Loans For Underwater Homeowners : HARP 2.0 Now Available

The new, revamped HARP program is now available in WA and   nationwide. It was officially released Saturday, March 17, 2012 by Fannie Mae and Freddie Mac.

HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the conforming mortgage loan product meant for "underwater homeowners". Under the HARP program, homeowners in Spokane can get access to today's low mortgage rates despite having little or no equity whatsoever.

HARP is expected to reach up to 6 million U.S. homeowners who would otherwise be unable to refinance.

HARP is not a new program. It was originally launched in 2009. However, the program's first iteration reached fewer than 1 million U.S. households because loan risks were high for banks, and loan costs were high for consumers.

With HARP's re-release -- dubbed HARP 2.0 -- the government removed many of HARP's hurdles.

In order to qualify for HARP, homeowners must first meet 3 qualifying criteria. 

First, their current mortgage must be backed either Fannie Mae or Freddie Mac. Loans backed by the FHA or VA are ineligible, as are loans backed by private entities. This means jumbo loans and most loans from community banks cannot be refinanced via HARP.

• To check if your loan is Fannie Mae-backed, click here.
• To check if your loan is Freddie Mac-backed, click here.

The second qualification standard for HARP is that all loans to be refinanced must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. Mortgages securitized on, or after, June 1, 2009 are HARP-ineligible.

There are no exceptions to this rule.

And, lastly, the third HARP qualification standard is that the existing mortgage must be accompanied by a strong repayment history. Homeowners must have made the last 6 mortgage payments on-time, and may not have had more than one 30-day late within the last 12 months.

If the above three qualifiers are met, HARP applicants will find mortgage guidelines lenient overall :

• Refinancing into a fixed rate mortgage allows for unlimited loan-to-value
• The standard 7-year "waiting period" after a foreclosure is waived in full
• Except in rare cases, home appraisals aren't required for HARP

Furthermore, HARP mortgage rates are on par with non-HARP rates. This means that HARP applicants get access to the same mortgage rates and loan fees as non-HARP applicants. There's no "penalty" for using HARP.

To apply for HARP, check with your loan officer today.

How To Store Your Winter Clothes For The Summer Season

As the Spokane weather turns warmer and the days grow longer, it's time to pack away your winter clothes to make room for spring and summer things -- just make sure to store your cold-weather clothes properly.

They'll look better, wear longer, and will be ready to go when winter rolls around again next year.

Here's what to do.

First, you'll want to launder your winter clothes before you pack them up -- even if they were never worn and/or don't appear to be soiled. Clothes can sometimes have spots or stains that aren't readily visible. Use unscented detergents, and skip fabric softeners and other additives that could attract insects.

Take items that can't be washed to the dry cleaner.

Next, you'll put your clothes into storage containers. Ideally, use bags or boxes that won't degrade and will seal out dirt, dust, insects and moisture.

Fold clothing neatly before adding it to the container and pack "loosely", allowing air can circulate. Tuck a lavender or cedar sachet into each container to help repel bugs. Both lavender and cedar are safer for use than mothballs and they smell much better.

For bulky items such as coats, use padded hangers and cover the clothing with heavy plastic wardrobe bags. If you don't have padded hangers and don't want to buy them, drape wood hangers with folded towels to fill in the shoulders of your coats without stretching them.

Keep the storage boxes and hangers in a dry place, away from sunlight. Sunlight can fade your fabrics.

Then, make sure to clean your closets thoroughly before filling them with the next season's clothes. Dust the shelves and ceiling, wipe bars and flat surfaces, and give the floor a good vacuum.

Your closet will be clean and fresh and ready for the new season.

Foreclosure Volume Slated To Rise This Spring

After a series of months during which foreclosure volume was low, total filings have started to rise again, says RealtyTrac. 

In February, 21 states posted a year-over-year increase in monthly foreclosure filings, according to the national foreclosure-tracking firm. This is nearly twice as many states as compared to December 2011, marking the highest monthly reading since November 2010.

A "foreclosure filing" is defined to include any one of the following foreclosure-related events : (1) The serving of a default notice, (2) A scheduled home auction, or (3) A bank repossession.

Nationally, the number of foreclosure filings fell 2 percent from January. However, it's a trend that may reverse. Foreclosure volume is expected to rise over the next few months.

This is because the $25 billion mortgage servicer settlement provides a framework for servicers to execute necessary foreclosures, from notice-to-auction. Some analysts believe that foreclosure filings were artificially depressed in 2011 because of the absence of such guidance. 

Like all things in real estate, though, foreclosures remain local.

For example, nationally, there was one foreclosure for every 637 housing units. On a state-by-state basis, however, the results looked different.  

• Nevada : 1 foreclosure for every 278 housing units
• California : 1 foreclosure for every 283 housing units
• Arizona : 1 foreclosure for every 312 housing units
• Georgia : 1 foreclosure for every 331 housing units
• Florida : 1 foreclosure for every 341 housing units

Even on a city-by-city level, foreclosure concentration varied. Figures from several select cities include : 

• Atlanta : 1 foreclosure for every 244 housing units
• Chicago : 1 foreclosure for every 302 housing units
• New York : 1 foreclosure for every 3,439 housing units
• Seattle : 1 foreclosure for every 1,229 housing units
• Washington : 1 foreclosure for every 1,198 housing units

One reason why foreclosure concentration is worth tracking is because homes in various stage of foreclosure are often sold at deep discounts as compared to similar, non-distressed homes. It's no wonder foreclosed homes are in high demand among today's Spokane home buyers. 

However, if you plan to buy a foreclosure in WA , be sure to work with an experienced real estate agent. Foreclosed homes are often sold "as-is", and may be defective at best and uninhabitable at worst. It makes good sense to have an advocate on your side to help with contracts and inspections.

Mortgage Rates Climb Sharply After Retail Sales Report

The U.S. economy is expanding, fueled by a renewed consumer optimism and increased consumer spending.

As reported by the Census Bureau, Retail Sales in February, excluding cars and auto parts, rose 1 percent to $335 billion as 11 of 13 retail sectors showed improvement last month.

February markets the 19th time in twenty months that U.S. Retail Sales increased on a month-over-month basis.

Unfortunately, what's good for the economy may be bad for Spokane home buyers and mortgage rate shoppers. Home affordability is expected to worsen as the U.S. economy improves.

The connection between Retail Sales and home affordability is indirect, but noteworthy -- especially given today's broader market conditions.

First, let's talk about affordability.

Last week, the National Association of REALTORS® released its monthly Housing Affordability Index, showing that homes are more affordable to everyday home buyers than at any time in recorded history. For buyers with median earnings buying median-priced homes, monthly payments now comprise just 12.1% of the monthly household income.

The real estate trade group considers 25% to be the benchmark for home affordability. Today's payment levels are less than half of that.

The reasons why today's homes are so affordable are three-fold :

1. Home prices remain relatively low as compared to peak pricing
2. Fixed- and adjustable-rate mortgage rates remain near all-time lows
3. Average earnings are increasing nationwide

Rising Retail Sales, however, can derail the trend. This is because Retail Sales measures consumer spending and consumer spending accounts for roughly 70 percent of the U.S. economy. As the economy expands, the forces that combined to raise home affordability so high begin to wane. 

First, in a recovering economy, mortgage rates tend to rise and, throughout 2012 and 2013, home prices are expected do the same. Second, as average earnings increase, it can spur inflation which is bad for mortgage rates, too. 

Home affordability is at all-time highs today. But, in part because of February's Retail Sales data, we should not expect these levels to last. Mortgage rates are higher by 1/4 percent since the Retail Sales data was released -- roughly $16 per $100,000 borrowed -- and are expected to rise more throughout the spring home purchase season.

