Georgia Takes Top Foreclosure Spot For First Time Since 2006

According to foreclosure data firm RealtyTrac, the number of foreclosure filings nationwide rose 9 percent in May as compared to April 2012. Filing topped 200,000 units for the first time in 3 months.

The term "foreclosure filing" is a catch-all term comprising default notices, scheduled auctions, and bank repossessions. On average, 1 in every 639 U.S. homes receiving a foreclosure filing in May.

As in most months, foreclosure activity was concentrated by state. Just 6 states accounted for more than half of the nation's total filings.

Those six states were :

1. California : 13.6% of all repossessions
2. Florida : 11.0% of all repossessions
3. Georgia : 9.8% of all repossessions
4. Illinois : 6.6% of all repossessions
5. Michigan : 6.5% of all repossessions
6. Arizona : 6.3% of all repossessions

An interesting note, though, is that for the first time since February 2006, Georgia was the country's most foreclosure-heavy state, displacing Nevada, which has dominated the foreclosure landscape for the last 5 years.

1 in 300 Georgia homes received a foreclosure filing in May. The national average last month was 1 in 639 homes.

At the other end of the foreclosure spectrum is Vermont. There was just 1 foreclosure filing for every 15,539 homes in The Green Mountain State last month.

Meanwhile, distressed homes remain in high demand with today's home buyers, accounting for 28 percent of April's overall existing home sales based on data from the National Association of REALTORS®. However, if your home purchase plans call for buying a foreclosed or bank-owned home, make sure you do your research first.

Buying bank-owned property is a different process as compared to buying a non-distressed home. The purchase contracts are different, the buyer-seller negotiations are different, and the homes are sometimes sold with defects. This can make it difficult to get a mortgage -- or even impossible.

Before buying "distressed", therefore, be sure to with a real estate agent. It's good to have an experienced agent on your side to coach you through the process.

31 States Represented In June's Improving Market Index

The number of U.S. housing markets showing "measurable and sustained growth" slipped by 20 in June, according to the National Association of Homebuilders.

The Improving Market Index is meant to identify housing markets in which economic growth is occurring as a whole -- not just in the real estate space.

By using three separate, independently-collected data series, each tied to local economic conditions, the Improving Market Index takes a broader view of the housing market than other housing market indicators -- the Case-Shiller Index, for example -- which are often singularly tied to housing contracts.

The Improving Market Index tracks three distinct data series :

1. From the Bureau of Labor Statistics : Employment statistics
2. From Freddie Mac : Home price growth
3. From the Census Bureau : Single-family housing growth

A given metropolitan area is categorized as "improving" by the National Association of Homebuilders if all three data series indicate growth at least six months after that area's most recent economic trough.

In other words, the Improving Market Index looks past head-fakes of recovery, instead in search of long-term, sustainable growth.

This is one reason why its list of included cities is so fluid. It's difficult for a metropolitan area to meet the Improving Market Index's inclusion requirements month-after-month in a post-recession economy.

The Improving Market Index dropped to 80 in June, says the home builder trade group.

The list includes 28 new entrants, with forty-eight markets removed as compared to May. 31 states are represented nationwide.

For home buyers in California , the Improving Markets Index is a non-actionable report but it does do a good job of highlighting the local nature of real estate. For example, Columbus, Indiana was added as an Improving Market in June. Yet, Indianapolis, Indiana -- located just 46 miles away -- was downgraded from the same list. 

Economies vary by locale.

The complete Improving Markets Index is available for download at the NAHB website. For a better gauge of what's happening on the local level , though, talk to a local real estate agent.

Before Moving, Check Your New Cost Of Living Estimates

With home values slow to rise and mortgage rates at all-time lows, there's never been a more affordable time to own a home.

However, there is more to the cost of living than just a mortgage payment. There's the cost of groceries, gasoline and routine medical care, too.

Not surprisingly, where we live affects our costs.

Big cities are often more expensive in which to live, for example, and local tax laws influence daily costs, too. 

For home buyers moving across state borders, therefore -- or even for those moving long distances intra-state -- it's important to know the relative costs in your new hometown as compared to your current one. Your household cash flow depends on it. You can't know your budget for a home if you don't know what life in a new town will cost you.

Enter Bankrate.com's Cost of Living Comparison Calculator.

In comparing the costs of 60 mundane, everyday items, the Cost of Living Comparison calculator can show you how common costs in your current home town compare to costs in your soon-to-be new home town.

The calculator asks for just three inputs -- (1) In what city do you live now, (2) To what city are you moving, and (3) What is your current salary -- then uses that information to produce a detailed cost comparison.

Some of the Cost of Living items compared include :

• Ground beef costs
• Veterinary services costs
• Dozen egg costs
• Doctor visit costs
• Hair care costs

The calculator also includes local mortgage rate differences to help plan for housing, and accounts for median home prices, too.

The online Cost of Living calculator is based on data from the ACCRA. On the ACCRA website, a similar cost comparison report sells for $5. At Bankrate.com, you can get the data for free.

Mortgage Payments Fall To All-Time Lows

It's a money-saving time to be a home buyer. Historically, mortgage rates of all types -- conventional, FHA, VA and USDA -- have never been lower and low mortgage rates make for low monthly payments. 

According to Freddie Mac's weekly mortgage rate survey, the average 30-year fixed rate mortgage fell to 3.67% nationwide last week for borrowers willing to pay 0.7 discount points at closing, plus a full set of closing costs. 0.7 discount points is a one-time closing cost equal to 0.7 percent of your loan size, or $700 per $100,000 borrowed.

Today's mortgage rates are a bargain as compared to just 1 year ago.

In early-June 2011, the average 30-year fixed rate mortgage nationwide was higher by 88 basis points, or 0.88%. If you are among the many U.S. homeowners who bought or refinanced a home around that time, refinancing to today's mortgage rates could save you 10% or more on your payment.  

Home buyers have measurably more buying power, too.

Here is how mortgage payments on a typical 30-year fixed rate mortgage have changed in 12 months :

• June 2011 : $509.66 principal + interest per $100,000 borrowed
• June 2012 : $458.59 principal + interest per $100,000 borrowed

Setting the math to a real-life example, a homeowner whose $350,000, 30-year fixed rate mortgage dates to last June would recognize monthly savings of at least $179 per month just by refinancing into a new 30-year fixed rate mortgage at today's current levels. That's more than $2,145 in payment savings per year.

Even after accounting for the required loan discount points and closing costs, the "break-even point" on a refinance like that can come quickly.

Mortgage rates have been dropping but there's no promise they'll fall forever. Once rates reverse higher, they're expected to rise sharply. Therefore, if you're planning to buy a home or refinance one in California , consider locking in a mortgage rate while mortgage rates are low.

The market looks good for that today.

How To Keep A Clean Refrigerator

Do you clean your refrigerator regularly, or only after you've run out of space? If your answer is the latter, your refrigerator may be harboring dangerous bacteria that can make you, your family, and your house guests ill.

Refrigerators should be cleaned monthly, inside and out, ideally. The process involves removing all foods, cleaning all shelves, and wiping down drawers. Spoiled food is removed and old containers reclaimed.

The process takes 20 minutes. Here's how to do it.

First, prepare your cleaning stations, including filling a sink with soapy water, and having drying towels handy. Complete this step before you start to remove food from the refrigerator. This limits the amount of time that food has available to reach room temperature.

Next, remove all food from the appliance. Throw out old food past its expiration, and leftovers which have been in containers for more than a few days. Check dairy products for expiration dates -- especially cheeses and creams. Toss fruits and vegetables that have spoiled. Wipe down condiment jars and bottles with a damp towel.

Next, with the refrigerator empty, remove all shelves and drawers and wash them in the water-filled sink. Scrub to remove any caked-on foods and spills. Rinse off the soapy water and dry the part on your drying towels.

