open Market Committee meetings; a detailed look at the debates and discussions that shape our country's monetary policy. The report is published 3 weeks to-the-day after the FOMC adjourns.

Fed Minutes add depth to the briefer, more well-known "statement" to the markets which is issued upon adjournment. As a comparison:

• The November 3 statement contained 497 words
• The November 3 meeting minutes contained 6,623 words

If the Fed Statement is the executive summary, the Fed Minutes is the novel. And, the extra words matter.

When the Federal Reserve publishes its minutes, it gives clues about the groups next policy-making steps.  For example, in November's minutes, it's revealed that the Fed discussed setting inflation targets for the economy; holding occasional policy briefings for the press; and, working to set yields on instruments such as the 10-year Treasury note.

In addition, the Federal Reserve acknowledged a video conference hosted October 15, the second such "unannounced" meeting of the year.  The other was May 9, 2010.

Bond markets have not taken kindly to the Fed Minutes. The minutes show a propensity toward Fed "action", most of which markets believe to be inflationary. Inflation leads to higher mortgage rates and that's exactly what we've seen.

As compared to Tuesday morning, mortgage applicants in Atlanta are finding conforming and FHA mortgage rates to be higher by as much as 0.375 percent. In "real life" terms, assuming a 30-year term, that's an extra $264 in annual mortgage payments per $100,000 borrowed.

If you're still rate shopping, consider getting locked today. As a result of the recent shift, mortgage rates are now at a 4-month high.

October Existing Home Sales : Buyers And Sellers In Balance

After two months of surging sales, home resales fell by 100,000 units last month to 4.4 million homes nationwide.

October's Existing Home Sales tally is slightly below the report's 6-month rolling average, according to the National Association of REALTORS® -- a time span which includes this year's $8,000 federal home buyer tax credit's tail end.

Housing statistics have been wildly inconsistent during that period.

For the future of Atlanta housing markets, though, it's encouraging that first-time and investment property buyers were both outnumbered by "move-up" buyers; buyers that have sold their respective homes in favor of larger ones. It's the move-up buyers that power housing.

In October, buyer profiles broke down as follows:

• First-time buyers : 32 percent of all buyers, unchanged from September
• Repeat home buyers : 49 percent of all buyers, down one tick from September
• Investors : 19 percent of all buyers, up one tick from September

As a point of comparison, first-timers represented 50 percent of all purchases in October 2009.

For Vinings home buyers, October's Existing Home Sales report is neither weak nor strong. It signals that, with mortgage rates low and home affordability high, housing may be reaching some form of balance. Because -- although home sales are down -- home supplies are down, too.

We can infer that buyers outnumber sellers, but probably not by much. In most areas, negotiation leverage is still up for grabs.

At the current pace of sales, the complete housing stock would be depleted in 10.6 months.

Applying For A Mortgage Soon? Don't Open New Credit Cards On Black Friday.

Black Friday is 3 days away. It's the official start of the 2010 Holiday Shopping Season.

Sales are expected to top $111 billion this year and, already, businesses are vying for shoppers and their dollars. Newspaper circulars are getting larger, and in-store discounting is more prevalent.

But one discount that shoppers should think twice about is the popular "Open A Charge Card, Save 20%" promotion. The short-term savings may be tempting, but the long-term costs may be huge.

It's because of how credit scores work.

According to myFICO.com, "new credit" accounts for 85 out of 850 possible credit scoring points, with new credit defined by such traits as:

• Number of recently opened accounts
• Number of recent credit inquiries
• Time since recent credit inquiries
• Proportion of new accounts to all accounts

These traits are negatives against a FICO score so with each new, in-store credit card application, a person's credit score will fall. The fall will be especially pronounced for persons lacking credit "depth", or who have made a disproportionately large number of new credit applications recently.

For soon-to-be homeowners, or would-be refinancers in Kennesaw , credit scores are worth keeping high. This is because credit scores change the mortgage rates and/or loan fees for which an applicant is eligible.

As an illustration, assuming 20% equity on a $200,000 conforming loan:

• 740 FICO : No added loan costs
• 720 FICO : 0.250% increase in loan costs, or $500
• 700 FICO : 0.750% increase in loan costs, or $1,500
• 680 FICO : 1.500% increase in loan costs, or $3,000
• 660 FICO : 2.500% increase in loan costs, or $5,000

 

It's expensive to have a low credit score -- more expensive than the money saved by opening a card at the mall, anyway.