Retail Sales are up 6 percent from a year ago.

A Simple Explanation Of The Federal Reserve Statement (March 13, 2012)

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

For the fourth consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member 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 the U.S. economy has "expanded moderately" since the FOMC's January 2012 meeting, adding that growth is occurring despite "strains in the global financial markets" that pose "significant downside risks" to long-term outlooks.

The Federal Reserve now expects moderate economic expansion through the next few quarters and a gradual easing in the national Unemployment Rate.

The Fed also noted that :

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

With respect to inflation, the Fed said that rising oil and gasoline prices will "push up" inflation temporarily, but not over the long-term.

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 worsened slightly, pressuring mortgage rates higher in and around Spokane. 

The FOMC's next scheduled meeting is a two-day event slated for April 24-25, 2012.

The Fed Meets Today : Protecting Your Housing Payment

The Federal Open Market Committee meets today, its second of 8 scheduled meetings this year. As a home buyer or would-be refinancing household , get ready for changing mortgage rates.

The Federal Open Market Committee is the 12-person sub-committee within the Federal Reserve that votes on the nation's monetary policy. Led by Federal Reserve Chairman Ben Bernanke, the FOMC's most prominent role is as steward for the Fed Funds Rate.

The Fed has said repeatedly that it intends to keep the Fed Funds Rate near 0.000 for an "extended period of time", through 2014 at least.

Unfortunately, this doesn't mean that Spokane mortgage rates will remain low as well. Mortgage rates are not set by the Federal Open Market Committee. Mortgage rates are set by Wall Street.

As proof that the Fed Funds Rate is distinct from mortgage rates, consider that, since 2000, the difference between the Fed Funds Rate and the average, 30-year fixed rate mortgage rate has been as wide as 5.25% and as narrow at 0.50%.

If the Fed Funds Rate was tied to mortgage rates, the chart at right would be linear.

That said, the FOMC can influence mortgage rates. 

After its meetings, the FOMC issues a standard press release to the public which reflects the group's overall economic outlook. When the FOMC statement is generally "positive", mortgage rates tend to rise in response. This is because investors often assume more risk in an improving economy and this can harm bond market prices -- including those for mortgage-backed bonds.

Conversely, when the Fed is generally negative in its statement, mortgage rates can improve.

Since the FOMC's last meeting, there has been little about which to be negative with the U.S. economy. Housing and manufacturing are improving; employment is higher; and global markets are regaining their respective footing. The Fed may make note of it. Or, it may not.

Regardless, mortgage rates are expected to move so consider locking your mortgage rate ahead of today's 2:15 PM ET statement.

There too much risk in floating.

How To Remove Soap Scum From Shower Doors

Dirty shower doors can ruin an otherwise sparkling-clean bathroom. The soap scum that accumulates isn't just unsightly; it contains body oils and skin particles that provide for a perfect bacteria breeding ground.

Supermarket shelves in Spokane are filled with bathroom cleaners that promise to cut through soap scum, but the cleansers don't always work and those that do often contain harsh chemicals that can irritate your skin.

Cleaning shower doors can be more safe and more pleasant, then, when you use chemical-free household products, many of which you likely have in your kitchen already.

White vinegar makes an excellent soap scum remover, for example.

To remove soap scum from your shower doors using white vinegar, pour non-diluted white vinegar into a spray bottle, and then spray your shower doors until the soap-scummy sections are completely saturated. Let the vinegar sit for several minutes. This allows the white vinegar time begin breaking down the soap scum.

Spritz the surface again, if necessary, to keep the surface wet.

After the white vinegar has had some time to work, wipe the soap scum away with a non-scratching sponge.

If the soap scum is particularly stubborn, cutting through it completely may require a mild abrasive.

After letting the vinegar soak for several minutes, sprinkle baking powder on your sponge and remove the soap scum using a moderate amount of pressure and small circular motions. If your shower doors are textured, you may need to switch to a scrub brush to get into the crevasses.

Reapply baking soda and re-spritz the doors with vinegar as needed to remove the soap scum completely. Then, just rinse away the residue with hot water.

Give the shower floor a final rinse after the residue drains.

FHA Drops Upfront Mortgage Insurance Premium To 0.01% For Qualified Borrowers

The FHA is making more changes to its flagship FHA Streamline Refinance program.

Beginning mid-June 2012, certain current, FHA-backed homeowners will be able to refinance their existing FHA mortgage into a new one, without having to pay the government-backed group's new, costly mortgage insurance premium schedule.

Earlier this week, the FHA rolled out its new MIP schedule.

Beginning April 9, 2012, new FHA mortgages are subject to a 1.75% upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium of up to 1.25% for loan sizes up to, and including, $625,500; or 1.60% for loan sizes exceeding $625,500.

Upfront MIP is typically added to the loan size as a lump sum. Annual MIP is paid via 12 monthly installments. Both add to the long-term costs of homeownership.

However, the FHA's new MIP schedules will not apply to all FHA-backed homeowners equally. Homeowners whose FHA mortgages were endorsed prior to June 1, 2009 will benefit from a different, less costly MIP schedule.

For these homeowners in search of a streamline, the MIP schedule is as follows :

• Upfront MIP : 0.01% of the loan size
• Annual MIP : 0.55% of the loan size, with no adjuster for loan sizes over $625,500

The new schedule is detailed in FHA Mortgagee Letter 12-04 and it lowers the cost of FHA Streamline Refinancing for long-time, FHA-backed households in WA and nationwide to almost nothing.

As a real-life example, an FHA-backed homeowner whose $100,000 mortgage dates to 2008 could refinance via the FHA Streamline Refinance program and pay just $10 in upfront MIP, with a corresponding annual MIP payment of just $550, or $45.83 monthly. 

By comparison, every other FHA-backed homeowner with a $100,000 mortgage pays $1,750 in UFMIP and as much as $1,600 in annual MIP.

The new streamline refinance MIP schedule is in effect for FHA mortgage applications with case numbers assigned on, or after, June 11, 2012. It is not available for loan applications made prior to that date.

There are lots of dates and deadlines in the FHA's new streamline program. If you're too early -- or too late --  you could miss your optimal refinance window. Talk with your loan officer, therefore, and put a plan in place. You'll be glad to be prepared.  

Mortgage Rates Expected To Rise On A Strong Job Report

With home affordability at an all-time high, buoyed by the lowest mortgage rates ever, it's been a terrific time to buy or refinance a home using a mortgage.

The good times may not last, though, so today marks an ideal time to lock a mortgage rate. Friday brings risk. Here's why.

Since 2010, weak economic conditions have been a primary catalyst for low mortgage rates in WA. Over the last 12 months, though, manufacturing output has been rising, consumer spending has been climbing, and business investment has increasing.

In other words, the economy is improving. However, it's the jobs market that's believed to be the economic recovery keystone. When jobs come back, analysts say, so does the economy.

Assuming that's true, a recovery may already be well underway.

According to the Bureau of Labor Statistics, the U.S. jobs market has grown for 16 straight months now, adding 2.5 million net new jobs along the way. It's one reason why the February jobs report matters so much to housing. 

Rate shoppers would do well to pay attention.

Friday, at 8:30 AM ET, the government will release its Non-Farm Payrolls report for February. Wall Street expects the report to show 210,000 new jobs were created in February, a figure slightly higher than the rolling, 6-month average for job growth. This would be a positive economic indicator.

If the analysts are correct, mortgage rates are likely to rise on the news, harming home affordability.

Furthermore, affordability could be harmed by a lot if the number of net new jobs created exceeds the 210,000 tally expected. It's not a far-fetched scenario. Wall Street's "whispers" put the actual jobs figure somewhere between 250,000-300,000. A reading lije this would cause mortgage rates to spike and would add money to a prospective monthly mortgage payment.