Then, while the shelves and drawers are drying, using a mixture of baking soda and water, wipe down the interior surfaces of your appliance. The mixture should be roughly 2 tablespoons of baking soda for every 1 gallon of water. Wipe the mixture off with a clean towel.

Lastly, move the shelves and drawers back into the refrigerator and replace all of the food that's "good".

Refrigerators can be a dirty place. We rarely wash our hands before handling food in a refrigerator and that can contribute to a bacteria-heavy environment. A good cleaning, though, can keep our foods -- and our home -- healthy.

Clean your refrigerator regularly.

FHA To Change Its Mortgage Insurance Premium Schedule Monday, June 11, 2012

Beginning Monday, June 11, the FHA is changing its mortgage insurance premium schedule for the second time this year.

Some FHA mortgage applicants will pay lower mortgage insurance premiums going forward. Others will pay more. The new premiums apply to all FHA mortgages, both purchase and refinance.

The MIP update will be the 5th time in four years that the FHA has changed its mortgage insurance premium schedule.

FHA-backed homeowners who have not refinanced within the last 3 years will benefit from the new MIP. This is because, beginning with all FHA Case Numbers assigned on, or after, June 11, 2012, homeowners whose current FHA mortgage pre-dates June 1, 2009 will be entitled to dramatically reduced annual mortgage insurance premiums and almost zero upfront MIP via the FHA Streamline Refinance program.

Whereas new FHA applicants may pay up to 1.25% per year for annual mortgage insurance plus 175 basis points at closing for upfront MIP, the "grandfathered" FHA applicants will pay just 0.55% per year for mortgage insurance and 1 basis point at closing.

Assuming an FHA loan size of $200,000, the savings are large :

• New FHA applicant : $208 per month for annual MIP; $3,500 due at closing for upfront MIP.
• Pre-June 2009 FHA applicant : $92 per month for annual MIP; $20 due at closing for upfront MIP.

The premiums apply to all FHA mortgage applicants, regardless of loan product or term. For example, 15-year FHA mortgage will follow the same mortgage insurance premium schedule as a 30-year FHA mortgages.

Another class of FHA-backed homeowners won't get so lucky. For homeowners in high-cost areas whose mortgages are between $625,500 and the local FHA loan limit, annual mortgage insurance premiums will be raised by 0.25% for all 15-year and 30-year loan terms.

For loan sizes above $625,500, the new annual FHA mortgage insurance premiums are as follows :

• Loan term of 15 years or fewer, loan-to-value of 90% or less : 0.35% per year
• Loan term of 15 years or fewer, loan-to-value greater than 90% : 0.60% per year
• Loan term of more than 15 years, loan-to-value of 95% or less : 1.45% per year
• Loan term of more than 15 years, loan-to-value greater than 95% : 1.50% per year

FHA-backed homeowners with loan terms of 15 years or fewer, and with loan-to-values below 78%, are exempt from annual MIP. Upfront MIP payments, however, remain mandatory.

The FHA continues to tinker with its mortgage insurance premiums, attempting to strike a balance between affordability for its homeowners and solvency for its program. Experts expect the FHA to change its premiums again. And, when it does, it's likely that premiums will rise.

If your FHA mortgage will be for more than $625,000, and you plan to make a purchase or refinance application soon, it's best to get your FHA Case Number prior to Monday, June 11. Otherwise, you'll pay higher annual MIP.

Against a $700,000 mortgage, the extra 0.25% in MIP per year will add $1,750 to your annual housing payment.

Simple Real Estate Definitions : Home Inspection

When you preview homes as a home buyer, you can get a good feel for the home's visible traits -- its finishes, its room counts, and its landscaping, for example. What you can't get a feel for, though, is the home's "bones".

It's for this reason that real estate professionals recommend that you have a property formally inspected immediately after going into contract for it.

A home inspection is a thorough, top-to-bottom check-up of a property's structure and systems. It is not the same as a home appraisal, which is a valuation of the property. By contrast, home inspections are an objective report on a home's physical condition.

Home inspections are performed by home inspectors who will typically do the following :

• Check heating and cooling systems for leaks and efficiency
• Check electrical systems for safety and soundness of design
• Check plumbing systems for venting, distribution, and drainage

In addition, a home inspector will review a home's roofing system; its doors, windows and garages; plus, any attic spaces and basements, where appropriate.

A home inspection may also uncover out-of-code electrical work that municipalities required to be fixed by law.

Meanwhile, it's not just home buyers who can order inspections. Sellers can order them, too.

One recommended tactic is for a home seller to have the home inspected prior to listing for sale so that all required repairs can be made in advance of showing the home. This can speed up and simplify the sales process, and may help your home sell at a higher price. Buyers often prefer homes in "move-in" ready condition.

A thorough home inspection can take up to 6 hours to complete, depending on the size of the home.

U.S. Posts Its 20th Straight Month Of Job Growth

For the second straight year, the jobs market looks to be slowing into the summer.

Last Friday, in its monthly Non-Farm Payrolls report for May 2012, the Bureau of Labor Statistics reported 69,000 net new jobs created, plus a one-tick rise in the national Unemployment Rate to 8.2%.

2012 is shaping up like 2011, it appears.

Last year, between May and August, the jobs market was decidedly worse as compared to the rest of the year, adding just 80,000 jobs on average per month as compared to 190,000 new jobs created on average during each of the other 8 months.

This year, a similar slowdown may be in store. 

Although the May jobs report marks the 20th consecutive month during which the U.S. economy added new jobs, the reported figure fell well short of analyst expectations, which called for 150,000 net new jobs last month.

In addition, it was found that the previously-reported tallies for new jobs created in March and April were overstated by a total of forty-seven thousand jobs. This lowered the overall net new jobs created last month to 22,000.

Mortgage rates are falling on the news.

Since the jobs report's release, 30-year fixed rate mortgage rates have dropped below Freddie Mac's reported 3.75% mortgage rate for borrowers willing to pay 0.7 discount points plus closing costs; and, the 15-year fixed rate mortgage has dropped farther below 3.00%.

The weaker-than-expected data has moved Wall Street investors away from stock markets in favor of the relative safety of bond markets, a market which includes the one for mortgage-backed bonds. When mortgage-backed bonds are in demand like this, it helps to push down mortgage rates nationwide.

That's exactly what we're seeing.

Mortgage rates are expected to make new lows this week, in part, because of U.S. employment weakness. Should this year's jobs market rebound like in 2011, though, look for mortgage rates to climb back shortly.

How To Keep Your Home House Fly Free

As the calendar turns to June and the temperatures start to rise in California and nationwide, we begin to spot more bugs, insects and pests as compared to during the winter.

Hiring an exterminator is one way to limit the number of ground-based bugs in your home. For example, periodic treatments can help to keep ants, beetles and termites at bay.

For airborne pests, however, prevention can be more difficult.

House flies can be especially nagging. They often enter through open doors and windows, then buzz through kitchen and bedrooms, spreading germs and general annoyance.

If your home is battling house flies, the good news is that there are a number of chemical-free, environmentally-friendly ways to reduce or eliminate house flies; solutions that are safe for homes with children and pets.

First, make sure your screen doors and screened-in windows are all in working order. Tears, rips and holes should be repaired or replaced. This is often a house fly's easiest point of entry into your home.

Next, remember that house flies are attracted to surfaces with sugar or protein. Therefore, it's important to keep kitchen surfaces and non-carpeted floors clean because these are probable "hot spots" for a house fly. Clean once or multiple times per day, and try to use products containing orange, clove or lemon oil. These oils often repel flies.

Then, examine all trash cans. Lids should remain tightly closed and garbage bags should be changed frequently. Garbage is a breeding ground for house flies and, because flies can hatch from eggs in a matter of hours, the sooner your garbage is sealed and moved to a garage or outdoor dumpster, the better.

Lastly, consider placing 2-3 dozen cloves into an apple and leaving it in a room in which flies are bothersome. The smell of the cloves repels flies and, although it won't prevent flies from returning, the method is helpful for temporary fly relief.

