After 3 consecutive months of growth, the housing market appears to have eased a bit in December.
According to the National Association of REALTORS®, December’s Pending Home Sales Index slipped 4 percent from the month prior. The index measures the number of homes under contract to sell nationwide, but not yet sold.
Despite falling below its benchmark “100 value”, December’s Pending Home Sales Index is the reading’s second-highest value since April 2010 — the last month of last year’s home buyer tax credit program.
In other words, the housing market continues to show signs of improvement, propelled by low home prices and the cheapest mortgage rates of all-time.
Freddie Mac’s mortgage rate survey put the 30-year fixed rate mortgage at an average of 3.96% in December — a 75-basis point improvement from December 2010. This helps to make homes more affordable nationwide.
On a regional basis, December’s Pending Home Sales Index varied :
Northeast Region: -3.1 percent from November 2011
Midwest Region : +4.0 percent from November 2011
South Region : -2.6 percent from November 2011
West Region : -11.0 percent from November 2011
But even regional data is only so helpful. Like everything in real estate, data must be local to be relevant.
Throughout the West Region, for example, the U.S. region in which pending home sales fell the most, several states must have performed better than the regional average. And, undoubtedly, there were cities, towns, and neighborhoods that experienced marked market growth.
Unfortunately, the Pending Home Sales Index can’t capture that data. Nor can it identify the markets in which home sales suffered.
For today’s Vinings home buyers and sellers, therefore, it’s important to understand your local market and the drivers of local activity. Reports like the Pending Home Sales Index can paint a broad picture U.S. housing but for data that matters to you, you’ll want to look local.
For local real estate data, talk to an experienced real estate professional.
Wednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The Fed Funds Rate has been near zero percent since December 2008.
For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed’s official statement.
In its press release, the Federal Reserve noted that the the U.S. economy has “expanding moderately” since its last meeting in December 2011, adding that the growth is occurring despite “slowing in global growth” — a reference to ongoing economic uncertainty within the Eurozone.
The Federal Reserve expects moderate economic expansion through the next few quarters but is wary of “strains” from global financial markets, and these three threats to the U.S. economy :
The housing sector remains “depressed”
The unemployment rate remains “elevated”
Fixed business investment has “slowed”
On the positive side, the FOMC said that household spending is rising and inflation remains in-check. The group also believes that employment will gradually improve nationwide going forward.
The Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs.
Immediately following the FOMC’s statement, mortgage markets rallied, pressuring mortgage rates to fall in and around Vinings.
Mortgage rates remain near all-time lows and, for homeowners willing to pay points plus closing costs, conventional, 30-year fixed rate mortgages can be locked at below 4 percent. If you’re in the process of buying or refinancing a home in GA , it’s a good time to lock a mortgage rate with your lender.
The FOMC’s next scheduled meeting is a one-day event slated for March 13, 2012.
The Federal Open Market Committee adjourns from a scheduled 2-day meeting today, its first of 8 scheduled meetings this year.
The FOMC is a designated, rotating, 12-person committee within the Federal Reserve, led by Federal Reserve Chairman Ben Bernanke. Members of the FOMC sub-committee are the voting members of the Federal Reserve; the ones that ultimately determine U.S. monetary policy.
The most well-known Federal Reserve monetary policy tool is the central bank’s Fed Funds Rate. The Fed Funds Rate is the prescribed interest rate at which banks borrow money from each other for a period of one night.
The Fed Funds Rate can only be changed by FOMC vote.
For home buyers and would-be refinancing households in Decatur , it’s important to recognize that the Fed Funds Rate is an interest rate separate and distinct from “mortgage rates”. Mortgage rates are not voted upon by the Federal Reserve. Rather, mortgage rates are based on the price of mortgage-backed bonds, a security bought and sold among investors.
Historically, there is little correlation between the Fed Funds Rates and 30-year fixed rate mortgage rates throughout Georgia. Going back 20 years, the benchmark rates have been separated by as much as 5.29% and have been as near as 0.52%.