That said, if you know you won't need your credit for a mortgage within the next 6 months, the risk of applying for in-store credit cards is likely small. But if you'll need your FICO soon, consider paying for your gifts full price.

Georgia conforming loan limits for 2010 and 2011

For 2010, the conforming loan limits remain unchanged from last year.




One-Family Two-Family Three-Family Four-Family



Georgia (except Greene) $417,000 $533,850 $645,300 $801,950





Greene County $662,500 $848,100 $1,025,200 $1,274,050







Loan limits are set equal to 115% of local median house prices and they cannot exceed 150% of the standard limit. The standard limit is $625,500 for one-unit homes in the continental US.

We have loans for this counties

Providing financing for cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega, Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton, Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

What's Ahead For Mortgage Rates This Week : November 22, 2010

Mortgage markets worsened last week as the U.S. dollar gave up ground in currency markets, and inflation concerns mounted. In response to the events, conforming mortgage rates in Georgia rose for the third straight week.

Mortgage rates have now climbed by as much as half-percent since the start of the month, and Freddie Mac reports average loan fees to be higher, too.

The 7-month rally in rates may be nearing its end. The 30-year fixed rate mortgage is at a 4-month high after reaching an all-time low just 3 weeks ago.

The abrupt change in rates makes for an interesting study in expectations, and how they can influence a market.

Remember, inflation is bad for mortgage rates. Inflation devalues the dollar which, as a consequence, devalues repayments made to mortgage bond holders. As a result, when inflation is present, mortgage bonds tend to sell-off which causes mortgage rates to rise.

This is what's been happening these past 3 weeks. However, we're not in an inflationary environment. To the contrary:

1. The Federal Reserve has said inflation is too low to be economically healthy
2. Last week, the Cost of Living posted its lowest year-over-year gain in history

But mortgage rates are rising anyway. This is because global investors believe the Fed's most recent market intervention -- a $600 billion bond purchase program -- will later lead to inflation. Just on the expectation, markets are behaving like inflation is already here.

This week is holiday-shortened, and rates should remain volatile. There's a bevy of data including the Existing and New Home Sales reports, consumer confidence data, and the FOMC Minutes from the November 3 meeting.

If you haven't locked a mortgage rate, consider locking one today. Rates have farther to climb than the fall.

Mortgage Rates Still Rising. Is This The End Of The Refi Boom?

Rock-bottom mortgage rates may be gone for good.  This week's Freddie Mac Primary Mortgage Market Survey shows in numbers what Georgia rate shoppers have learned the hard way -- mortgage rates are spiking.

During the 7-day period ending November 18, the average 30-year, conforming fixed rate mortgage jumped to 4.39 percent, an increase of 0.22% from the week prior.

And it's not just rates that are soaring. The average number of points charged to consumers increased to 0.9 percent last week. For most of the year, that cost had been 0.7 percent.

One "point" is equal to 1 percent of your loan size.

With the sudden rise in mortgage rates, we have to question whether the Refi Boom is ending. Between April and early-November, conforming mortgage rates dropped more than a full percentage point and, during that time, a lot of Atlanta homeowners capitalized on the market. Refinance activity was strong; rates cut new lows each week.

Today, however, Wall Street sentiment is different. There's a growing concern for the future of the U.S. dollar, and that's making mortgage bonds less attractive to investors. As demand drops, so does the underlying bond's price which, in turn, causes mortgage rates to rise.

Buy-sell patterns like this are common. The speed at which they're changing is not.  Mortgage lenders can barely keep up with the volatility, issuing up to 4 separate rate sheets in a day.

Therefore, if you're shopping for mortgage rates, or wondering whether it's finally time to join the Refi Boom, the time to lock is now. Mortgage rates should remain volatile through the New Year, at least. At what level they'll be then, though, is anyone's guess.

Housing Starts Data Much Better Than The Headlines Would Have You Believe

Newspaper stories can be misleading sometimes -- especially with respect to real estate. We saw a terrific example of this Wednesday.

A "Housing Start" is a privately-owned home on which construction has started and, according to the Commerce Department's October 2010 data, Housing Starts data dropped by nearly 12 percent as compared to September.