Insurance Policies : Which Do You Need, Which Should You Skip?

Insurance is protection against unexpected expenses and insurance policies are available for nearly any scenario you can envision -- even your own ransom. But just because an insurance policy is available, that doesn't mean you should buy it.

Some insurance policies give you good bang for the buck. Others are plain wasteful.

In this 3-minute segment from NBC's The Today Show, you'll hear of several common insurance policies and their relative merits to people of California who purchase them.

For example, Americans will spend an estimated $450 million on pet insurance this year. Because of the policies' restrictions and deductibles, though, it's an insurance policy that rarely pays off. This is one reason why financial experts often recommend that you pass on purchasing pet insurance.

Within the segment, other reviewed insurance policies include :

• Mobile phone insurance
• Flight and travel insurance
• Extended warranties for electronics
• Umbrella policies
• Renters insurance

There's also discussion about home warranties, and why you should avoid policies that last longer than one year.

Insurance should be an important part of your overall financial plan. However, the key is to have the proper policies in place, with an appropriate amount of coverage. Review your policies annually and keep your coverage current.  

Pending Home Sales Slip In May

The housing market took a breather in April.

After forging past its benchmark value of 100 in March, April's Pending Home Sales Index dropped back to 95.5, its lowest reading of the year. The data suggests fewer home resales throughout California and nationwide in the months ahead.

A "pending home" is a home under contract to sell, but not yet closed. The Pending Home Sales Index is tracked and published monthly by the National Association of REALTORS®.

As a housing market indicator, the Pending Home Sales Index is fundamentally different from other housing metrics which often make headline news.

Unlike the Existing Home Sales report, for example; or the New Home Sales report, the Pending Home Sales Index is purported to be predictor of future housing market performance. It measures the number of homes newly under contract in a given month and, because we know that 80% of homes under contract close within 60 days, the Pending Home Sales Index can foreshadow what's next for housing.

Other housing market metrics report on events which have already occurred.

Based on April Pending Home Sales Index, therefore, buyers and sellers should expect to see a pull-back in closed home sales through May and June. However, like everything in real estate, home sales remain a local market.

Even by region, performance varied : 

• Northeast Region : +0.9% from March 2012
• Midwest Region : -0.3% from March 2012
• South Region : -6.8% from March 2012
• West Region : -12.0% from March 2012

Despite three regions posting losses, it's worth noting that, on an annual basis, all four regions showed gains, led by the Midwest at 23 percent. 

If you're shopping for homes right now, the Pending Home Sales Index suggests that the current market may be "soft", a scenario which can create ideal home-buying conditions. With mortgage rates low, home affordability has never been higher.

Foreclosures Fall To 5-Year Low

Foreclosures filings fell 5 percent between March and April of this year, and by 11 percent as compared to one year ago. The data comes from RealtyTrac. The foreclosure-tracking firm tallied fewer than 189,000 foreclosure-related actions last month -- the fewest number since July 2007.

Rapidly-declining foreclosure figures are another signal that the U.S. housing market may already be in recovery.

According to RealtyTrac's methodology, a "foreclosure filing" is any one of the following foreclosure-related events : (1) A default notice on a home; (2) A scheduled auction for a home; or, (3) A bank repossession of a home.

All three showed improvement in April :

• Default Notices were down 4% from March 2012
• Scheduled Auctions were down 4% from March 2012
• Bank Repossessions were down 7% from March 2012

Furthermore, April's bank repossessions figure is notable. With just 51,415 homes reclaimed by banks, last month's total represents a 26 percent drop from April 2011, and is the 18th consecutive month during which bank repossessions fell. This figure suggests that banks are seeking alternatives to foreclosure, including loan modifications and short sales, when appropriate.

Indeed, the National Association of REALTORS® reports that 11 percent of April's home resales were short sales.

Whether you're a first-time home buyer or an experienced one, homes in various stages of foreclosure can be alluring. They're readily available and often come cheap as compared to non-distressed properties. However, make sure to look beyond just the "list price". Foreclosed homes are often sold as-is. This means that the property could be run-down or rife with defects that render it uninhabitable and/or un-lendable.  

If you plan to buy a foreclosed property , therefore, engage an experienced real estate professional. You can learn a lot about how foreclosures work by doing research on the internet, but when it comes to writing contracts and checking homes for defects, you'll want an experienced agent on your side.

Save Energy For Summer : Flip Your Ceiling Fan Rotation

Memorial Day marks the unofficial start of summer and, in many parts of the country, weekend weather was indistinguishable from what one might expect in August.

Temperatures climbed into the 90s throughout the Southwest, South Central, Midwest and Southeast and even crossed 100 degrees in parts of Kansas.

For homeowners with ceiling fans, the change of season offers a timely reminder to change the direction in which ceiling fan blades rotate. Properly-rotating ceiling fan blades not only cool your home more efficiently, but can lower your energy bill, too.

Ceiling fans are meant to amplify your home's natural heating and cooling systems. Using the equivalent energy of a 100-watt light bulb, on a cool day, a ceiling fan will recirculate warmer air, making a room feel up to 6 degrees warmer.

On a warm day, a ceiling fan can reduce a room's effective temperature by 4 degrees. It accomplishes this by pushing colder air back into a room, creating a "windchill effect" on the skin. This is a far more economical way to regulate temperature as compared setting a home thermostat up or down by 4 degrees.

The key is to have the ceiling fan blades running in the proper direction.

• When your home's heating system is on, rotate fan blades clockwise
• When your home's cooling system is on, rotate fan blades counter-clockwise

For additional cost savings with a ceiling fan, remember to turn it off when you're not in the room. Ceiling fans don't cool the air; neither do they warm it. Rather, ceiling fans move air which gives the sensation of a room being cooler or warmer. With nobody in the room, there's no need to run the fan.

If your home is without ceiling fans, and you'd like to install one or many, the process is inexpensive and easy. There are videos online which walk you through the steps, or you can call a qualified electrician. Need an electricians name?  Call or email me -- I'm happy to offer a referral.

30-Year Fixed Rate Mortgage Rates Fall To 3.78% Nationwide

For the fifth consecutive week, conforming 30-year fixed rate mortgage rates have dropped to new all-time lows.

According to this week's Primary Mortgage Market Survey from Freddie Mac, "prime" mortgage applicants willing to pay 0.8 discount points plus closing costs can secure a mortgage rate of 3.78%, on average.

This is a small improvement in rate over last week when the average 30-year fixed rate mortgage rate was 3.79% with 0.7 discount points.

1 discount point is equal to 1 percent of your loan size.

Like everything in real estate, though, mortgage rates are local. Freddie Mac reports that the mortgage rates available to consumers varied by region.

• Northeast Region : 3.78% with 0.7 discount points 
• West Region : 3.74% with 0.9 discount points
• Southeast Region : 3.79% with 0.7 discount points
• North Central Region : 3.83% with 0.6 discount points
• Southwest Region : 3.81% with 0.7 discount points

North Central Region residents currently pay the lowest fees and get the highest rates. For residents of the West, it's the opposite. Everywhere, however,mortgage rates are down. As compared to one year ago, today's monthly carrying cost for a conforming, 30-year fixed rate mortgage is lower by $50 per $100,000 mortgaged, or $600 per year.

A $300,000 mortgage would save $1,800 annually.

Mortgage rates have been dropping because Wall Street remains concerned for the futures of Greece, Spain, Italy and the European Union. Several European nations are at-risk for a sovereign debt default and Greece remains a threat to leave the EU. To protect against potential loss, investors have been moving money away from risky holdings toward safer ones -- a class that includes U.S. mortgage-backed bonds.

As demand for the bonds rise, prices do, too. This leads mortgage rates lower and so long as economic uncertainty remains, mortgage rates are expected to stay low.

Low mortgage rates make this a good time to buy or refinance a home. Talk to your loan officer to review your mortgage options.

