Mortgage Guidelines Start To Loosen At The Country's Biggest Banks

Another quarter, another sign that mortgage lending may be easing nationwide.

The Federal Reserve's quarterly survey of senior loan officers revealed that an overwhelming majority of U.S. banks have stopped tightening mortgage requirements for "prime borrowers".

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

Of the 53 responding "big banks", 49 reported that mortgage guidelines were "basically unchanged" last quarter. Of the remaining four banks, two said mortgage guidelines had "eased somewhat", and the remaining banks said guidelines "tightened somewhat".

It's the second straight quarter in which fewer than 5 percent of banks tightened guidelines, and the first quarter in nearly 5 years in which the number of banks that loosened guidelines equaled the number of banks tightening them.

The easing in mortgage lending is a positive development for the housing market; and for buyers in cambrian and nationwide. Looser lending standards means that more buyers will be approved for home loans, and that should spur home sales forward across the region.

However, don't confuse "looser standards" with "irresponsible standards". It's much more difficult to get financing today as compared to 2006. Delinquencies and defaults have altered how a bank reviews a loan application.

Today, underwriters are more conservative with respect to household income, total assets and overall credit scores. Even as compared to just 6 months ago:

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

If you can get approved, though, your reward is that mortgage rates are especially low. Since early-April, both conforming and FHA mortgage rates have been on a downward trajectory, and pricing is near a 6-month low.

Home affordability is at an all-time high, too.

Looser guidelines and lower rates should help fuel home demand through the summer months. If you're in the market to buy, your timing appears to be excellent.

How To Set Your Ceiling Fan For Summer

Memorial Day marks the unofficial start of summer, and most parts of the country are already feeling the heat. Temperatures reached record highs in more than 50 cities yesterday.

And, for homeowners in cambrian with ceiling fans, the turn of season offers a simple way to lower your home's energy bill, too. All it takes is the flick of a button.

Ceiling fans are designed to circulate the air in a room. During colder months, ceiling fans push warm air down from the ceiling, raising the temperature of a room. During warmer months, ceiling fans push cold air back into circulation, creating a windchill effect, of sorts.

This video from The Weather Channel explains how it works.

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

As compared to adjusting your home's overall temperature in the summer, ceiling fans are economical and "green". Using the equivalent amount of energy as 100-watt light bulb, a single ceiling fan can reduce a room's effective temperature by 4 degrees. There's similar benefits in the colder winter months, too.

If your home is without ceiling fans, they're relatively inexpensive, and simple to install. There are tutorial videos online for the do-it-yourselfers, or you can call a qualified electrician for assistance. Need an electrician's name and a reference? Call or email me -- I'm happy to offer a referral.

Home Affordability Still Soaring; New Records Reached

Home affordability moved higher last quarter, buoyed by stable mortgage rates and falling home prices in calfornia and nationwide. The National Association of Home Builders reports that Q1 2011 Home Opportunity Index reached an all-time high for the second straight quarter last quarter.

Nearly 3 of 4 homes sold between January-March 2011 were affordable to households earning the national median income of $64,400. It's the 9th straight quarter in which home affordability surpassed 70 percent, and the highest reading in more than 20 years of record-keeping.

From metropolitan area-to-metropolitan area, though, affordability varied.

In the Midwest, for example, affordability was high. 7 of the 10 most affordable markets were in the Midwest, including Kokomo, Indiana, in which 98.6% of homes were affordable to median income-earning families. Indianapolis, Indiana placed second for "big city" affordability.

The most affordable "big city" last quarter was Syracuse, New York. With a 94.5% affordability rate, Syracuse ranks 8th nationally in the Home Opportunity Index. It's the second time that Syracuse placed first in the last 4 quarters.

Meanwhile, on the opposite end of home affordability, the "Least Affordable Major City" title went to the New York-White Plains, NY-Wayne, NJ area for the 12th consecutive quarter. Just 24.1 percent of homes were affordable to households earning the area median income, down more than 1 percent from the last reading.

Regardless of where you live, remember that rising mortgage rates can levy more pain on your household budget than can rising home values. And mortgage rates are expected to rise long before home prices do.

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

Home Price Index Shows Values Down 19 Percent From Peak

Home values dropped for the sixth straight month in March 2011, according to the Federal Home Finance Agency's Home Price Index. The Home Price Index is a government-sponsored home value tracker.

The HPI report is the latest in a string of "falling home values" stories -- a trend that's troubling home sellers across cambrian and nationwide.