The spread has even gone negative, most recently in 1979 and 1981 — a period marked by high inflation.
Today, the separation between the Fed Funds Rate and the average, 30-year fixed rate mortgage rate is roughly 3.60%. Beginning at 12:30 PM ET, however, that spread is expected to change. The FOMC will make its statement to the press at that time, and will release its quarterly forecast to the markets.
As Wall Street reacts to the Fed’s press release and projections, mortgage rates will move.
Investors expect the Fed to vote the Fed Funds Rate unchanged from its current range near 0.000 percent, but are unsure of how the Fed will characterize the U.S. economy. If the Fed speaks optimistically on the economy, stock markets should rise and mortgage bonds should fall, driving mortgage rates higher.
Conversely, if the Fed shows concern for future economic growth, mortgage rates should drop. Either way, today figures to be volatile one for mortgage markets.
When mortgage markets get volatile, the safe play as a rate shopper is to lock your mortgage rate immediately. There too much risk in floating.
The housing market finished 2011 with strength, and is carrying measurable momentum into 2012.
According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, December’s Existing Home Sales climbed by 120,00 units overall from the month prior on its way to an 11-month high.
An “existing home” is a home that’s been previously occupied; that cannot be considered new construction.
After 4.61 million existing homes were sold in December, there are now just 2.38 million homes for sale nationwide. The last time the national home supply was this sparse was March 2005.
At today’s sales pace, the complete, national home inventory would be exhausted in 6.2 months — the fastest pace since before the recession. A 6.0-month supply is believed to represent a market in balance.
Foreclosures sold at an average discount of 22% to market value
Short sales sold at an average discount of 13% to market value
Together, foreclosures and short sales accounted for 32% of all home sales
Clearly, “distressed homes” remain a large part of the U.S. housing market.
Furthermore, in its report, the real estate trade group also noted that one-third of homes under contract to sell nationwide succumbed to contract failure last month. That’s up from 9% one year ago.
Contract failure occurs for a multitude of reasons, most notably homes appraising for less than the purchase price; the buyer’s failure to achieve a mortgage approval; and, insurmountable home inspection issues. December’s high failure rate underscores the importance of getting pre-approved as a buyer, and of buying homes in “good condition”.
For today’s home buyer in Vinings , December’s Existing Home Sales figures may be construed as a “buy signal”. Home supplies are dropping and buyer demand is rising. This is the basic recipe for higher home prices ahead.
If your 2012 plans call for buying a home, consider that home values throughout Georgia are expected to rise as the year progresses. The best values of the year may be the ones secured this winter.
How long has it been since you last changed your home’s air filters?
Home air filters trap and remove dust and particles from the air you breathe; leaving “clean air” to circulate your home.
Clean air in your home is important because it promotes better health.
One way to keep to keep your home’s air as clean as possible is to replace its used air filters at least once per quarter; or once monthly in homes with shedding pets or that otherwise “get dusty”.
Changing air filters is among the easier do-it-yourself chores for a Vinings homeowner; a task that takes less than one minute. The secondary benefit of doing it is that new filters help keep your HVAC unit in tip-top shape.
Here’s how to change your home’s air filter :
Open the air filter compartment door/slider on your HVAC unit.
Note the size of your current filter. It’s typically written on the frame.
Note the direction in which the filter is pointing. There may be an arrow on its frame.
Purchase a new filter at a hardware store. Make sure the sizes matches the size from Step 2.
Remove the old filter.
Replace old filter with the newly purchased one from Step 4. Make sure the arrow is pointing in the same direction as the original filter’s arrow.
Using a marker, note the date of filter change on the side of the filter.
Close the air filter compartment door/slider.
And that’s it.
When you find a filter type and style that you like, consider buying them in bulk — it can be helpful to have extra air filters laying around the home for when you need them — especially during season changes when you may want to replace filters more frequently.