If the idea of rising mortgage rates makes you nervous, consider taking your nerves out of the equation. Call your loan officer today. Lock your rate ahead of Friday's Non-Farm Payrolls release.

Are You Wasting $471 Per Month On Your Mortgage?

According to Freddie Mac's weekly mortgage rate survey, for 13 straight weeks, the average 30-year fixed rate mortgage has held below 4.000% for mortgage applicants willing to pay up to 0.8 discount points plus a full set of closing costs.

These are the lowest mortgage rates in history and now -- with a bevy of loan programs for the nation's 11 million "underwater homeowners" including HARP, the FHA Streamline Refinance, and the VA IRRRL -- millions of U.S. homeowners can exploit the current mortgage rate environment.

In this 4-minute clip from NBC's The Today Show, you'll learn about today's mortgage market and your refinancing opportunities in WA.

The video begins by telling us that 14 million credit-worthy Americans have yet to refinance their respective mortgages, and are leaving an average of $471 in "wasted savings" on the table each month which adds up to more than $5,600 annually.

That's a big number.

Some of the video's other key points include :

• Refinancing is "worth the hassle" when mortgage rates are as low as they are today
• The best rates are reserved for homeowners with the highest credit scores
• Comparison shop -- your current mortgage lender may not offer you the best rates

Furthermore, the video reveals the characteristics of the homeowner type most likely to benefit from a refinance. These traits include having with 20% equity in the home; have plans to live in the home for at least the next 36 months; carrying a current mortgage rate of 5 percent or higher.

It should also be added that, with a zero-closing-cost or low-closing-cost mortgage, even a small reduction in your mortgage rate can make a refinance worthwhile.

Mortgage rates are low but can't stay low forever. If you haven't participated in the Refi Boom, talk with a loan officer and review your mortgage options. You may be able to save hundreds of dollars per month with just modest closing costs. 

Home Affordability Reaches An All-Time High

Home affordability moved higher last quarter, boosted by the lowest mortgage rates in history, a rise in median income, and slow-to-recover home prices throughout WA and the country.

According to the National Association of Home Builders, the quarterly Home Opportunity Index read 75.9 in 2011's fourth quarter. More than 3 in 4 homes sold between October-December 2011, in other words, were affordable to households earning the national median income of $64,200.

Never in recorded history have U.S. homes been as affordable on a national level. Even on a regional and local level, affordability soared.

Affordability was highest in the Midwest; 7 of the 10 most affordable markets nationwide were in the nation's heartland. 

The Top 5 most affordable U.S. cities in Q4 2011 were:

1. Kokomo, IN (99.2% home affordability)
2. Fairbanks, AK (97.5% home affordability)
3. Cumberland, WV (96.9% home affordability)
4. Lima, OH (96.0% home affordability)
5. Rockford, IL (95.5% home affordability)

These are each considered "small markets". The most affordable "major market" was the Youngstown, Ohio area, where 95.1% of homes sold were affordable to households earning the area's local median income.

Not surprisingly, America's "least affordable cities" were regionally-concentrated, too, with 7 of the 10 least affordable markets located in either California or Texas.

San Francisco (#3), Santa Ana (#4), and Los Angeles (#5) led for the Golden State but, for the 15th consecutive quarter, the New York metropolitan area took "Least Affordable Market" honors.

Just 29 percent of homes in and around New York City were affordable to households earning the area's median income last quarter. It's a large jump from the quarter prior during which 23 percent of homes were affordable.

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

How To Keep A Stainless Steel Product Shining

With their sleek, modern look, over the past 10 years, stainless steel appliances have move from "hot trend" to commonplace.

However, as any Spokane homeowner with stainless steel appliances will tell you, to keep a stainless steel surface free from marks, drips and fingerprints can be a futile exercise. Streaks and smudges will happen -- they can't be avoiding.

There are tricks, however, for keeping your stainless "shining". You'll need a microfiber cloth and a small bowl, plus some dish detergent, and some WD-40 or furniture polish. 

First, start with a single teaspoon of dish detergent in a quart of hot tap water. Using the microfiber cloth to avoid scratching the appliance's surface, rub the mixture firmly in the direction of the steel's grain.

Rinse the surface with clean, hot water and dry it immediately.

If the smudge remains, as a second attempt, spray a little WD-40 or furniture polish on the surface of the stainless steel appliance and buff the mark away using the microfiber cloth.

Then, if the smudge still remains, apply a small amount of rubbing alcohol to the appliance surface and -- again with the microfiber cloth -- rub in the direction of the grain. This will remove the mark, but it will also dull the stainless steel's shine.

Therefore, to restore the appliance's luster, use a small amount of WD-40 or furniture polish, or buff the appliance with a drop of mineral oil. 

You may also use a commercial stainless steel cleaner to clean your home's appliance and these products work well. However, they're often thick with chemicals and can be more expensive than one of the do-it-yourself solutions presented above.

Sometimes, though, it takes a specialty product to get the job done.

FHA To Raise Mortgage Insurance Premiums April 1, 2012

Beginning April 1, 2012, the FHA is once again raising mortgage insurance premiums (MIP) on its newly-insured borrowers throughout Spokane and the country.

It's the FHA's fourth such increase in the last two years.

Beginning April 1, 2012, upfront mortgage insurance premiums will be higher by 75 basis points, or 0.75%; and annual mortgage insurance premiums will be higher by 10 basis points per year, or 0.10%.

For borrowers with a loan size of $200,000, the new MIP will add $1,500 in one-time loan costs, plus an on-going, annual $200 increase in total mortgage insurance premiums paid.

All new FHA loans are subject to the increase -- purchases and refinances.

The FHA is increasing its mortgage insurance premiums because, as an entity, the FHA is insuring a much larger percentage of the U.S. mortgage market than ever before. 

In 2006, the FHA insured 2 percent of all purchase-money mortgages. In 2011, that figure jumped to 18 percent. Unfortunately, as the FHA has insured more loans, it's number of loans in default have climbed, too, forcing the FHA to boost its reserves.

Beginning April 1, 2012, the new FHA annual mortgage insurance premium schedule is as follows :

• 15-year loan term, loan-to-value > 90% : 0.60% MIP per year
• 15-year loan term, loan-to-value <= 90% : 0.35% MIP per year
• 30-year loan term, loan-to-value > 95% : 1.25% MIP per year
• 30-year loan term, loan-to-value <= 95% : 1.20% MIP per year

In order to calculate what your FHA annual mortgage insurance premium would be on a monthly basis, multiply your beginning loan size by your insurance premium in the chart above, then divide by 12.

In addition, for loans over $625,500, beginning June 1, 2012, there is an additional 25 basis point increase to annual MIP.

To avoid paying the new FHA mortgage insurance premiums, start your FHA mortgage application today. Existing FHA-insured homeowners will not be affected by the change.

Mortgage insurance premiums will not rise for loans already made.

Case-Shiller Index Shows Home Values Rising In Detroit

Standard & Poors released its December 2011 Case-Shiller Index this week. The report is the most widely-cited, private-sector metric for the housing market. The index aims to measures change in home prices from month-to-month, and from year-to-year, in select U.S. cities and nationwide.

According to the report, between November and December 2011, home values fell within 18 of the Case-Shiller Index's 20 tracked markets; and through the 12 months leading up to December 2011, 19 of 20 tracked markets fell.

Only Detroit posted year-over-year gains, adding 0.50% since December 2010. 

Now, these statistics may look dire for the housing market, but it's important to remember that the Case-Shiller Index -- though widely-cited -- remains a flawed statistic for everyday buyers and sellers in Spokane. Rather, the monthly Case-Shiller Index is more appropriately applied by policy-makers and economists to macro-economic issues than by you and me for buy-or-sell decisions..