However, although the Home Price Index says home values are falling, that doesn't necessarily mean that they are. Like most statistics in the housing sector, the Home Price Index is plagued by poor methodologies and a lack of timeliness.

In short, the Home Price Index is flawed. In three ways.

The first big flaw in the Home Price Index is that it only measures the values of homes with mortgages backed by Fannie Mae or Freddie Mac. Homes financed via FHA, or via other means are specifically excluded from the calculation. For today's purchase market, that leaves more than 1 in 4 homes "uncounted" -- a big percentage of the market.

Second, the Home Price Index determines home values by measuring price change from sale to subsequent sale. This eliminates new homes -- a major market segment.

And, lastly, the Home Price Index reports on a 60-day delay; we're only now seeing data from March. This two-month lag renders the HPI a trailing indicator for the housing market instead of a forward-looking one. If you're a home buyer looking for market insight, the HPI can't give it -- it's out-dated and out of season.

Despite its shortcomings, though, we can't ignore the Home Price Index completely. It's among the most thorough home valuation models available, and it's used in public policy discussions. When the HPI says prices are down, Wall Street and Capitol Hill take notice, and that trickles down to everyday life on Main Street.

Since peaking in April 2007, the Home Price Index is off 19.1 percent.

New Home Sales Increase For The Second Straight Month

Sales of newly-built homes surprised Wall Street, jumping 7 percent to an seasonally-adjusted, annualized 323,000 units last month.

In addition, the supply of new homes dropped to 6.5 months — a 2-month decrease from October 2010 and the best reading in a year.

The report runs counter to recent reports from the National Association of Homebuilders and the National Association of REALTORS® which suggest a looming housing slowdown. April's New Home Sales report runs counter to that theory; it shows ongoing, steady, staggered improvement in terms of sales volume and sales inventory.

Broken-down by sales prices, the New Home Sales report also showed that homes are selling across all price tiers. The "luxury market" improved most:

• Up to $199,999 : +1,000 homes from March
• $200,000 to $399,999 : +2,000 homes from March
• $400,000 and over : +3,000 homes from March

These figures suggest that that move-up buyers -- not first-timers -- are driving the new home market. Homes under $200,000 now account for just 40% new home sales, down from 46% a year ago.

However, as with most months, it's important that we recognize the New Home Sales data's margin of error. Although New Home Sales showed a 7% improvement in April, the reported margin of error was ±17%. This means that the actual reading could have been as high as 24 percent, or as low as -10 percent. 

It's a huge range, and because it encompasses both positive and negative values, the Census Bureau assigned its April reading "zero confidence". It's right there in the footnotes.

For home buyers in san jose , rising sales and falling supply may mean higher home prices. And, combined with the issuance of fewer building permits, supplies may be constrained into the summer months. This, too, would pressure home prices higher.

Memorial Day Messes With Mortgage Rates

Mortgage rates across the state are near year-to-date lows, but locking them in this week may be difficult. As Memorial Day nears, and Wall Streeters get a head-start on the long weekends, trade volume in the mortgage bond markets will dip.

When bond volume drops, mortgage rates get jumpy. It's a relationship based more on scarcity than actual market fundamentals.

It works like this:

1. Conforming and FHA mortgage rates are based on the "market price" of a mortgage-backed bond
2. Mortgage-backed bonds can't be bought or sold without a buyer and a seller at a specific price

As Friday gets closer this week, and more and more Wall Street traders will leave for their "extended" 3-day weekend, and bond markets will be left with fewer and fewer participants. This will create a market situation in which it's harder to match a buyer and seller at any given bond price, resulting in larger mortgage rate shifts than usual.

These jumps in rates are exaggerated during periods of economic uncertainty like these. What's more, there's a lot of economically-important data due for release this week. That, too, can put markets in hysterics.

If this were a "normal" week, mortgage rates would be volatile. The coming of Memorial Day is just adding to the mix.

Mortgage rates may rise in san jose this week, or they may fall.  Either way, if you have the opportunity to lock something favorable, consider doing it.  Rates are low and likely won't last.

All-Natural Pest And Weed Control For Your Garden

If you've spent time making your garden look great this spring, you'll want to spend time helping it stay that way through the summer. This brief video will teach you how to keep your yard pest- and weed-free using eco-friendly products and nature, itself -- all without the use of dangerous chemicals.

Some of the tips in the video include:

• Planting flowering nectar-bearing plants to attract "beneficial" insects
• Using electronic repellents and netting to keep pests away
• Adding a bird feeder to your yard

And, of course, you'll want to use all-natural pesticides made from the extracted oils and fruits and spices which, when combined, keep weeds and bugs under control.