In addition, when purchasing air filters, don’t opt for the cheapest available. Often, the least expensive filters allow large particles to recirculate through the HVAC unit, and back in to your home. Choose a middle- or top-line product instead.
When it comes to housing data, sometimes you have to look past the headlines. December’s Housing Starts data offers a terrific illustration of why.
Each month, the Census Bureau tallies Housing Starts for the month prior. A “housing start” is a home on which construction has started.
The Housing Starts report is separated by property type. There is a count for single-family homes; a count for 2-4 unit homes; and a count for buildings of 5 units or more, a category including apartments and condominiums.
In December, as reported by the government, Housing Starts fell 4 percent nationwide overall. This runs contrary to recent strength in housing and the story was quickly picked up by the press :
U.S. Housing Starts Fall More Than Forecast (BusinessWeek)
December Housing Starts Are Worse Than Expected (Fox Business)
Now, although these headlines are factually true, they’re also are a little bit misleading.
Housing Starts didfall 4 percent last month but that was for all Housing Starts, across all three property types. Data like this is somewhat irrelevant to home buyers in Georgia or anywhere else nationwide.
Few buyers purchase 2-4 unit homes, and almost nobody purchases an entire apartment building. Rather, it’s the Housing Starts reports’ “single-family” tally that matters because that’s the home type that the majority of home buyers purchase.
In December, for the fourth straight month, Single-Family Housing Starts increased.
Single-family housing starts climbed 4 percent last month to 470,000 units on a seasonally-adjusted, annualized basis. This is the highest number of Single-Family Housing Starts since April 2010 — the last month of last year’s home buyer tax credit.
The Single-Family Housing Starts data is the latest in a series of data that point to a housing rebound nationwide. New Home Sales, Existing Home Sales, Pending Home Sales and Homebuilder Confidence has each posted multi-month highs and all are poised for strong gains into 2012.
If you’re planning to buy a home in 2012, consider buying in between now and March rather than at some point later. Home prices — and mortgage rates- are likely to move higher.
For the fourth straight month, the National Association of Homebuilders reports an increase in its Housing Market Index. The index climbed 4 points to 25 this month – its second four-point gain since October.
With home sales activity increasing across all four regions, the monthly HMI has now nearly doubled in value since June 2011.
The HMI is now at a 55-month high.
The Housing Market Index itself is a composite reading; the result of three home builder surveys sent by the National Association of Homebuilders to its members monthly. Home builders report back on current single-family home sales volume; projected single-family home sales volume for the next 6 months; and current buyer “foot traffic”.
The NAHB then results compiles the surveys into a single reading.
Current Single-Family Sales : 25 (+3 from December)
Projected Single-Family Sales : 29 (+3 from December)
Buyer Foot Traffic : 21 (+3 from December)
The Housing Market Index corroborates recent U.S. government data that suggests housing is mending in GA. Both Housing Starts and New Home Sales have out-performed expectations of late, it’s been shown, and the stock of new homes for sale nationwide is dwindling.
All of this, of course, is happening as demand from buyers heats up. Foot traffic through builder homes is higher than it’s been in more than 3 years, say the builders — a time period that includes the duration of the 2010 home buyer tax credit.
It’s no surprise, therefore, that builders expect a strong 2012.
Jobs data is improving, mortgage rates remain low, and housing momentum is building. For home buyers in Vinings , however, it may spell higher home prices ahead. Big demand and small supply creates scarcity and scarcity correlates to rising prices.
If you’re shopping new homes, the best “deal” may be the one you find today.
Foreclosure filings are fewer these days, according to foreclosure-tracking firm RealtyTrac.
In December 2011, the number of foreclosure filings nationwide fell 9 percent from the month prior. Not since November 2007 has foreclosure activity been this sparse across the country.
The drop does not appear to be seasonal, either.
Last month’s foreclosure filings were down 20 percent from December 2010 with “foreclosure filing” 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. As a result of a unexpectedly strong year-end, 2011′s annual foreclosure rate was the lowest in 4 years.