There are three ways in which Case-Shiller is flawed -- each tied to the way by which Case-Shiller Index is calculated.

The first reason why the Case-Shiller Index is flawed is that, although it's purported to be a "national" housing index, the index tracks just 20 cities nationwide. The United States, by comparison, houses more than 3,100 municipalities. The Case-Shiller Index is not a representative sample of the U.S. housing market.

And then, even within its tracked markets, Case-Shiller fails provide sufficient details to be useful.

Within each Case-Shiller Index city, there are innumerable "local markets", each with its own local economy. When home values are shown to be falling in Phoenix, for example, that doesn't mean that values are falling everywhere in Phoenix -- only in the aggregate. There are multiple neighborhoods in Phoenix in which home values improved in December.

The Case-Shiller Index doesn't capture that. 

As another reason to ignore the Case-Shiller Index, note that the Case-Shiller Index only includes home sale data for single-family, detached homes -- sales of condominiums and of multi-unit homes are specifically excluded. In some markets -- Chicago and New York, for example -- sales of these types can represent a large percentage of overall monthly sales.

Lastly, as a third reason to reduce the Case-Shiller Index's significance -- it's "old".

The Case-Shiller Index is published on a 60-day delay and includes sales contracts from even 60 days prior to that. In other words, the data used in this week's Case-Shiller Index dates back to October 2011.

Data from 5 months ago is of little relevance to buyers in WA today. Up-to-date and current information is what matters.

For actionable, real-time housing market data, therefore, look past the Case-Shiller Index. Look to your local real estate agent instead.

Pending Home Sales Rise To 22-Month High

The housing market appears headed for a strong spring season.

After a brief setback in December, the Pending Home Sales Index resumed its climb in January, posting a 2 percent gain over the month prior.

The data puts pressure on Spokane home buyers. This is because a "pending home" is a home that's under contract to sell, but has not yet sold. It's tracked by the National Association of REALTORS® and, among all housing statistics, it's the only one that's "forward-looking".

The Pending Home Sales Index is important to home buyers throughout WA because 80% of homes under contract to sell close within 60 days of contract. In this way, the Pending Home Sales Index forecasts the housing market 1-2 months into the future.

This is very different from how NAR's Existing Home Sales report works; or, how the Census Bureau's New Home Sales report works. These two metrics tell us what's already happened in housing.

By contrast, the Pending Home Sales Index tells us what's coming next.

January's Pending Home Sales Index reading lifts the monthly metric to its highest level since April 2010 -- the month during which the 2010 federal home buyer tax credit expired -- foreshadowing a strong housing market through March and April 2012, at least.

This should not be news, of course. The nation's home builders have said "foot traffic" is rising and home supplies are scarce nationwide. The only wild-card for housing is the high contract cancellation rate.

As compared to last January when just 9 percent of home purchase contracts "failed", this January saw 33 percent of contracts fail. High failure rates undermine the Pending Home Sales Index's viability as a forward-looking housing market indicator.

Despite contract failures, though, the combination of low mortgage rates and low home prices is enticing to today's home buyers. Expect home sales to climb in the coming weeks which will lead to a strong spring season for housing. 

New Home Supply Falls To 5.6 Months

The new construction market rolls on.

As foreshadowed by February's Homebuilder Confidence survey, which rose to a 4-year high, the Census Bureau reports new homes are selling more quickly than builders have built them, lowering the national "home supply" to levels not seen since 2006.

A "new home" is a home that is considered new construction and, at the current pace of sales, the nation's entire new home inventory of 151,000 homes would be sold in 5.6 months.

Anything less than 6.0-month supply is thought to connote a "sellers' market".

321,000 new homes were sold last month on a seasonally-adjusted, annualized basis. 7 of 10 new homes sold for less than $300,000. 

The South Region continues to account for the majority of new construction sales, posting a 59% market share in January. South Region sales were up 9 percent as compared to December. The other 3 regions turned in mixed results. 

• Northeast Region : +11.1% from December 2011 
• Midwest Region : -24.5% from December 2011 
• West Region : -10.6% from December 2011 

Unfortunately, the Census Bureau's New Home Sales data could be wrong.

Although New Home Sales were said to fall by about one percent nationally from December to January, the government's monthly report was footnoted with a ±16.6% margin of error. This means that the actual New Home Sales reading may have been as high as +15%, or as low as -18%. 

Because the range of values includes positive and negative values, the January New Home Sales data is of "zero confidence". However, that's not to say that it should be ignored. The aforementioned homebuilder confidence survey shows builders optimistic for the future, and a bevy of home sale data since October 2011 suggests a market in recovery.

If you're in the market for new construction in Spokane , therefore, consider going into contract sooner rather than later. Home prices remain low and mortgage rates do, too -- a terrific combination for today's buyers.

In a few months, the landscape may look different.

50 Creative Reuse Ideas For Your Home And Garden

"Creative Reuse" is the transformation of everyday items that would otherwise be thrown out into something useful. It's where being "green" and the arts can converge. 

In every home, there are literally hundreds of items that be reused and repurposed, including such disparate items as chipped coffee mugs, step ladders, and bubble wrap. After transformation, for example, these three items can become a simple storage container, a plant stand, and greenhouse insulation, respectively.

Real Simple made a list of "50 All-Time Favorite New Uses For Old Things". It's a list of Creative Reuse projects from which you're bound to find inspiration.

For example, the magazine suggests using an old Twister Mat as a children's party tablecloth; or an old eyeglasses case to hold nail care essentials such as clippers, files and scissors.

Some of Real Simple's other top ideas included :

• Distinguish your glass from other party-goers' glasses at a party with peel-on/peel-off window decals
• Protect counter tops from hot dishes with and old mousepad-turned-trivet
• Eliminate travel bulk. Carry non-prescription medicines in an old contact lens case.
• Use Play-Doh as a candle or sparkler holder
• Pour pancake batter into an old ketchup bottle for no-mess cooking

With Creative Reuse, you're limited only by your imagination and, even then, Google can be a terrific project resource.

Check the Real Simple list for 50 great ideas.

Federal Reserve Wary Of European Spillover

The Federal Reserve has released the minutes from its 2-day meeting January 24-25, 2012.

The Fed Minutes is a summary of the conversations and debates that shape our nation's monetary policy. It receives less attention than the Fed's more well-known, post-meeting press release, but the Fed Minutes is every bit as important.

To rate shoppers in Spokane , for example, the Fed Minutes can provide clues about whether mortgage rates will generally rise or fall in the coming months.

The most recent Fed Minutes reveals a central bank divided on the future of the U.S. economy. The minutes show some Fed members in favor of new, immediate market stimulus. It shows others in favor of terminating the stimulus that's already in place.

The Fed's debate centered on the topic of inflation, and the pressures that a prolonged, near-zero Fed Funds Rate can place on the economy. Ultimately, the Fed did nothing, neither adding new stimulus nor removing that which is already in place.

It did, however, communicate a plan to keep the benchmark Fed Funds Rate rate "exceptionally low" through late-2014, at least.

The Fed Minutes included the following notes, too :

• On employment : Unemployment rates will "decline only gradually" in 2012
• On housing : The market is "held down" by the "large overhang" of distressed homes
• On inflation : Consumer prices have remained "flat"

Furthermore, the Fed expressed optimism regarding European financial markets, noting that market sentiment "appeared to brighten a bit". Nonetheless, "spillovers" remain possible and the threat continues to weigh on markets. 

Mortgage rates are slightly worse since the Fed Minutes were released. 

The Federal Reserve's next scheduled meeting is March 13, 2012 -- its second of 8 scheduled meetings this year.