New Home Sales Rise For 7th Month Out Of 8

The April New Home Sales report suggests that the market for newly-built homes is as strong as the market for existing ones. 

According to the U.S. Census Bureau, the number of new homes sold rose 3.3 percent in April to a seasonally-adjusted, annualized 343,000 units sold -- its second-highest reading since April 2010.

April 2010 marked the last month of that year's federal home buyer tax credit program.

April's New Home Sales data also marks the 7th of eight consecutive months during which the number of new homes sold climbed nationwide, a streak unequaled in recent history. During this period, the supply of new homes for sale has dropped 13%. 

The complete new home inventory is down to 146,000 homes nationwide.

At the current pace of sales, home buyers across the county would exhaust the complete supply of newly-built homes in 5.1 months.

This, too, is a significant figure.

When home supplies fall below 6 months of inventory, it's widely believed to indicate a "seller's market" and there hasn't been more than 6 months of a new home supply since October 2011. This has placed upward pressure on new home prices and helps to explain why the average home sale price is up 9% from just 6 months ago.

Homes are selling, and they're rising in price -- a trend that today's buyers should expect to continue through the summer and fall months.

Record-low mortgage rates have moved home affordability to an all-time high with home builders now reporting the highest levels of buyer foot traffic at any time since 2007. As builder confidence grows, buyers can expect to find fewer "great deals" -- especially as demand for homes outpaces supply. 

If you're a home buyer in search of new construction, therefore, the best new construction "deals" of 2012 may be the ones you find today. By 2013, the deals may be gone.

Existing Home Sales Climb 3.4 Percent In April

Low mortgage rates are helping to make homes more affordable. It appears home buyers have taken notice.

According to the National Association of REALTORS®, Existing Home Sales rose 3.4% in April from the month prior, registering 4.62 million homes sold on a seasonally-adjusted, annualized basis.

An "existing home" is a home that's been previously occupied. April's sales volume represents a 10 percent jump from April of last year.

For buyers and sellers , the April Existing Home Sales report supports the notion that the housing market may be improving; that the "bottom" occurred sometime in late-2011. Home values have been rising in many U.S. markets and home builders now report the highest levels of foot traffic through models since 2007.

Demand for U.S. housing is growing.

It also helps that home affordability is at an all-time high. Not in recorded history have this many homes for sale been affordable to buyers earning a moderate household income, on a percentage basis. Additionally, there is now a larger stock of homes from which buyers can choose.  

In April, the number of homes for sale nationwide jumped 9.5 percent to 2.54 million -- the largest home resale inventory of the year.

At the current pace of sales, it would take 6.6 months for the complete home inventory to sell. Analysts consider a 6.0-month supply to be a market in balance. Anything less than a 6-month supply suggests a "buyer's market".

Home values peaked nationwide in April 2007. Since then, it's been an uneven recovery. Some markets came back quickly, while others did not. On a neighborhood-by-neighborhood basis, even, there's signifcant variance in how home values have fared.

In other words, although the April Existing Home Sales report indicates housing strength nationally, it's the local data that matters most to today's buyers and sellers. To get real-time real estate data for a particular street or area, talk with a local real estate agent.

Home Affordability Reaches New High In Q1 2012

Falling mortgage rates and stagnant home prices are making a positive effect on home affordability nationwide. Never before in recorded history have so many homes been affordable to households earning a moderate annual income.

Last week, the National Association of Home Builders reported the Home Opportunity Index at 77.5 -- its highest reading of all-time. The index indicates that more than 3 of every 4 homes sold last quarter were affordable to households earning the national median income of $65,000.

Last quarter marks the 12th straight quarter -- dating back to 2009 -- in which the index surpassed 70. Prior to this run, the index had never crossed 70 even once.

That said, like most real estate statistics, the Home Affordability Index has a national purview. National data is of little value to homeowners in specific cities , or in specific neighborhoods.

Last quarter, home affordability varied by region.

In the Midwest, for example, affordability was highest. 7 of the top 10 most affordable markets nationwide were spread throughout Ohio, Michigan, Illinois and Indiana. The top two spots, however, went to an East Region town (Cumberland) and a Pacific Northwest Region city (Fairbanks, Alaska), respectively.

The top 5 most affordable cities for home buyers in Q1 2012 were:

1. Cumberland, MD (99.0%)
2. Fairbanks, AK (98.9%)
3. Wheeling, WV (97.0%)
4. Kokomo, IN (95.8%)
5. Indianapolis, IN (95.8%)

At #17, the Lakeland/Winter Haven, Florida area was the top-ranked South Region city last quarter.

By contrast, the Northeast Region and Southern California ranked among the least affordable housing markets -- again. Led by the New York-White Plains, NY-Wayne, NJ area, 8 of the 10 least affordable areas were in the Mid-Atlantic and California, and for the 16th consecutive quarter the New York metro area was ranked "Least Affordable".

Just 31.5 percent of homes were affordable to households earning the area median income there, up from 25.2 percent six months ago.

The rankings for all 225 metro areas are available for download on the NAHB website.

America's 10 Richest Counties

There are 3,033 counties in the United States. Which 10 are the richest in terms of median household income? Not surprisingly, those near major economic centers rank high.

In a study based on household income estimates from the Census Bureau's American Community Survey, Loudoun County, Virginia captures the number one spot in America's Richest Counties.

Loudoun County is a Washington, D.C. suburb and is home to Dulles International Airport, as well as a well-educated workforce.

The complete Top 10 list of America's Richest Counties :

1. Loudoun County, Virginia ($115,574)
2. Falls Church City, Virginia ($114,409)
3. Fairfax County, Virginia ($105,416)
4. Los Alamos County, New Mexico ($103,643)
5. Howard County, Maryland ($103,273)
6. Hunterdon County, New Jersey ($100,980)
7. Douglas County, Colorado ($99,198)
8. Fairfax City, Virginia ($97,900)
9. Somerset County, New Jersey ($97,440)
10. Morris County, New Jersey ($96,747)

As a region, it's estimated that 40% of the Washington, D.C. metro area economy can be attributed to federal spending. This helps explain why Falls Church City, Virginia; Fairfax County, Virginia; and Howard County, Maryland all scored high on the list. It's also why Los Alamos ranked 4 -- the largest employer in Los Alamos is the Los Alamos National Laboratory, one of the largest science and technology institutes in the world.

The New Jersey counties are popular commuter areas for homeowners who work in New York City.

As a home buyer , the wealth of particular area may matter to you, but it won't be the sole reason you purchase. You may have interest in a quality school district, or a vibrant nightlife, or a a high walkability factor, for example.

For more detailed statistics about the 10 counties at top or other local markets, be sure to ask your real estate agent. 

Is More Fed-Led Stimulus On Its Way?

The Federal Open Market Committee released its April 2012 meeting minutes this week, revealing a Federal Reserve in the ready in the event additional monetary stimulus is needed.

The Fed Minutes function much like the minutes from a business meeting; or, condominium association meeting, for example. It's a detailed review of the conversations and debates between FOMC members, and is typically published 3 weeks after a Federal Reserve meeting.  

The Fed Minutes is a follow-up statement on the FOMC's more well-known, post-meeting press release. It's also much more lengthy.

Whereas the April 25, 2012 press release totaled 444 words, the Fed Minutes spanned 6,618. 

Those extra words are important, too, because the detail offered within the Fed Minutes lends insight into how our nation's central bank views the U.S. economy, its strengths and weaknesses, and its threats.

From the Fed Minutes, some of the Fed's comments includes :

• On employment : Unemployment may remain elevated through 2014
• On housing : Tight underwriting is "holding down" the housing market
• On rates : The Fed Funds Rate should remain low until late-2014

There was also substantial talk about Europe and its role in the U.S. economy. Notably, U.S. financial institutions have been actively reducing their European exposure to contain damage in the event of a full-blown economic crisis abroad.

This has had the net effect of lowering mortgage rates in California. Mortgage bonds often benefit from economic uncertainty.