One thing to remember with respect to lawn care, though, is that "organic" doesn't always mean "greener". Spot-application of a chemical-based product may best for your lawn's particular needs, and you should consider using harsher, traditional pesticides when needed.

When in doubt, talk to a lawn care specialist.

Distressed Homes Now Selling At A 20 Percent Discount

The housing market recovery stalled last month. At least temporarily.

According to the National Association of REALTORS®, Existing Home Sales slipped 1 percent in April from the month prior, falling to 5.05 million units on a seasonally-adjusted, annualized basis. The reading is exactly in-line with report's 6-month average which also reads 5.05 million units.

The data may appear "average", but there's another angle to consider. 

In April, as compared to March, the supply of existing homes for sales spiked. At the current pace of home sales, it would now take 9.2 months to exhaust today's complete home inventory. This is almost one full month worse than March. It's the worst home supply reading of the year.

There are also more homes "on the market" today than at any time since September 2010.

Other noteworthy statistics in the April Existing Home Sales report include:

• 31 percent of all homes sold in April were purchased with cash
• First-time home buyers bought 36 percent of all homes in April
• Distressed properties typically sold at a 20 percent discount

This "discount", it should be noted, is a major reason why distressed properties accounted for 37 percent of the home resales in April. Home buyers are finding bargains when they're willing to consider homes in various stages of foreclosure and short sale.

Overall, the April Existing Home Sales report represents opportunity for home buyers in and around san jose. Home sales are stagnant, supplies are rising and there's no shortage of properties from which to choose. Furthermore, mortgage rates remain low.

If you're considering a home purchase this fall, home supply may not be as ample, and financing conditions may not be as favorable, post-Labor Day. Talk to your real estate agent about what's possible today. You may want to move up your time frame.

Fed Minutes Put The Heat On Mortgage Rates To Rise

The Federal Reserve released its April 2011 Federal Open Market Committee meeting minutes Wednesday. In the hours since, mortgage markets have worsened; rates in california are higher by 1/8 percent this morning, at least.

The "Fed Minutes" is published 8 times annually, three week after each scheduled FOMC meeting. The minutes are the Federal Reserve's official recap of the conversations and debates that shaped the prior FOMC session.

Another way to consider the Fed Minutes is as the companion piece to the more well-known FOMC press release. The press release is issued on the day of adjournment, and is brief, narrow, and high-level. The statement makes broad comments on the economy and outlines new monetary policy.

By contrast, the Fed Minutes is delayed, lengthy, and rife with details. The minutes highlights arguments and discussion points between Fed members, and digs deep into underlying economic issues.

The FOMC press release is measured in paragraphs. The Fed Minutes is measured in pages.

Here is some of what the Fed discussed last month:

• On inflation : Higher levels are "transitory"; will level-off with commodity prices
• On housing : The market remains depressed. "Vacant properties" are harming construction.
• On stimulus : The Fed will stick to its $600 billion support plan

In addition, at its meeting, the Federal Reserve discussed an exit strategy for its market support. The details are undecided, but the debate shows that the Fed is anticipated a change in policy sometime soon. 

Wall Street estimates that a gradual economic tightening will begin within 12 months.

Mortgage rates have been fading since mid-April. The Fed Minutes may be the catalyst of a reversal. The Federal Reserve expects growth in the U.S. economy and growth tends to boost stock markets at the expense of bonds.

As bond markets fall, mortgage rates in campbell rise.

Currently, Freddie Mac reports the average 30-year fixed mortgage rate as 4.63% -- the lowest of the year.

Building Permits Fade Faster Than Expected

Single-family housing starts dropped by 21,000 units in April on a seasonally-adjusted annual basis.

The Housing Starts report measures the number of homes on which new construction "broke ground". It's tracked by the U.S. Department of Commerce which releases new data monthly.

Single-family housing starts fell 5 percent as compared to March 2011, and 30 percent as compared to April one year ago. 

The figures were worse than what Wall Street expected. For just the second time in 2 years, monthly single-family housing starts dropped below 400,000 units. In addition, single-family Building Permits fell in April as well, shedding 2 percent from March.

A building permit is a local government's approval to start home construction and when permits are down, new construction follows. This is because 93 percent of homes begin construction within 60 days of permit-issuance.

Fewer permits, as a consequence, means fewer new homes. Therefore, if you're looking at new construction in or around campbell , April's numbers may spark a sense of urgency.