Existing Home Sales Climb To A 20-Month Record

January's home resales moved to a 20-month high -- additional evidence that the nation's housing recovery is underway.

According to the National Association of REALTORS®, the January 2012 Existing Home Sales showed 4.57 million units sold last month on a seasonally-adjusted, annualized basis -- a 4 percent increase as compared to December's revised figures.

An "existing home" is one that's been previously occupied and cannot be categorized as new construction.

Beyond the headline numbers, though, there was plenty about which for today's Spokane home sellers to get excited. Demand for homes remains strong, foreshadowing higher home prices through 2012.

First, the national housing stock is at a 5-year low.

In January, the number of homes for sale nationwide slipped to 2.31 million, the smallest home inventory since February 2007, and a 21% decrease from just one year ago.

Falling home supply amid constant home demand leads home prices higher. At the current pace of sales, today's complete home inventory would "sell out" in 6.1 months. 

Analysts say that a 6-month supply is a market in balance. Anything less is Bull Market territory.

Second, the National Association of REALTORS® says that one-third of all homes under contract "failed" last month. This means that many more buyers tried to buy, but couldn't for a number of reasons including mortgage denials; or, insurmountable home inspections issues; or, homes appraising for less than the contract price.

As contract failures subside, Existing Home Sales are expected to rise even faster.

And, lastly, first-time buyers continue to power the home resale market. In January, 33% of all sales were made to first-time buyers, up four points from last year. This statistic suggests that renters are moving into homeownership, an important component in a sustained housing market recovery.  

Given high demand and shrinking supply, we should expect for home prices to rise in the coming months, if they haven't already. Thankfully, mortgage rates remain near all-time lows.

Low mortgage rates make homes more affordable.

Foreclosure Filings Down 19 Percent In One Year

 

Foreclosure filings fell 19 percent last month versus one year ago, says foreclosure-tracking firm RealtyTrac. It's yet one more signal that the U.S. housing market may have already climbed off its bottom.

According to RealtyTrac, 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.

In looking at the January 2012 figures :

• Default Notices were down 22% from January 2011
• Scheduled Auctions were down 19% from January 2011
• Bank Repossessions were down 15% from January 2011

On a monthly basis, however, the numbers weren't so promising.

Default notices and scheduled auctions were mostly unchanged, but bank repossessions rose 8 percent. The rise in bank repossessions is likely because 2010's robo-signing controversy has been rectified at the state and lender level.

This trend toward more bank-owned homes is expected to continue through 2012.

As in most months, January's foreclosure activity was geographically concentrated. Nevada led the nation in Foreclosures Per Capita, followed closely by California. 13 states fared worse than the national average of 1 foreclosure per 624 households. 37 fared better.

The difference in foreclosure frequency among the two groupings was stark :

• Top 13 Foreclosure States : 1 foreclosure per 435 households, on average
• Bottom 37 Foreclosure States : 1 foreclosure per 5,101 households, on average

North Dakota had January's lowest foreclosure rate nationwide. Just 1 in 63,500 homes was in some form of foreclosure in North Dakota last month.

As a first-time or seasoned buyer in Spokane , foreclosed homes can be enticing. They're plentiful and cheap. However, just because a foreclosed home can be bought for a "steal", that doesn't mean it's worth buying. The process of buying a foreclosed homes is different from the process of buying a non-foreclosed home.

The contract-and-negotiation process may be different with a foreclosed property, and foreclosed homes are often sold "as-is". This means the home you buy at auction could be run-down and defective to the point where it's uninhabitable.

If you plan to buy a foreclosed home, therefore, have a real estate professional on your side. The internet can teach you much about how the WA housing market works, but when it comes to writing contracts, you'll want an experienced agent on your side.

Make Your Own Organic Fruit Wash

How clean are the fruits and vegetables you eat? Unless you pick your food straight from the farm, your food is likely more dirty than you think.

In addition to pesticide treatment made while food is still "on the vine", fruits and vegetables you buy at a grocery are often coated in wax to preserve their "shelf life"; and you can never know how much dirt your food has rolled in.

Even organic foods are handled multiple times on the way to the grocery store. They may be pesticide-free, but they're not dirt-free or free from human handling. 

This is why we wash fruits and vegetables before consumption -- to wash off dirt. But, there are extra precautions you can take to make sure your food is truly "clean".

One such method is to use a make-it-yourself, organic fruit wash. The recipe is basic and simple. All you need is a large, lidded pitcher for mixing, some everyday foods, and a spray bottle.

1. In the large pitcher, pour 1 cup of water, 1 cup of white vinegar, and 1 tablespoon of baking soda.
2. Add 25 drops of grapefruit seed extract. If you can't find this at your local grocery, check with a natural food store or specialty store.
3. Mix ingredients in the pitcher, and pour into a spray bottle

That's it. 

Then, when you're ready to clean fruits and vegetables, use your homemade spray wash and coat the food liberally. Let the food stand for 5 minutes, then rinse the spray wash from the food in the sink.

Expect dirt to roll off fruit and vegetables surfaces and for the spray's vinegar component to neutralize pesticides. You'll be left with cleaner, healthier natural foods.

To make the fruit wash should take less than 5 minutes. Each batch should last one month, depending on the amount of fruits and vegetables you consume.

Make Your Own Organic Fruit Wash

How clean are the fruits and vegetables you eat? Unless you pick your food straight from the farm, your food is likely more dirty than you think.

In addition to pesticide treatment made while food is still "on the vine", fruits and vegetables you buy at a grocery are often coated in wax to preserve their "shelf life"; and you can never know how much dirt your food has rolled in.

Even organic foods are handled multiple times on the way to the grocery store. They may be pesticide-free, but they're not dirt-free or free from human handling. 

This is why we wash fruits and vegetables before consumption -- to wash off dirt. But, there are extra precautions you can take to make sure your food is truly "clean".

One such method is to use a make-it-yourself, organic fruit wash. The recipe is basic and simple. All you need is a large, lidded pitcher for mixing, some everyday foods, and a spray bottle.

1. In the large pitcher, pour 1 cup of water, 1 cup of white vinegar, and 1 tablespoon of baking soda.
2. Add 25 drops of grapefruit seed extract. If you can't find this at your local grocery, check with a natural food store or specialty store.
3. Mix ingredients in the pitcher, and pour into a spray bottle

That's it. 

Then, when you're ready to clean fruits and vegetables, use your homemade spray wash and coat the food liberally. Let the food stand for 5 minutes, then rinse the spray wash from the food in the sink.

Expect dirt to roll off fruit and vegetables surfaces and for the spray's vinegar component to neutralize pesticides. You'll be left with cleaner, healthier natural foods.

To make the fruit wash should take less than 5 minutes. Each batch should last one month, depending on the amount of fruits and vegetables you consume.

Housing Starts Stay Strong; Building Permits Rise.

The housing market has carried forward its year-end momentum. 

According to the Census Bureau, on a seasonally-adjusted, annualized basis, January's Single-Family Housing Starts crossed the half-million unit marker for the second straight month.

This hasn't happened in close to 2 years and is the latest in a series of strong data that suggests the beleaguered housing market has turned a corner -- both nationally and locally in Spokane.  

Although single-family starts slipped 1 percent from December, January's annualized 508,000 figure represents a 16% spike from January 2011 and is the second-highest reading since April 2010 -- the last month of 2010's federal home buyer tax credit program.

A "housing start" is a new home on which construction has started.

The strength of January's Housing Starts data surprised Wall Street analysts and is partially responsible for Thursday's unexpected mortgage rate spike. 

In hindsight, though, we should have seen this coming.

Earlier in the week, the National Association of Homebuilders announced that homebuilder confidence had climbed to its highest point since 2007 amid builder reports of rising sales volume and the most foot traffic from buyers in more than 4 years.