In addition, because several Fed members acknowledged a willingness to add new stimulus to the U.S. economy, mortgage markets are accounting for the possibility it could happen. It's unclear whether stimulus would be added after the Fed's next meeting, or at some point later in the year, or at all.

The FOMC has its next scheduled meeting June 19-20, 2012.

Single-Family Housing Starts Powers Ahead

The new construction housing market continues to improve.

One day after the National Association of Homebuilders reported a 5-year high in homebuilder confidence, the U.S. Census Bureau reports that single-family housing starts rose 2 percent for the second straight month last month.

In April, on a seasonally-adjusted, annualized basis, the government reports 492,000 single-family housing starts. A "housing start" is a home on which ground has broken.

In addition, March's single-family housing starts were revised higher. What was previously reported as a three percent loss was re-measured and changed to a 0.2% gain.

The April tally marks a six percent increase over the one-year moving average and, along with the March revision, suggests that the springtime housing market may have just been seasonal. 

In March, a number of reports suggested a housing retreat :

• Existing Home Sales slipped 3%
• New Home Sales slipped 7%
• Homebuilder Confidence fell 4 points

Since then, though, low mortgage rates and affordable home prices appear to have sustained the new construction market, which now appears poised for a strong 2012. 

As one mark of proof, active buyers of newly-built homes nationwide are scheduling "model home" showings at the fastest pace since 2007. The burst of foot traffic high has builders upping their sales expectations for the next 6 months.

A scenario like this would normally lead new home prices higher, but the pressure for prices to rise may be offset by the amount of new home supply coming online.

In addition to a rise in Housing Starts, the Census Bureau also reports that, in April, the number of Building Permits for single-family homes rose 2 percent to move to its second-highest level since March 2010 -- the month preceding the end of the 2010 federal Home buyer tax credit.

86 percent of homes break ground within one month of permit issuance.

It's unclear whether housing is on a steady path higher, but there's a growing body of evidence that suggests the market bottom has already passed.

Homebuilder Confidence Moves To 5-Year High

Homebuilder Confidence is on the rise once again.

After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.

The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below 50 indicate poor conditions.

The HMI has not been above 50 since April 2006.

The Housing Market Index itself is a composite reading as opposed to a straight-up homebuilder survey. The published HMI figure is a compilation of the results of three specific questionnaires sent to NAHB members monthly.

The survey questions are basic :

1. How are market conditions for the sale of new homes today?
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points; sales expectations for the next six months are up 3 points; and buyer foot traffic is up 5 points to its highest point since 2007.

With mortgage rates low and home prices suppressed, the market for new homes is gaining momentum, a conclusion supported by the New Home Sales report which shows rising sales volume and a shrinking new home inventory nationwide.

The basics of supply-and-demand portend higher new home prices later this year -- a potentially bad development for buyers of new homes in California and nationwide. With demand for new homes rising, builders may be less likely to make sale price concessions or to offer "upgrade packages" to buyers of new homes.

If you're shopping for new construction , therefore, consider moving up your time frame. Home affordability is high today. It may not be tomorrow.

Home Affordability Getting A Springtime Boost From Greece

Home affordability is receiving a boost from across the Atlantic Ocean this spring.

For the third time in as many years, a weakening Eurozone is pushing May mortgage rates to new lows throughout California and nationwide.

The story centers in Greece and begins in 2010.

2 years ago, it was uncovered that successive Greece governments had purposefully misreported the nation-state's economic statistics in order to meet European Union standards. The fraudulent data had permitted Greek governments to spend beyond their means while hiding deficits from EU auditors.

The realization that Greece was heavy in debt with little means to repay its creditors resulted in a massive bailout from the IMF and the rest of the Eurozone nations. The terms for Greece said that, in order to receive its €110 billion aid package, Greece would be required to enact strict spending controls.

This is known as "austerity" and the deal was met with outrage by the Greek public. There's been general social unrest ever since and, on May 6 of this year, Greece held a special "early election" to elect all 300 members to its legislature.

No party won majority in the elections.

7 different groups garnered seats in the parliament last week with anti-austerity groups faring well. It's spurred concern that Greece will end its bid for fiscal restraint, and that Greece may choose to leave the 17-nation Eurozone.

The uncertainty surrounding Greece is helping U.S. mortgage rates to make new lows. As concerns mount for the future of Greece -- and the Eurozone, in general -- global investors seek safer markets for their money.

The U.S. mortgage-backed bond market is one such market.

With the implied backing of the U.S. government, mortgage-backed bonds are viewed as nearly risk-less and investors clamor for safety of principal during uncertain times. The boost in demand drives bond prices up and bond yields down, resulting in lower mortgage rates for home buyers and refinancing households.

So long as Greece struggles to form its government and flirts with a sovereign debt default, mortgage rates should continue to face downward pressure. U.S. rates may not fall week after week, but analysts expect any rise in rates to be muted.

How To Seal A Granite Countertop

Among homeowners, granite countertops remain a popular kitchen and bathroom finishing choice. Granite boasts a combination of natural beauty and durability that's unmatched among most commercial options.

But different from many other countertops choices, granite is a natural material; mined from the Earth. It is porous and highly absorbent.

To protect the granite in your home, therefore, and to ensure its quality over time, you'll want to seal your countertops at least once annually. A proper granite sealing will prevent stains and damage that can ruin your countertops' appearances.

Sealing your granite countertops is a simple job, but one that requires a little bit elbow grease.

First, you should make sure your granite is actually ready to be re-sealed. To do this, soak a white cotton cloth in water and leave it on the corner of your countertop for a 10 minutes.  Lift the towel and check whether the area under the towel is discolored, or dark. This will indicate that your granite is absorbing liquid and needs sealing.

If the area is not disclored, your granite is already sufficiently sealed.

If your countertops do need to be sealed, here's how to do it :

1. With a spray cleaner, wipe down the entire surface and allow to dry
2. Using a clean white rag, apply granite sealer to the surface uniformly
3. Allow 30 minutes for the granite to absorb the sealer, or longer
4. When dry, re-apply a second coat of sealer

Depending on the thickness and quality of your home's granite, it may need to dry overnight so allow yourself the proper time to finish the job.

Once sealed, use preventative maintenance to keep your granite countertops looking great. Place coasters under beverages, hot plates under dishes and clean up spills immediately.

A well-cared for granite countertop will last for years.

Mortgage Rates Make New All-Time Lows (Again)

Conforming mortgage rates continue to drop.

For the second straight week, the 30-year fixed rate mortgage fell to a new, all-time low nationwide. According to Freddie Mac's weekly mortgage rate survey, the average 30-year fixed rate mortgage rate dropped 1 basis point to 3.83% this week for borrowers willing to pay 0.7 discount points plus a full set of closing costs.

The 15-year fixed rate mortgage also set a mortgage rate record, registering 3.05% with an accompanying 0.7 discount plus closing costs.

Discount points are a one-time, up-front closing cost, based on loan size. 0.7 discount points is equal to 0.7% of the borrowed amount. A home buyer opening a $200,000 mortgage and paying 0.7 discount points, therefore, would be subject to a one-time $1,400 fee paid at closing.

Borrowers wanting to avoid paying discount points can expect higher mortgage rates than Freddie Mac's reported national average.

Falling mortgage rates are nothing new throughout California. Since peaking in February 2011, mortgage rates of all types have been in steady decline. The 30-year fixed rate mortgage has shed 122 basis points since that date, falling from 5.05%; the 15-year fixed rate mortgage has shed 124 basis points, falling from 4.29%.

Low mortgage rates give today's home buyers additional purchasing power, stretching home affordability to new heights.

Low rates also help existing homeowners to lower monthly mortgage payments. For example, as compared to mortgage rates just 15 months ago, homeowners refinancing into today's 30-year fixed rate mortgage stand to save 13.4 percent on their respective mortgage payments. 