The media jumped on the story, and its negative implications for the housing market overall.

A sampling of the headlines included:

• Housing Starts Plunge: Market's 'Pulse is Faint' (WSJ)
• Housing Starts Tumble (Reuters)
• Housing Starts Sink 11.7 Percent In October (NPR)

Although factually correct, the headlines are misleading. Yes, Housing Starts fell sharply in October, but if we strip out the volatile "5 or more units" portion of the data -- a grouping that includes apartment buildings and condominiums -- Housing Starts only fell 1 percent.

That's a big difference. Especially because most new construction buyers in Marietta and around the country don't purchase entire condo buildings. They buy single-family residences.

As an illustration, 84% of October's Housing Starts were single-family homes. The remaining starts were multi-units.

This is why the headlines don't tell the whole story. The market that matters most to buyers -- the single-family market -- gets completely glossed over. The Housing Starts reading wasn't nearly as awful as the papers would have you believe.  Furthermore, it's never mentioned that single-family Housing Permits climbed 1 percent last month, either.

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Therefore, we can expect December's starts to be higher, too.

Homebuilders Expect A Surge In New Home Sales

Homebuilder confidence is higher for the third straight month this month.

According to the National Association of Home Builders/Wells Fargo Housing Market Index, a combination of shrinking new home inventory plus higher-quality foot traffic is boosting builder optimism.

November's confidence reading of 16 is the highest since June 2010.The Housing Market Index is now above its 3-year trendline, too.

The purpose of the Housing Market Index is to measure "the pulse of the single-family housing market". The survey is sent to home builders in Georgia and around the country, asking them to report on their business.

The survey is 3 questions:

1. How are market conditions today?
2. How do market conditions look 6 months from now?
3. How is the prospective traffic of new buyers for new homes?

Responses are then collected, and seasonally-weighted.

It's no surprise that builder confidence is rising. The sales of new homes spiked in September, and the jobs market is moving in the right direction. Low mortgage rates help attract new buyers, too. Altogether, the outlook in the New Home market is as rosy as it's been in months.

The downside for new home buyers in Marietta , though, is that, because of their improved outlook, builders may be unwilling to offer free upgrades or other discounts to buyers. Certainly not with sales are expected to return to "federal tax credit" levels, anyway.

Therefore, if you're in the market for a new home, or expect to be "buying new" in early-2011, you may want to move up your time-frame. Not only are low mortgage rates not likely to last, but neither are low home prices.

Mortgage Rates Spike On Strong Retail Sales Data. Could 4 Percent Rates Be Done?

If consumer spending is a key to economic recovery, the nation is on its way.

Monday, the Census Bureau released national Retail Sales figures for October and, for the second straight month, the data surged past expectation. Last month's retail figures jumped 1.2 percent -- the largest monthly jump since March -- as total sales receipts climbed to a 2-year high.

Consumer confidence is rising, too. Though still below the long-term trend, confidence in the future up-ticked in October.

The current confidence reading is now double the low-point from February 2009.

It's no surprise that both Retail Sales and Consumer Confidence are higher. They correlate in a common-sense-type manner. When consumers are more confident in the economy, they're more likely to spend their money. This, in turn, leads to more purchases and rising retail receipts.

Unfortunately, for home buyers and rate shoppers in Atlanta , it also leads to rising mortgage rates.

Because consumer spending accounts for two-thirds of the economy, spending growth leads to economic growth. But it's been a lack of growth that's kept mortgage rates this low.

When the growth starts, the low rates end. It's why mortgage rates have added as much as 1/2 percent over the past 10 days. Consider the recent "good news":

• Retail Sales made a 2-year high in October
• Existing and New Home Sales showed big improvement in September
• Jobs growth returned in October

The days of 4 percent, 30-year fixed rate mortgages may be nearing its end.  If you're still floating a mortgage rate or thinking of buying or refinancing, consider the impact of rising rates on your budget.

The time to act may be sooner than you had planned.

What's Ahead For Mortgage Rates This Week : November 15, 2010

In a holiday-shortened trading week, mortgage markets tanked last week, casting doubt on whether the bond market's 7-month bull run will continue. Fears of inflation caused conforming mortgage rates to rise in Georgia.

Last week marked the first sizable mortgage rate increase over the course of 7 days since April.