In addition, builders expect to sell more homes in 2012 than in 2011.

Builders are building and buyers are buying.

Meanwhile, as another sign of housing market strength, the Census Bureau reports that, in January, Building Permits moved to a multi-year high as well. Permits issued for single-family homes in January rose 1 percent from December, a statistic that suggests housing will continue its run through the spring season, at least.

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

It's a good time to be a home buyer. Mortgage rates and home prices are low. Housing market momentum, however, is building. If you're on the fence about whether to buy a home , ask your real estate agent for additional market information.

The cost of home-ownership may never be as low as it is today.

Homebuilder Confidence Returns To Pre-Recession Levels

New construction buyers in Spokane , look out. The nation's home builders are predicting a strong 2012 for new home sales. It may mean higher home prices as the spring buying season approaches.

For the sixth straight month, the National Association of Homebuilders reports that homebuilder confidence is on the rise. The Housing Market Index climbed four points to 29 in February, the index's highest reading since May 2007.

The Housing Market Index is now up 8 points in 8 weeks. The last time that happened was June 2003, a month during which the U.S. economy was regaining its footing, much like this month. It's noteworthy that June 2003 marked the start of a 4-year bull run in the stock market that took equities up 54%.

The NAHB's Housing Market Index itself is actually a composite reading. It's the end-result of three separate surveys sent to home builders monthly.

The association's 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?

In February, builders reported marked improvement across all three areas. Builders report that current home sales climbed 5 points; that sales expectations for the next 6 months climbed 5 points; and that buyer foot traffic climbed 1 point.

Most notable of all of the statistics, though, is that the nation's home builders report that there are now twice as many buyers setting foot inside model units as compared to just 6 months ago.

This data is supported by the monthly New Home Sales report which shows rising sales and a shrinking new home inventory.

Because of this, today's new home buyers throughout WA  should expect fewer concessions from builders at the time of contract including fewer price breaks on a home and fewer free upgrades. Builders are optimistic for the future and, therefore, may be less willing to "make a deal".  

This spring may mark the best time of year to buy a new home. 60 days forward, it may be too late.

With Retail Sales And Consumer Confidence Rising, Home Prices Are Expected To Follow

The U.S. economy continues to show signs of a rebound.

According to the Census Bureau, Retail Sales climbed to $329 billion last month on a seasonally-adjusted basis, excluding automobiles. January's data marks the 18th time in 19 months that Retail Sales rose, a run that's increased total sales receipts by 11 percent.

This is big news because Retail Sales accounts for close to 70% of the U.S. economy.

In addition, consumer confidence is rising.

In a separate, joint report from the University of Michigan and Thompson Reuters, it was shown that consumer attitudes toward the economy and the future are improving, primarily the result of recent job gains.  

The Survey of Consumers posted its highest value in 12 months.

It is not a coincidence that Retail Sales and consumer confidence both made multi-month highs -- the readings are more than loosely linked. As consumers feel more confident about the economy and their personal prospects for the future, they're more likely to spend money on goods and services, which leads to an increase in consumer spending.

For the housing market, the ramifications are two-fold.

First, from the financing side, an expanding economy is linked to rising mortgage rates. This is because Wall Street tends to chase risk in a growth economy and the bond market offers little in the way of risk. As demand for bonds drops, then, mortgage rates rise throughout WA.

Second, rising consumer confidence can lead Spokane home values higher, too.

Confident consumers are more likely than fearful ones to become home buyers. They're more likely to stop renting and start buying; more likely to list their home and "move-up" to something bigger; more likely to "take the next step".

So, as more buyers enter the market at a time when the national home supply is shrinking, the supply-demand balance in housing is shifting toward the sellers. This creates price pressures and should lead to higher home valuations.

If you have plans to buy a home in 2012, the best time to buy may be now. Today's mortgage rates are low and so are the home prices -- a combination that's unlikely to last.

Top 10 Sunniest Cities In the United States

As compared to gloomy days, do "sunny days" put you in a good mood? If you're like many people in WA , the answer is "yes".

In a study of more than 1,200 people, researchers found that daily weather factors such as temperature, precipitation and length of day can alter a person's emotional state. Of all the weather factors, however, "sunshine" can have the most profound effect.

The most likely reason is because sunshine affects people in a physiological manner.

When the human brain detects sunlight, our bodies produce serotonin, a chemical which promotes happiness and well-being. By contrast, when the brain detect darkness, our bodies produce melatonin, a chemical which promotes sleep cycles.

Sunlight -- quite literally -- leads to happiness.

Understanding the effect of sunlight on human mood, therefore, we must consider the nation's "sunniest cities" as more than just a novelty list. It may be a link to personal well-being, too.

From the National Climactic Data Center, these are the Top 10 Sunniest Cities in the United States :

1. Yuma, AZ : Sunny on 90% of all days
2. Redding, CA : Sunny on 88% of all days
3. Las Vegas, NV : Sunny on 85% of all days
4. Phoenix, AZ : Sunny on 85% of all days
5. Tucson, AZ : Sunny on 85% of all days
6. El Paso, TX : Sunny on 84% of all days
7. Fresno, CA : Sunny on 79% of all days
8. Reno, NV : Sunny on 79% of all days
9. Flagstaff, AZ : Sunny on 78% of all days
10. Sacramento, CA : Sunny on 78% of all days

The sunshine rankings of other noteworthy cities include Key West, FL (#12 with 76% sunshine); Denver, CO (#30 with 68% sunshine); and Seattle, WA (#165 with 43% sunshine). 

At the bottom of the list is Juneau. Just 30 percent of the Alaskan capital city's days are sunny.

The complete Sunshine Rankings as listed by Metropolitan Area is available on the NCDC website.

Revamped HARP : Unlimited Loan-to-Value And Same Great Rates

The government's new, revamped HARP program is 6 weeks from release. Homeowners in WA and nationwide are gearing up to refinance.

HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the government's loan product for "underwater homeowners". HARP makes current mortgage rates available to households which would otherwise be unable to refinance because the home lacks equity.

This is a big deal -- especially today. Mortgage rates are at an all-time low and millions of U.S. homeowners have been unable to take advantage. HARP aims to change that.

HARP originally launched in 2009. Its first iteration failed to reach a meaningful percentage of U.S. homeowners, however, because costs were high and loans were high-risk. With its re-release, the government has removed the hurdles to HARP, putting refinancing within reach for millions of U.S. households.

To qualify for HARP, homeowners must first meet 3 qualifying criteria.

First, their current mortgage must be backed Fannie Mae or Freddie Mac. FHA- and VA-backed loans are HARP-ineligible, as are jumbo loans and loans backed by portfolio lenders.

• To check if your loan if Fannie Mae-backed, click here.
• To check if your loan if Freddie Mac-backed, click here.

Second, the existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior on, or before, May 31, 2009. If you bought your home or refinanced it after that date, you are HARP-ineligible.

There are no exceptions to this rule.

And, third, the existing mortgage must be accompanied by a strong repayment history. Mortgage payment must have been paid on-time for the last 6 months, at least, and there may not be more than one 30-day late payment in the last 12 months.

If these 3 qualifiers are met, HARP applicants should find the approval process straight-forward : 

• Fixed rate mortgages allow unlimited loan-to-value
• The standard 7-year "waiting period" after a foreclosure is waived in full
• Except in rare cases, home appraisals aren't required 

Furthermore, HARP mortgage rates are expected to be on par with non-HARP rates, meaning that HARP homeowners in Spokane will get the same rates and pay the same fees as everyone else. There's no "penalty" for using HARP.

The revamped HARP is expected to be generally available beginning Monday, March 19, 2012.

To get a head-start on HARP, check with your loan officer for the complete list of HARP eligibility requirements.