A comparison :

• February 2011 : $539.88 principal + interest per $100,000 borrowed
• May 2012 : $467.67 principal + interest per $100,000 borrowed

A homeowner with a $300,000 mortgage at February 2011 30-year fixed rate mortgage rates would save $2,600 annually with a refinance to this week's low rates. Even accounting for discount points and closing costs, the "break-even point" on savings like that comes relatively quickly.

Mortgage rates can't be predicted so there's no guarantee of low rates forever. If today's rates meet your budget, consider locking something in. Speak with your loan officer about your options.

8-Fold Increase In "Improving Markets" Since September

The economic recovery continues nationwide, but the recovery's an uneven one.

Some metropolitan areas are faring very well this year, posting measurable gains in both employment and housing. Other metropolitan areas, by contrast, are struggling.

To help identify those markets in which growth is occurring, the National Association of Homebuilders created the Improving Market Index, a metric analyzing three separate, independently-collected data series "indicative of improving economic health".

The IMI's three collected data series are :

1. Employment Growth (as published by the Bureau of Labor Statistics)
2. Home Price Growth (as published by Freddie Mac)
3. Single-Family Housing Growth (as published by the Census Bureau)

A metropolitan area is considered to be "improving" if all three indicators show growth at least six months after the respective area's most recent trough, or "bottoming out".

In May, there are exactly 100 U.S. markets that qualify for the NAHB's Improving Market Index, down from 101 last month but higher by more than 800% from the reading in September 2011, the index's inaugural release.

17 areas were added to the Improving Market Index list this month including Phoenix, Arizona; Ann Arbor, Michigan; and Bend, Oregon. 18 areas were removed from the May IMI.

83 metropolitan areas remained from April.

There is little actionable information in the Improving Markets Index but the report does a good job of highlighting how "real estate markets" can't be summarized on a national level and remain relevant to everyday home buyers and sellers across California and nationwide. For example, Fort Collins, Colorado is listed as an Improving Market. However, Greeley, Colorado -- located just 30 miles away -- was just downgraded from the same list. 

Home values and economies vary by region, by state, by city, by neighborhood, and even by street.

The complete Improving Markets Index can be viewed at the NAHB website but for the best read of what's happening in your neighborhood, talk to a local real estate agent.

With LIBOR Low, Don't Rush To Refinance Your ARM

Is your mortgage scheduled to adjust this season? You may want to let it. This year's ARM-holding homeowners in California are finding out that an adjusting mortgage may be the simplest way to get access to today's low mortgage rates -- without paying the closing costs.

Currently, conventional adjustable-rate mortgages are adjusting to near 3.00 percent.

If your home is financed via an adjustable-rate mortgage, you're likely cognizant of your loan's life-cycle. At first, your ARM's initial mortgage rate is agreed upon between you and your lender, a rate that both parties agree will remain in place from anywhere from one to 10 years, with periods of five and seven years being most common.

Then, after the initial "teaser rate" expires, the mortgage's mortgage rate adjusts according to a pre-determined formula -- one that's also agreed upon at closing. The loan is then subject to an identical mortgage rate adjustment every 12 months thereafter until the loan is paid in full.

The most common conforming mortgage adjustment formula is to add 2.25 percent to the then-current 12-month LIBOR rate.

Today's 12-month LIBOR is 1.05% so, as a real-life example, an adjustable-rate mortgage that's leaving its teaser rate period this week would adjust to 3.30%.

If you're a homeowner who took a 7-year ARM in 2005, or a 5-year ARM in 2007, your newly-adjusted mortgage rate should be roughly 2 percent lower than your initial teaser rate. On a $250,000 mortgage, a 2 percent mortgage rate reduction yields $298 in monthly savings.

Therefore, if you have an adjustable-rate mortgage that's due to reset, don't rush to refinance it. For at least one more year, you can benefit from low mortgage rates and low payments.

As for next year's adjustment, however, that's anyone's guess.

Reverse Mortgages : Pros And Cons

Despite several big-name banks pulling the product from their respective home loan offerings, reverse mortgages remain a popular mortgage choice among homeowners aged 62 or over.

A reverse mortgage is exactly what it sounds like -- a mortgage in reverse. Rather than borrow a fixed amount of money then pay that loan balance down to zero as with a "forward" mortgage, a reverse mortgage starts at a given loan balance and works its way up as scheduled payments are added to the existing loan balance.

This 4-minute piece from NBC's The Today Show highlights a few pros and cons of reverse mortgages, and the reasons why you may want to consider one, including :

• No mortgage payments are ever due on your home
• There is no credit check required for a reverse mortgage
• There is no income requirement to qualify for a reverse mortgage

There are some basic qualification standards for the reverse mortgage program including a requirement that all borrowers on title must be 62 years of age or older; and that the subject property be a primary residence. Loan fees can also be higher than with a conventional-type mortgage.

If you meet the qualification standards, though, with a reverse mortgage, you have flexibility in how your home equity is distributed to you. You can receive a lump-sum payment, elect for monthly installments over time, create a line of credit, or a combination of all three. 

Like all mortgages, reverse mortgages are complex instruments. That's one reason why all reverse mortgage borrowers are required to attend counseling -- the government wants you to be certain that you understand the nuances of the reverse mortgage program.

Your lender will want you to understand the program, too.

Small Repairs That Can Raise Your Sales Price

If you're actively preparing to list your home for sale, resist the temptation to make major home improvements. Nationwide, home improvement projects recoup just 58 cents on the dollar, says Remodeling Magazine.

Rather, for a better return on your time and money, focus on the minor projects instead. It's the smaller projects that tend to have a bigger, long-term payoff.

So, how do you determine which projects are the "smaller ones"? It's obvious when you think like a buyer.

Consider : Home buyers don't always notice when your home is in working order. In fact, they expect it to be that way. What they do notice, however, is when things are "broken". When a buyer sees torn screens in your windows or burnt out light bulbs, it makes him wonder what else in the home has not been cared for.

This is one reason why -- especially during warmer months -- it's sensible to hire an exterminator prior to selling your home. If a prospective buyer uncovers bugs in your bathroom, it can leave a lasting, negative impression -- one that won't likely lead to a purchase contrast.

So, with "small repairs" in mind, here are 5 simple projects that you can tackle in a weekend, and that will help your home show better. Each is low-cost and high-impact:

1. Repair or remove torn screen doors
2. Fix all leaky faucets and toilets
3. Touch up holes and cracks in paint, interior and exterior
4. Apply a lubricant to squeaky doors and cabinets
5. Get "clutter" into storage and physically out of the way

In addition, you'll want to pull weeds from your yard, seed any bare spots you find, and lay down fresh mulch, where appropriate.

You won't need to spend big bucks to get your home ready for sale but the time spent on repairs will have a pay-off in the end. Homes that show better often sell much faster, and at higher prices.

Planning For A Memorial Day Closing

Planning to close on your home at the end of May? Plan ahead. Memorial Day is coming and the holiday may delay your closing.

Memorial Day marks the unofficial start of summer and the 3-day Memorial Day weekend is a popular vacation time in real estate-related industries.

Real estate agents tend to take time off because fewer of their clients are actively home shopping on a holiday weekend; mortgage lenders are closed because banks don't operate on a federal holiday; and, title agents are often away from the office because the former two groups aren't working.

But what's supposed to be a 3-day weekend is actually a 4.5-day one. This is because many people leaving for a Memorial Day vacation will not go to work on the Friday before the holiday, and then getting back into the "work groove" on Tuesday can be a half-day affair.

Therefore, if you're under contract to buy a home , or to sell one; or if you have a refinance in progress that's expected to close at month-end, there are some steps you should take to get pro-active with your closing. If you're going to lose 4-and-a-half days at the end of the month, you'll want to try to make those days up while the month is still young.

Here are 3 quick tips to speed up your closing and approval.