The biggest reason why rates rose last week was because of concerns that the Federal Reserve's latest round of stimulus will devalue the U.S. dollar.

The Fed pledged an additional $600 billion to the bond markets two weeks ago and, to meet this obligation, the group will have to, quite literally, print new money.

It's Supply and Demand. With more dollars in circulation, every existing dollar is worth less.

It's also inflationary.

As the Fed's pledge ties back to mortgage rates, remember that mortgage bondholders are paid in U.S. dollars. So, if those dollars are expected to be worth less in the future, we would expect mortgage bond demand to fall. And that's exactly what happened last week -- investors rarely clamor for assets whose value drops over time.

The falling demand dropped down prices, and pushed up yields. Mortgage rates spiked.

This week, the trend could continue. There's a lot of inflation-signaling data on tap:

• Monday : Retail Sales
• Tuesday : Producer Price Index; Consumer Confidence; Housing Market Index
• Wednesday : Consumer Price Index; Housing Starts
• Thursday : Initial and Continuing Jobless Claims

Analysts are calling for lukewarm data this week; none of the releases is expected to show strong growth. If the analysts are wrong, look for rates to rise again.

Momentum is moving away from rate shoppers. If you've yet to lock in a rate, consider doing it now.

October 2010 : 5 States Account For Half Of The Nation's Foreclosure Activity

According to October data from foreclosure-tracking firm RealtyTrac, foreclosure filings topped 300,000 for the 20th straight month last month as 1 in every 389 U.S. homes received a foreclosure filing.

The generic term "foreclosure filing" is defined to include default notices, scheduled auctions, and bank repossessions. Versus the month prior, filings fell 4 percent, and as compared to October 2009, filings were essentially the same.

As usual, foreclosure density varied by region last month, with just 5 states accounting for close to half of the nation's repossessed homes.

• California : 14.8 percent of all bank repossessions
• Florida : 14.4 percent of all bank repossessions
• Michigan : 7.3 percent of all bank repossessions
• Texas : 6.6 percent of all bank repossessions
• Arizona : 6.0 percent of all bank repossessions

The other 45 states accounted for the remaining half.

It reminds us that, like everything else in real estate, foreclosures are local.

For today's Atlanta home buyers, though, foreclosures represent an interesting opportunity. 

Homes bought in various stages of foreclosure are often less expensive than other, non-foreclosure homes and it's one of the reasons why distressed home sales now represent 35 percent of all home resales.  But don't confuse less expensive for less costly.  Foreclosed homes may also be in various stages of disrepair. Getting them into living condition can be expensive.

Your best real estate "deal", therefore, may be that non-distressed home that's in sound, move-in ready condition.

If you're buying foreclosures -- or even just thinking about it -- make sure you talk with a real estate agent first. Buying distressed property is different from the "typical" home purchase. You'll want somebody experienced in your corner.

Fed Survey : Mortgage Guidelines Tighten Further, Freeze Out Would-Be Refinancers

It's getting tougher to get approved for a mortgage. Still.

In its quarterly survey of senior loan officers around the country, the Federal Reserve asked whether "prime" residential mortgage guidelines" have tightened in the prior 3 months.

A "prime" borrower typically carries a well-documented credit history with high credit scores, has a low debt-to-income ratio, and uses a traditional fixed-rate or adjustable-rate mortgage.

For the period July-September 2010, 52 of 54 responding loan officers admitted to tightening their prime guidelines, or leaving them "basically unchanged".

Just 4% of banks loosened their lending standards.

If you've applied for a home loan lately -- for either purchase or refinance -- you've likely experienced the effects of the last 4 years. Because of delinquencies and defaults, today's mortgage underwriters are forced to scrutinize income, assets and credit scores, among other facets of an home loan application.

Mortgage applicants in Marietta have higher hurdles to clear:

• Minimum credit scores are higher versus last year
• Downpayment/equity requirements are larger versus last year
• Debt-to-Income ratios must be lower versus last year

In other words, although mortgage rates are the lowest they've been in history, qualification standards are not.  Minimum eligibility requirements are tougher, and appear to be toughening still.

If you're among the many people wondering if now is the right time to join the Refinance Boom, or to buy a home, consider that, while mortgage rates may fall further, eligibility standards may not.

Low mortgage rates don't matter if you can't qualify for them