Quick Tips : Boost Your Credit Score For Better Mortgage Rates

Credit scores play a huge role in today's mortgage market -- larger than at any time in recent history. Blame it on the high default rates of the last half-decade. Lenders are reserving their lowest rates for the customers most likely to make on-time repayments.

Mortgage rates are at an all-time low in WA. However, the low rates you see advertised on TV and online are only available to the home buyers and would-be refinancers whose credit scores are pristine. Having a high credit score is often the difference between getting "the best rates" from your lender, and getting something worse.

The first part of improving your credit score is understanding how it works. In this 5-minute piece from NBC's The Today Show, you'll learn the basics :

• Why you shouldn't close a credit card after you pay off a large debt
• What is the maximize balance to leave on your credit cards, relative to your credit limit
• What types of credit checks harm your credit scores, and which ones don't

You'll also learn how to shop for a mortgage with multiple lenders without having your credit score "dinged", as well as several proven methods to raise your credit score quickly.

In the end, good credit scores are the result of paying bills on time and staying with your means. Those with the best scores, get the best rates.

Federal Tax Deadline Extended To April 17, 2012

Traditionally, federal income taxes must be filed with the IRS on, or before, April 15 each year. The date has become such a part of U.S. culture that many people simply call it "Tax Day".

This year, however, for the 3rd time in 7 years, your federal income taxes will not be due April 15. Instead, because of a combination of the calendar, a holiday, and tax law, Tax Day 2012 is delayed until Tuesday, April 17.

You will have two extra days to prepare and file your federal income taxes this year. 

Here's why.

First, April 15 is a Sunday and all federal offices are closed on Sundays. This means that that taxes can't be filed on April 15, as regularly scheduled. Rather, the tax due date should roll over to the first available business day -- Monday.

However, Monday, April 16 is Emancipation Day, a holiday in the District of Columbia since 2005.

Emancipation Day honors President Abraham Lincoln's April 16, 1862 signing of the Compensation Emancipation Act. All of Washington, D.C. is closed for the local holiday -- including the offices of the IRS. Taxes can't be due on this date because there will be nobody at the Internal Revenue Service to receive them.

Therefore, Tax Day rolls over to the next available business day, and that's Tuesday, April 17. Despite the 2-day change, as a reminder, the deadline to file a federal tax return with extension has not changed. That filing date remains October 15, 2012. 

Also, note that most states have chosen to mirror the IRS' tax deadlines this year even though Emancipation Day is a Washington, D.C-specific. Be sure to check with your accountant to confirm your local filing deadline.

Lock An Instant 13% Savings On Your Monthly Mortgage Payment

Falling mortgage rates make owning a home more affordable. Mortgage rates are directly tied to monthly mortgage payment so as mortgage rates drop, so does the cost of home-ownership.  

It's a money-saving time to buy a home in Spokane -- or to refinance one. Mortgage rates have never been this low in history.

According to Freddie Mac, last week, the average 30-year fixed rate mortgage fell to 3.87% nationwide for borrowers willing to pay an accompanying 0.8 discount points plus closing costs. 0.8 discount points is a one-time closing cost equal to 0.8 percent of your loan size, or $800 per $100,000 borrowed.

This represents an incredible value as compared to February of last year. 

It was exactly one year ago that mortgage rates begin their long slide lower. On February 11, 2011, the 30-year fixed rate mortgage reached its peak for the year, reading 5.05% in Freddie Mac's nationwide survey. If you are among the many U.S. households that bought or refinanced a home around that time, you could choose to replace your current home loan with a new one and save close to 13% on your monthly mortgage payment.

13 percent saved on your mortgage is a noteworthy statistic.

Look at this 30-year fixed rate mortgage payment comparison over the last 12 months :

• February 2011 : $539.88 principal + interest per $100,000 borrowed
• February 2012 : $469.95 principal + interest per $100,000 borrowed

Because of falling mortgage rates, a homeowner with a $250,000 30-year fixed rate mortgage would save at least $175 per month just by refinancing into a new loan at today's mortgage rates. That's $2,100 in savings per year. 

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

We can't predict mortgage rates so there's no promise rates will stay like this forever. If you're planning to buy a home or refinance one, the best way to keep your monthly payments down is to lock your rate while rates are still low.

The market looks ripe for that now. 

The 10 Longest Commutes In The United States

According to the Census Bureau, more than 3.2 million U.S. workers spend over 3 hours commuting to and from work each day.

Commutes exceeding 90 minutes in each direction are known as "extreme commutes" in Census Bureau parlance. As compared to typical commute times nationwide, they're aptly named.

The national, average commute time is just 25.1 minutes. 

For home buyers in Spokane or in any U.S. city, make sure to make commute times a consideration before placing an offer on a property. The length of your daily commute will make an impact on your life.

Studies shows that shorter commutes are linked to higher levels of life satisfaction. Long commutes are linked to low levels of life satisfaction.

As ranked by the Census Bureau, here are the 10 cities with the longest average commute times, where commuting is defined as the total time to arrive at work, inclusive of all modes of transportation (i.e. automobile, train, subway, foot, or other) :

1. New York / North New Jersey / Long Island : 34.6 minutes
2. Washington, DC / Arlington / Alexandria : 33.4 minutes
3. Poughkeepsie / Newburgh / Middletown, NY: 32.2 minutes
   Bremerton / Silverdale, WA : 30.8 minutes
   Chicago / Naperville / Joliet, IL : 30.7 minutes
   Winchester, VA : 30.3 minutes
   Atlanta / Sandy Springs / Marietta, GA 30.1 minutes
   Riverside / San Bernardino / Ontario, CA : 30.0 minutes
   Stockton, CA : 29.8 minutes
   Baltimore / Towson, MD : 29.7 minutes
   Poughkeepsie / Newburgh / Middletown, NY: 32.2 minutes
4. Bremerton / Silverdale, WA : 30.8 minutes
5. Chicago / Naperville / Joliet, IL : 30.7 minutes
6. Winchester, VA : 30.3 minutes
7. Atlanta / Sandy Springs / Marietta, GA 30.1 minutes
8. Riverside / San Bernardino / Ontario, CA : 30.0 minutes
9. Stockton, CA : 29.8 minutes
10. Baltimore / Towson, MD : 29.7 minutes

By contrast, the shortest commute belongs to residents of Great Falls, Montana. The average commute for the city's 58,000 residents is 14.2 minutes.

A long commute to work should not deter you from moving to a particular home or neighborhood, but your time-en-route should be a consideration. Before making an offer on a home , therefore, practice the rush hour commute from your potential new neighborhood in the morning, and back to it again that evening.

Then, imagine making the commute every day.

Banks Start To Loosen Up In Underwriting

After a half-decade of tightening mortgage guidelines, banks are starting to "loosen up".

The Federal Reserve conducts a quarterly survey of its member banks and, last quarter, not a single responding bank reported having tightened its mortgage guidelines for prime borrowers.

A "prime borrower" is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.

53 banks responded to the Fed's survey and none said that mortgage guidelines "tightened considerably" or "tightened somewhat" between September and December 2011; 50 said that guidelines remained "basicaly unchanged"; 3 said that guidelines "eased somewhat".

Mortgage applicants sometimes remark that the mortgage approval process can be challenging. Last quarter's Fed survey hints that looser standards are coming. 

Not since before the recession have banks lowered mortgage approval standards like this and it bodes well for this year's Spokane  housing market. Real estate agents report that 1 in 3 home sale contracts fail with "declined mortgage applications" as a leading cause.

Looser mortgage lending standards should mean more home loan approvals for buyers, and fewer contract cancellations. This can spur the housing market forward.