First, get your homeowners insurance policy picked out. Do your comparison shopping, select an insurer, and then prepay your first year of insurance, effective your closing date. Pay by check and not credit card, if possible, to avoid harming your credit score.

Provide your proof of payment to your lender immediately.

Next, if you're using a Power of Attorney, have your documents signed by all interested parties and submit them to your lender for review. Don't assume that your attorney's Power of Attorney documents will be acceptable to a bank -- banks require specific verbiage. If the documents are rejected, make the requested fixes and resubmit.

Banks do not compromise on Power of Attorney letters.

And, lastly, if you're accepting gifts or using retirement funds for your downpayment, be sure to have your paperwork reviewed and on file with your lender as soon as possible. Do not wait to withdraw funds until just before closing, either. Have everything in the proper checking account at least one week in advance, and ready for your closing.

There are other steps you can take, too, to make sure your end-of-May closing goes smoothly and they all amount to "preparedness".

When you're asked for paperwork, provide it quickly. When you're asked to sign a document, sign it on the same day. When you're needed to attend a home inspection or an appraisal, do it during your first available opening.

Just leave as little as possible to the "last minute", and everything should go well.

Make A Mortgage Rate Plan Ahead Of The Jobs Report

Been shopping for a mortgage rate? You may want to lock something down. Tomorrow morning, mortgage rates are expected to change. Unfortunately, we don't know in which direction they'll move. 

It's a risky time for California home buyers to be without a locked mortgage rate.

The action begins at 8:30 A.M. ET Friday. This is when the government's Bureau of Labor Statistics releases its April Non-Farm Payrolls report.

The monthly Non-Farm Payrolls report is more commonly known as "the jobs report" and provides a sector-by-sector breakdown of the U.S. employment situation, including changes in the Unemployment Rate.

In March 2012, the government reported 120,000 net new jobs created -- half the number created during the month prior, and the third straight month of declining job creation. The Unemployment Rate fell one-tenth of one percent to 8.2%.

For April, economists expect to see 160,000 net new jobs created, and no change in the national Unemployment Rate.

Based on the accuracy of those predictions, mortgage rates are subject to change. If the actual number of jobs created in April exceeds economist expectations, mortgage rates should rise. Conversely, if the actual number of jobs created falls short, mortgage rates should drop.

Job growth's link to mortgage rates is straight-forward. Jobs are an economic growth engine and mortgage rates are based economic expectation. Therefore, as the number of people entering the U.S. workforce increases, so do Wall Street's growth projections for the economy. When that happens -- especially in a recovering economy such as this one -- mortgage rates tend to rise.

So, for today's rate shoppers, Friday's job report represents a risk. The economy has created jobs for 18 straight months, a winning streak that has added 2.9 million people to the U.S. workforce. If that winning streak continues and expectations are beat, mortgage rates are likely to rise off their all-time lows, harming home affordability.

Home Values Start The Year Strong

Home prices started the year on an upswing. 

According to the Federal Home Finance Agency's Home Price Index, home prices rose by a seasonally-adjusted 0.3 percent between January and February 2012. The index is up 0.4% over the past year, offering a counter-story to the Case-Shiller Index's assertion that home values are sinking.

Last week, Standard & Poor's Case-Shiller Index said home values had dropped more than 3 percent in the prior 12 months. 

As a home buyer or seller , data showing "rising home values" or "falling home values" may be of interest to you, but we can't forget that most home valuation trackers -- including both the government's Home Price Index and the private sector Case-Shiller Index -- have a severe, built-in flaw.

Both used "aged" data. Today, the calendar reads May. Yet, we're still discussing February's housing data.

Data that is two-plus months old is of little value to everyday buyers and sellers wanting to know the "right now" of housing. And, even then, characterizing the data as "two-plus months old" may be a stretch. This is because the home values used in the Home Price index and the Case-Shiller Index are collected from actual transactions, but at the time of closing.

Considering that most purchases require 45-60 days to close, we can know that when we look at the Home Price Index and Case-Shiller Index reports for February, what we're really seeing is a snapshot of the housing market as it existed two-plus month plus 60 days ago.

Data that's 5 months old is of little relevance to today's buyers and sellers. Today's market is driven by today's economics.

The Home Price Index is a useful gauge for economists and law-makers. It highlights long-term trends in housing which can be helpful in allocating resources to a particular project or policy. For home buyers and seller throughout California , though, it's much less useful. Real-time data is what matters to you.

For that, talk to a real estate professional.

Mortgage Guidelines Resume Tightening Nationwide

Despite an improving U.S. economy, the nation's banks remain cautious about what they will lend, and to whom.

Last quarter, by a margin of 3-to-2, more banks tightened residential mortgage lending standards for "prime borrowers" than did loosen them.

A "prime borrower" is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio. The insight comes from the Federal Reserve's quarterly survey of its member banks.

Last quarter, of the 54 responding banks :

• 0 banks tightened mortgage guidelines considerably
• 3 banks tightened mortgage guidelines somewhat
• 49 banks left guidelines basically unchanged
• 2 banks eased mortgage guidelines somewhat
• 0 banks eased mortgage guidelines considerably

By contrast, in the quarter prior, not a single surveyed bank reported tighter residential mortgage guidelines. The period from January-March was a step backwards, therefore, for the fledgling U.S. housing market.

Overall, getting approved for a mortgage is tougher than it used to be. Banks enforce higher minimum credit score standards; ask for larger downpayment/equity positions; and require higher monthly income relative to monthly debt obligations.

It's one reason why the homeownership rate is at its lowest point since 1997.

Another reason why homeownership rates may be down is that prospective home buyers believe the hurdles of today's mortgage approval process may be impassably high. That's untrue.

There are many U.S. homeowners and renters that were approved for a home loan last quarter -- prime borrowers or otherwise. Some had excellent credit, some had modest credit. Some had high income, some had moderate income. Many, however, took advantage of low-downpayment mortgage options such as the FHA's 3.5% downpayment program, and the VA's 100% mortgage program for military veterans.

Despite a general tightening in mortgage standards, loans are still available and banks remain eager to lend.

It is harder to get approved today as compared to 5 years ago, but for those that try and succeed, the reward is access to the lowest mortgage rates in a lifetime. Mortgage rates throughout California continue to push home affordability to all-time highs.

If you're in the market to buy a new a home or refinance one, your timing is excellent.

How To Clean Your Outdoor Gas Grill In Less Than 30 Minutes

Regardless of your hometown's climate, outdoor gas grill cooking can be a four-season endeavor. Just remembe to keep your grill clean.

According to Weber's annual GrillWatch Survey, less than 40% of grill owners clean their equipment with any bit of frequency, and 6 percent admit they've never cleaned their grill at all.

There are three main reasons to keep a clean grill. The first is that a clean, well-maintained grill will have a longer useful life than a dirty, sloppy one. Grills can be expensive and it's often less costly to maintain them than to replace them.

The second reason to keep a clean grill is for sanitary reasons. Over time -- especially when exposed to the elements -- a grill's finish can deteriorate and/or retained cooked foodstuffs. This can create a breeding ground for germs and disease.

And, lastly, a clean grill helps cooked foods taste better.

So, whether you've cleaned your equipment recently or never at all, it's always a good time to freshen up your grill. Here's how to do it, quickly :

1. Remove the grates. Soak them in soapy water. Scrub foodstuffs using a wire brush. Allow to dry.
2. Remove loose debris from bottom of grill.
3. Using soapy solution, scrub grill's surfaces, grill pans, and grease trays. Don't forget the lid.
4. Clean outside of grill with mild soap solution, treating rust areas with cooking oil.
5. Look for broken, cracked or faulty equipment, specifically burners and ignitors. Replace as necessary.

Then, as a last step, re-assemble your grill and turn its burners to high for 10 minutes. This will burn off excess water in the grill and help to sanitize it.

Cleaning a gas grill is a 20-30 minute process. The results, however, are long-lasting. 

Pending Home Sales Index Crosses The 100 Barrier

After a series of worse-than-expected data last month, the housing market appears to be back on track.