Home prices are a function of home supply and demand and, based on the Housing Starts data, supplies appear headed for a fall. Meanwhile, on the other side of the equation, demand should be rising -- foot traffic is higher, mortgage rates are lower, and job growth is picking up. 

This should lead new home prices higher in time. For now, though, home affordability remains high.

It's a good time to look at new home construction.

Home Builders Seeing More Sales Today; Fewer Sales Tomorrow

Home builder confidence can't shake its range, according to the National Association of Home Builders. The group's monthly Housing Market Index put May's builder confidence reading at a level of 16.

The Housing Market Index is scored on a scale of 1-100. A reading above 50 suggests favorable conditions for the new home housing market, as reported by home builders. A reading below 50 suggests unfavorable conditions.

May marks the sixth time in 7 months that the HMI posted a 16, the longest such plateau in the index's history.

The HMI has not posted higher than 50 since April 2006.

As an index, the HMI is a composite of three separate surveys sent to home builders each month. The surveys are meant to capture the current and projected single-family home sales volume, in addition to buyer foot traffic levels.

Versus April, there was little change:

• Current single-family sales : 16 (+1 from April)
• Projected single-family sales : 20 (-2 from April)
• Buyer foot traffic : 14 (+1 from April)

Broken down, the Housing Market Index for May shows that home builders are experiencing a boost in sales and foot traffic today, but expect that boost to fade between today and November. For home buyers in san jose , this can present an opportunity.

With home builder confidence stagnating, and with a worsening sales expectation for the next 6 months, builders may be more willing to negotiate with you on home prices and/or the costs of upgrades. Builders may also be more willing to make concessions in your sales contract that would otherwise be unavailable to you.

Your real estate agent can help you to identify the negotiable items of your offer.

In addition, today's home buyers can exploit the recent strength of the mortgage market. Surging mortgage bond demand since April has pushed mortgage rates down to their lowest levels of the year. If you can find a home you love, therefore, it can be financed on the (relative) cheap, too.

Conforming mortgage rates in california fell through 5 consecutive weeks before rising last week.

Water Conservation Tips For Your Home And Garden

 

According to the EPA, the average U.S. household spends close to $500 each year on water and sewage bills. But by making just a few small changes, that figure could drop by as much as $170 annually. It's all in how you use your water.

In this 4-minute video from Lowe's, you'll learn basic water conservation techniques that you can immediately put to work.. 

Some examples:

• Don't rinse food from dishes before putting them in a dishwasher. Scrape the dishes instead.
• When brushing your teeth or shaving, turn off the water at the sink.
• Use a rain barrel to capture rain, then use the rain to water plants and shrubs.

There's a host of tips in the video but the recurring theme is that you should never "leave water running". This is because water at home is "treated" water and the amount of energy required to treat 5 minutes' worth of water from a faucet is equivalent to the amount of energy required to run a 60-watt light bulb for 14 hours.

That's a lot of energy.

Water is a precious resource, and it can be expensive, too. Therefore, help the environment and your budget at the same time -- practice water conservation at home.

15-Year Fixed Rate Mortgages Look Cheap Compared To Comparable 30-Year Fixeds

It's a great time for campbell buyers and homeowners to look at the 15-year fixed rate mortgage.

According to Freddie Mac's weekly Primary Mortgage Market Survey, the relative "discount" of a 15-year fixed rate loan as compared to a comparable 30-year product is the largest in recorded history. The interest rate spread between the two benchmark products is now 0.77%, nearly double the recent, 5-year average of 0.44%.

Despite its lower rates, however, homeowners that opt for a 15-year fixed mortgage should be prepared for higher monthly payments. This is because the principal balance of a 15-year fixed is repaid in half as many years as with a 30-year amortizing product.

The payment increase is 41% higher at today's rates. If you can manage that, though, you'll reap dramatic interest payments savings over time. For each $100,000 borrowed at today's market interest rates, your mortgage interest costs on a conforming 15-year term mortgage will be lower by $56,000 versus an identically-structured 30-year term. The more you borrow, the more you save.

That said, not everyone should use the 15-year product.

One reason you may want to avoid 15-year products is because the higher payments may lead to financial stress. Unless your monthly income far exceeds your monthly debts, choosing a 30-year product may feel safer for you.

Another reason is that, with less mortgage interest paid, 15-year mortgages don't allow for as many mortgage interest tax deductions. This can have tax implications to you each year. Or, maybe you prefer to have your home leveraged, investing "spare dollars" in stocks and bonds.