Make note, though. "Looser standards" should not be confused with "irresponsible standards". It remains more difficult to meet bank standards as compared to 5 years. Today's underwriters are more conservative with respect to household income, overall assets and credit scores. 

Even as compared to one year ago:

• Minimum credit score requirements are higher
• Downpayment/equity requirements are larger
• Maximum allowable debt-to-income ratios are lower

For buyers and refinancing households gaining approval, though, the reward is the lowest mortgage rates in a lifetime. Mortgage rates in WA continue to fall, helping home affordability reach new highs.

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

Home Affordability Threatened By Friday's Jobs Report

This week, once more, we find mortgage rates are on a downward trajectory. Conforming mortgage rates have returned to near all-time lows. After Friday morning's Non-Farm Payrolls report, however, those low rates may come to an end.

It's a risky time for WA home buyers and would-be refinancers to be without a locked rate.

Each month, on the first Friday, the Bureau of Labor Statistics releases its Non-Farm Payrolls report for the month prior. More commonly called the "jobs report", Non-Farm Payrolls provides a sector-by-sector employment breakdown, and the nation's Unemployment Rate.

In December 2011, the government reported 200,000 net new jobs created, and an Unemployment Rate of 8.5%.

For January 2012, economists project 135,000 net new jobs with no change in the Unemployment Rate and, depending on how accurate those predictions are proved, FHA and conforming mortgage rates are subject to change. The monthly jobs reports tends to have an out-sized influence on the direction of daily mortgage rates.

The connection between jobs and mortgage rates is fairly direct.

Job growth is a key cog in the economic growth engine and mortgage rates change daily based on short- and long-term economic expectation. As more people join the workforce, economic expectations change; the economy tends to expand, breeding optimism among investment. When this occurs, it often spurs investment in the stock market, which tends to leads mortgage rates up.

In short, in a recovering economy, when job growth is strong, all things equal, mortgage rates rise. Home affordability suffers.

So, for today's rate shoppers, Friday's job report represents a risk. The economy has added jobs over 15 straight months, a streak that's added 2.1 million people to the workforce. Although the jobs market remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nationwide, more money spent by households, and more taxes collected by governments.

This items build a foundation for economic growth and Wall Street is watching.

If tomorrow's Non-Farm Payrolls shows more jobs created than the estimated 135,000, mortgage rates are expected to rise. If the jobs figures falls short, mortgage rates should fall.

The Non-Farm Payrolls report is released at 8:30 AM ET.

Case-Shiller Index Says Detroit And Washington DC Lead The Market

Standard & Poors released its November 2011 Case-Shiller Index this week. The index measures the change in home prices from month-to-month, and year-to-year, in select U.S. cities.

According to the data, for the second straight month, home values fell in 19 of the Case-Shiller Index's 20 tracked markets. In addition, also for the second straight month, Phoenix, Arizona was the lone Case-Shiller-tracked city in which home values rose.

Overall, November's Case-Shiller Index showed a 1 percent decrease in home values between October and November 2011, and a near-4 percent decrease between November 2010 and 2011, putting home values at roughly the same levels as 8 years ago. Don't read too far into it, however.

The Case-Shiller Index, though widely-cited, remains widely-flawed.

As a buyer or seller , relying on the Case-Shiller Index for market research can lead you to improper conclusions. To understand the Case Shiller Index's methodology is to understand why.

First, the Case-Shiller Index draws its data from a very limited geography.

There are more than 3,100 municipalities nationwide. The Case-Shiller Index tracks just 20 of them. And they're not the 20 largest, either. Four of the Top 10 Most Populous U.S. Cities are excluded (Houston, Philadelphia, San Antonio, San Jose) whereas Minneapolis and Tampa are not.

Minneapolis is the 48th largest city in the United States. Tampa is #55.

Next, when Case-Shiller Index gathers its data from its 20 cities, it only includes the home sale data of single-family, detached homes. This means that sales of condominiums and multi-unit homes are specifically excluded from the index. There are some cities -- Chicago and New York, for example -- where condominium sales represent a large percentage of the overall market.

The Case-Shiller Index ignores that.

And, lastly, when the Case-Shiller Index is published, it's published on a 60-day delay. Its data is not "current", therefore, and does little to tell buyers and sellers of Spokane and the country what's happening in their home markets right this minute. Instead, the Case-Shiller Index tells us how the housing market looked two months ago.

If you're active in the real estate market, either as a buyer or a seller, the Case-Shiller Index does you little good. For real-time data that actionable, speak to a real estate professional instead. It's where you'll find your best, most reliable and relevant information.

Supply Of New Homes At 6.1 Months Nationwide

New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in WA and nationwide, December's New Home Sales report is yet one more signal that the housing market recovery may be underway.

According to the Census Bureau, the number of new homes sold in December 2011 slipped 2 percent to 307,000 units on a seasonally-adjusted, annualized basis nationwide.

A "new home" is a home that is considered new construction; a home for which the buyer will be the first owner and tenant.

As compared to December 2010, last months' sales volume fell seven percent. It's a statistic that suggests housing market weakness. However, in looking at a different component of the New Home Sales report -- the supply of homes for sale -- we're forced to reconsider.

At the current pace of sales, every new home for sale nationwide would be "sold" in a matter of 6.1 months. 

Economists believe that a 6.0-month supply defines a market in balance -- anything quicker is termed a "seller's market". Statistics like that are enough to create urgency among today's Spokane home buyers. 

Unfortunately, the Census Bureau's data may be wrong.

Although December's New Home Sales report shows sales down 2 percent, the government's data was published with a ±13.2% margin of error. This means that the actual New Home Sales figure may have been as low as -15.2 percent, or as high as +11.2 percent. And, because the range of possible values includes both positive and negative numbers, the Census Bureau had no choice but to assign its December data "Zero Confidence".

It will be a few months before final revisions are made to December New Home Sales data. Until then, therefore, buyers should take cues from the market-at-large and the market-at-large hints at recovery. One example of this is homebuilders showing more confidence in their product than at any time in the last 5 years.

If your plans for 2012 call for buying new construction, therefore, consider using this lull to "make a deal". As the year progresses, the great values in housing may be gone.

5 Simple Ways To Declutter Your Home

When a home is listed for sale, its "clutter" can be the difference between a rapid sale and no sale at all.

Clutter, in its strictest sense, is defined as anything untidy; or in a disorderly state. In real estate, the term is broadened to include unnecessary furniture pieces; unwieldy artwork or collections; stacks of papers and/or magazines; and anything that otherwise restricts the open flow of a home's floor plan.

In other words, clutter is anything that distracts from your home's natural footprint.

As a home seller in Spokane , understanding how your home's clutter can affect a buyer is paramount to helping your home sell faster, and at a higher contract price.

First, there's the psychological angle. A potential home buyer may see clutter and think "mess". Few people want to buy a house they find messy or otherwise disorganized.

Second, there's the practical angle. A home that appears full of "things" also appears as if its lacking in storage space. This, too, can turn off buyers.

When you list your home for sale, here are basic tips to de-clutter your home. Some of this advice may not be practical with respect to your home, in particular, so make sure to ask your real estate agent for follow-up help.

1. In each room, remove photos, trophies, plaques and other personal items on display.
2. Remove large collections such as dolls, cars, miniature cans, and the like.
3. Remove worn throw rugs
4. Remove items from kitchen countertops, including small appliances
5. Remove items from bathroom countertops

You should also consider removing distinctive artwork from your walls, or replacing pieces with items that are more bland.

The over-reaching goal of de-cluttering is to depersonalize and neutralize your home so a buyer can visualize himself/herself living there. De-cluttering your home can also make your home appear larger, accentuating the features of each room. 

It's no wonder that minimally-cluttered homes tend to have a wider appeal among buyers.