The Pending Home Sales Index posted 101.4 in March, a four percent gain from the month prior and the index's highest reading since April 2010 -- the last month of that year's federal home buyer tax credit.

A "pending home" is a home under contract to sell, but not yet closed. The Pending Home Sales Index is tracked and published by the National Association of REALTORS® monthly.

The March report marks the index's first 100-plus reading in nearly two years.

To home buyers and sellers throughout California , this is statistically significant because the Pending Home Sales Index is normalized to 100, a value corresponding to the average home contract activity in 2001, the index's first year of existence. 2001 was an historically-strong year for the housing market.

The March 2012 Pending Home Sales Index, therefore, puts current market activity on par with market activity from 2001.

You wouldn't know it from reading this week's papers, though. There have been stories about how the Case-Shiller Index put home values at new loans; and how the Existing Home Sales figures unexpectedly dropped off; and how the New Home Sales report was a laggard.

But this is why the Pending Home Sales Index can be so important.

What makes the Pending Home Sales Index different from those other data points is that the Pending Home Sales Index is a "forward-looking" housing market indicator.

Unlike most data which aims to tell us how the housing market performed at some point in the past, the Pending Home Sales Index attempts to tell us how the housing market will perform at some point in the future. 

80% of homes under contract close within 2 months. Many more close within months 3-4. Therefore, on the strength of the March Pending Home Sales Index, we should expect a strong April and May nationwide

If you're shopping for homes right now, consider taking advantage while the market remains somewhat soft. Mortgage rates are low and home prices are, too. It can make for a good home-buying conditions.

A Simple Explanation Of The Federal Reserve Statement (April 25, 2012)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent Wednesday.

For the fifth consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member, Richmond Federal Reserve President Jeffrey Lacker, dissented in the 9-1 vote.

The Fed Funds Rate has been near zero percent since December 2008. It is expected to remain near-zero through 2014, at least.

In its press release, the Federal Reserve noted that the U.S. economy has been "expanding moderately" since the FOMC's last meeting in March. Beyond the next few quarters, the Fed expects growth to "pick up gradually". 

This key phrase will likely be repeated by the press. It suggests that the economy is no longer contracting; instead moving along a path of slow, consistent expansion.  

In addition, the Fed acknowledged that "strains in global financial markets" continue to pose "significant downside risks" to long-term U.S. economic outlook. This is in reference to the sovereign debt concerns of Greece, Spain and Italy, and the potential for a broader European economic slowdown.

The Fed's statement included the following notes :

1. The housing sector remains "depressed"
2. Labor conditions have "improved in recent months"
3. Household spending has "continued to advance"

Also, with respect to inflation, the Fed said that the higher oil and gasoline prices from earlier this year will affect inflation "only temporarily", and that inflation rates will return to stable levels soon.

At its meeting, the Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs. The Fed re-affirmed its intentions to hold the Fed Funds Rate at "exceptionally low" levels through late-2014, and to buy mortgage-backed bonds in the open market.

Immediately following the FOMC's statement, mortgage markets improved slightly, pressuring mortgage rates lower nationwide.

The FOMC's next scheduled meeting is a two-day event slated for June 19-20, 2012.

New Home Sales Revised Higher In February; Slip 7% In March

Sales of new homes ticked lower in March, unexpectedly.

Based on Census Bureau data, the number of new, single-family homes sold in March slipped 7 percent from February -- the largest one-month drop in more than a year. 

On a seasonally-adjusted, annualized basis, buyers in California and nationwide purchased 328,000 newly-built homes last month. The decrease in sales from February to March can be attributed, in part, though, to a massive upward revision in February's figures.

Last month, the Census Bureau had reported 313,000 new home sales in February on a seasonally-adjusted, annualized basis. This month, those sales were re-measured to be 353,000 -- an increase of 13 percent.

January's sales were revised higher, too.

The long-term trend in the market for new homes remains "up". This is no more apparent than when we look at the available new home inventory.

At the close of March, just 144,000 new homes were available for purchase, down 2,000 from the month prior and representing the most sparse new home housing supply since at least 1993, the year that the Census Bureau starting tracking such data. 

At the current pace of sales, the new home housing stock would be sold out in 5.3 months. A six-month supply is believed to represent a market in balance.

For new home buyers , March's New Home Sales report does not represent a housing market pull-back. It may represent opportunity, however.

From October 2011 to February 2012, housing data was uniformly strong. Home sales were higher, home supplies were lower, and confidence was rising. In March, it was the reverse. This is normal because growth is rarely linear. 

In any market, it's a few steps forward and a single step back, and housing is likely showing a similar pattern. With mortgage rates still low and builder confidence down, it's a terrific time to shop new construction.

There are deals to be found for buyers who seek them out. 

The Fed Starts A 2-Day Meeting Today. Make A Strategy.

The Federal Open Market Committee begins a 2-day meeting today in the nation's capitol. It's the group's third of 8 scheduled meetings this year. Mortgage rates are expected to change upon the Fed's adjournment.

Led by Chairman Ben Bernanke, the FOMC is a 12-person, Federal Reserve sub-committee. The FOMC is the group within the Fed which votes on U.S. monetary policy. "Making monetary policy" can mean a lot of things, and the action for which the FOMC is most well-known is its setting of the Fed Funds Funds.

The Fed Funds Rate is the overnight interest rate at which banks borrow money from each other. It's one of many interest rates set by the Fed.

However, one series of interest rates not set by the Fed is mortgage rates. Instead, mortgage rates are based on the prices of mortgage-backed bonds and bonds are bought and sold on Wall Street.

There is little historical correlation between the Fed Funds Rate and the common, 30-year fixed rate mortgage rate.

As the chart at top shows, since 1990, the Fed Funds Rate and the 30-year fixed rate mortgage rate have followed different paths. Sometimes, they've moved in the same direction. Sometimes, they've moved in opposite directions. 

They've been separated by as much as 5.29 percent at times, and have been as near to each other as 0.52 percent.

Today, that spread is roughly 3.65 percent. It's expected to change beginning 12:30 PM ET Wednesday. That's when the FOMC will adjourn from its meeting and release its public statement to the markets.

The FOMC is expected to announce no change in the Fed Funds Rate, holding the benchmark rate within in its current target range of 0.000-0.250%. However, how mortgage rates respond will depend on the verbiage of the FOMC statement. 

In general, if the Fed acknowledges that the U.S. economy as in expansion; growing from job growth and consumer spending, mortgage rates are expected to rise. If the Fed shows concern about domestic and global economic growth, mortgage rates are expected to fall. 

Any time that mortgage markets are expected to move, a safe play is to stop shopping your rate and start locking it. Today may be one of those times.

America's 20 Best Small Towns

America is stuffed with world-class "big cities"; New York, San Francisco and Chicago make for three great examples. But beyond the biggest cities, there are some wonderful small towns, too.

Smithsonian.com highlights 20 of them on its website.

Focusing on cities with 25,000 residents or fewer, the publication ranked areas high in "culture"; towns with high concentrations of museums, public gardens, art galleries and other cultural assets including resident orchestras. 

The author states "big cities and grand institutions per se don't produce creative works; individuals do. And being reminded of that is fun".

The Top 10 Small Towns in America, as judged by Smithsonian.com :

1. Great Barrington, Massachusetts
2. Taos, New Mexico
3. Red Bank, New Jersey
4. Mill Valley, California
5. Gig Harbor, Washington
6. Durango, Colorado
7. Butler, Pennsylvania
8. Marfa, Texas
9. Naples, Florida
10. Staunton, Virginia

Other notable cities on the list include Princeton, New Jersey; Beckley City, West Virginia; and Siloam Springs, Arkansas.

The Smithsonian.com website provides an in-depth review of each of its twenty listed cities, including historical notes and quotes from key community members. It makes for good reading by local residents and visitors, alike.

Review the complete rankings online.