These are all legitimate cases to stick with a 30-year term, but if you've ever explored the idea of using a 15-year fixed rate mortgage for your home, today, the math is in your favor. Talk to your loan officer before the rates start rising.

New Home Sales Fall To All-Time, Recorded Low. Maybe.

Sales of newly-built homes plunged 17 percent to an seasonally-adjusted, annualized 250,000 units in February, and the supply of new homes rose to 8.9 months in February -- a 1.5 month jump from January.

It's the lowest New Home Sales reading in recorded history, according to the Census Bureau, and the third straight report to signal that home values may be slow to rise in san jose and nationwide this season.

Earlier this week, the National Association of REALTORS® reported Existing Home Sales down 10 percent from February, and the Federal Home Finance Agency said home values slipped 0.3 percent between December and January.

The media has picked up on the trend, too. 

• No Spring In Housing's Step (WSJ)
• Is Housing Really In Recovery (CNBC)
• Experts See Weak Recovery (UPI)

There's two interesting angles here. First, the one that's largely neglected in the stories online.

Although New Home Sales read -17% last month, the data's Margin of Error read ±19%. This means that, once additional homes are added to February's New Home Sales tally, it's possible that the reading actually rose 2%.

Because the Margin of Error exceeds the measured reading, February's New Home Sales figures are of "zero confidence". The Census Bureau even says as much in its report.

Or, if the initial reading is accurate, a second story emerges. Namely, how an increase in home supply may help this season's buyers to negotiate better prices for a home, and upgrades from a builder.

There's often more to a real estate story than its headline and February's New Home Sales proves it.

10 U.S. Cities With The Steepest Rent Increases (2010)

Home sales data is easing so far in this calendar year. Home resales and new construction have dropped to multi-month lows and, in many cities, home supplies are rising. One housing sector that's not slowing, however, is rentals.

The rental market is booming.

As reported by the Wall Street Journal, the average apartment vacancy rate is 6.6% nationwide, down from 8.0% last year. In addition, the number of occupied apartments rose by more during Q4 2010 than during any comparable period of the last 10 years.

It's a major reason why rents are up 2.3%.

Some areas, however, fared worse than others. This study of rent increases as published on MSNBC, for example, lists the 10 U.S. cities in which rents increased the most last year. And they may not be the cities you'd expect.

In order:

1. Greenville, SC (+11.2%; $669 average monthly rent)
2. Chattanooga, TN (+10.4%; $726 average monthly rent)
3. Savannah, GA (+8.4%; $866 average monthly rent)
4. Portland, OR (+8.1%; $875 average monthly rent)
5. San Jose, CA (+8.0%; $1,716 average monthly rent)
6. Nashville, TN (+8.0%; $786 average monthly rent)
7. Tacoma, WA (+8.0%; $900 average monthly rent)
8. Denver, CO (+7.5%; $873 average monthly rent)
9. Washington, DC (+7.4%; $1,473 average monthly rent)
10. Raleigh, NC (+7.4%; $785 average monthly rent)

Big cities New York (#18), San Francisco (#19), and Chicago (#24) showed modest gains, by comparison.

Not everyone across california wants to be a homeowner, but renters are facing a squeeze. With mortgage rates historically low and home values slow to recover, in many cities, the cost-benefit analysis is shifting toward buying.

Existing Home Sales Unexpectedly Drop In February

Existing Home Sales fell 10 percent last month, according to a report from the National Association of REALTORS®.

On an annual basis, 4.88 million homes were sold in February -- the first time annualized home resales dropped below 5,000,000 since November 2010.

An "existing home" is one that's not considered new construction.

And it's not just sales volume that's down. Home inventory is higher, too. At the current pace of sales, the number of months needed to sell the complete home resale inventory rose by 1.1 months, to 8.6 months nationally.

It's the biggest one-month jump in supply since July 2010 -- the month after last year's federal home buyer tax credit program expired.

The data is somewhat unexpected, too. NAR's Pending Home Sales report is a reliable predictor for the housing market and, based on recent findings, home sales were projected to climb in February. It's unclear why they didn't.

Regardless, the February sales data reveals an interesting breakdown by buyer-type. Notably, the percentage of first-time home buyers in the market grew by more than any other segment.

• First-time home buyers : 34% of all sales, +5% from January
• Repeat buyers : 47% of all sales, -1% from January
• Real estate investors : 19% of all sales, -4% from January

Cash buyers represented 33 percent of all sales, up 1 tick from the month prior.