One reason why the year may have closed so strongly is that Nevada, California, Michigan and Arizona — four states typically associated with high rates of foreclosures — each posted big drops in foreclosure filings between November and December, plus double-digit drops between December 2010 and December 2011.
In fact, among the country’s top 10 states for foreclosure activity, nine showed an annual foreclosure filing reduction.
Only Delaware worsened.
It’s also noteworthy that just 4 states accounted for half of last month’s total foreclosure filings.
California : 25.8 percent of all foreclosure filings
Florida : 12.0 percent of all foreclosure filings
Michigan : 6.4 percent of all foreclosure filings
Illinois : 6.2 percent of all foreclosure filings
Foreclosures are heavily concentrated, in other words. By contrast, the last 1% of activity is spread across 14 states.
As a Vinings home buyer — first-timer or investor — foreclosures can be a great way to find value.
According to the National Association of REALTORS®, distressed homes typically sell at “deep discounts“ as compared to like, non-distressed homes. However, when you buy a foreclosure home from a bank, it’s different from buying a home from a “person”. Purchase contract negotiations are different and months may pass before your closing is approved.
If you’re buying foreclosure, therefore, seek the help of a professional real estate agent. Real estate agents have experience working in the process-heavy world of foreclosures and can help you come out ahead.
Exposed interior brick can add a nice, decorative touch to your Vinings home, but because brick is a porous material and prone to staining, it can be cumbersome to clean.
Standard household detergents alone are rarely enough to clean brick properly, so if your home features exposed interior brick, plan to use alternative cleaning methods instead.
Here is how to do it.
First, find a pair of sturdy rubber gloves to protect your hands from the harsh brick surface and from your cleaning agents. Then, with a dry dish cloth, gently wipe the entire surface of the brick wall to remove loose dirt and dust.
Next, pour a grease-cutting dish detergent into a small bucket. Do not add water to the detergent. Add a small amount of table salt instead.
Mix well.
Next, apply a thin layer of the soap-and-salt mix to the bricks using a cloth and allow the mix to sit on the bricks for 10-15 minutes. Then, with a hard-bristled scrub brush, gently scrub the brick to remove the stubborn dirt.
Lastly, dip a clean dishcloth into a warm water-filled bucket and use the dishcloth to remove the detergent mix from the wall.
Allow the wall to air dry.
Cleaning exposed interior brick is more complicated than cleaning other household surfaces but a clean brick wall can help reduce in-home health hazards and keep your brick in its best possible condition for the long-haul.
Will your home gain value over the next 12 months? Nobody can know for sure, of course, but should recent housing trends continue, there’s concrete cause for optimism.
The housing economy has suffered since 2007, knocking home values down nearly 20% nationwide. And while some areas have fared better as compared to others but, in general, home values are down.
Mortgage rates are down, too, and that’s good news for buyers in Atlanta. The combination of low rates and low prices has led home affordability to an all-time high. As you’ll hear in this 4-minute interview with NBC’s The Today Show, carrying a mortgage costs 25% less per month as compared to just 3 years ago.
Some other notes from the interview include :
There are more buyers out looking for homes today, which leads to more sales
The housing market is expected to get gradually better, month-by-month, in 2012
Foreclosures will continue to be a big part of the housing market
With housing supplies shrinking, buyers throughout GA may find their best “deals” today — before the Spring Buying Season begins in February.
However, we can’t forget that housing markets are local — not national. Each town and neighborhood has its own market drivers and prices where you live may have already started to climb.
For accurate, up-to-date data on the housing market, talk with a local real estate agent.
Wednesday, the Federal Reserve’s Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.
The housing market finished 2011 with strength, and is carrying measurable momentum into 2012. 
How long has it been since you last changed your home’s air filters? 
Exposed interior brick can add a nice, decorative touch to your Vinings home, but because brick is a porous material and prone to staining, it can be cumbersome to clean.