For campbell home buyers, February's Existing Home Sales data suggests more home supply and lower home prices this spring. However, rising mortgage rates could eliminate the monthly savings attributed to falling home values.

To get the most from your mortgage-buying dollar, lock while rates are low.

Get That Last Drop Of Ketchup (And Other Household Money-Stretchers)

According to Consumer Reports, Americans waste as much as 25% of the products they purchase. From food to pharmaceuticals, pesky packaging is making it hard for consumers to use "the last drop" of the things they buy and, as such, products are thrown out prematurely.

It doesn't have to be that way. Using household tools and basic steps, you, too, can make less waste and stretch your household dollar. This 5-minute interview on NBC's The Today Show shows you how.

For example, you'll learn:

• How to get the last bit of ketchup from the jar (without adding water)
• How to get the last bit of hair gel from the plastic bottle
• How to get the last bit of body lotion from the bottom of the "pump" jar

Furthermore, you'll learn how to rescue over-ripe bananas.

The less you waste at home, the more money you'll save in the bank. Watch the video, take notes, and start making less waste.

Good News For Sellers -- Housing Starts Plummet In February

Single-family housing starts plunged unexpectedly last month. Nationwide, starts fell 12 percent from the month prior; and 29 percent from February of last year.

February's figures represents the worst 1-month drop in housing starts since May 2010 -- the month that followed the expiration of last year's federal home buyer tax credit -- and puts single-family housing starts at a 24-month low.

In addition, single-family Building Permits plunged last month, too, shedding 9 percent from January. A building permit is a local government's certification and approval to begin home construction.

Housing permits are an excellent forward-indicator for the housing market. This is because 93 percent of homes start construction within 60 days of permit-issuance. Fewer permits, therefore, directly reduces the number of new homes coming to market in the coming months.

For home buyers in san jose looking at new construction or existing homes, this news should create a sense of urgency.

Home prices are based on supply and demand and overall home supply looks headed for a fall. Plus, with mortgage rates retreating and homebuilders projecting higher sales this summer, buyers may face rising home prices before long.

Sellers look poised to regain negotiation leverage.

For now, though, home affordability remains high with properties inexpensive and mortgage rates still low, historically. If you plan to buy a home in 2011, the February 2011 Housing Starts data may be reason to move up your time frame.

With home supplies dropping, prices are likely to rise.

Homebuilders Expect More Sales Volume This Year

Homebuilders are optimistic about the housing market this spring, relative to recent months.

According to the monthly Housing Market Index as published by the National Association of Homebuilders, after 4 straight months of reading 16, March homebuilder confidence ticked 1 point higher to 17.

It's the highest confidence reading in 10 months.

A value of 50 or better indicates "favorable conditions" for home builders; with more builders viewing sales conditions as "good" than "poor".

HMI hasn't read higher than 50 since April 2006.

Regionally, the Housing Market Index showed mixed results. Confidence fell 1 point in the Northeast, held firm in the Midwest, and rose in the Southeast and West regions by 2 points and 4 points, respectively.

As an index, the monthly survey is actually a composite of three separate homebuilder surveys -- a report on single-family sales; a report on current buyer foot traffic; and a projection for single family sales in the next 6 months.

March's HMI breakdown shows that builders expect sales to be brisk over the next few months. Projected Single-Family Sales is running at its highest level since May 2010 -- right as the $8,000 federal homebuyer tax credit was ending.

• Single-Family Sales : 17 (Unchanged from February)
• Buyer Foot Traffic : 12 (Unchanged from January)
• Projected Single-Family Sales : 27 (+2 from February)

For home buyers in san jose and across the country , the March Housing Market Index may signal the end of "builder discounts" and free upgrades. As home sales increase, builders are often less likely to make concessions.

In conjuction with rising mortgage rates and new, mandatory loan costs, buying a newly-built home may never be as inexpensive as it is right now.

If you expect to buy a newly-built home this year, consider moving up your time frame. The longer you wait, the more it may cost you.

Rising Retail Sales Threaten Low Mortgage Rates

Another day, another piece of evidence that the U.S. economy is expanding.

Thursday, the Census Bureau released the April Retail Sales report. Excluding cars and auto parts, retail receipts rose for the 10th straight month and, at $321 billion, reached an all-time high.

Retail sales account for roughly half of consumer spending, and roughly one-third of the economy overall.

For home buyers and rate shoppers in campbell , the sales figures have positive and negative implications.

On the positive side, more retail sales suggests more confidence in the U.S. economy. This can spark a growth cycle that benefits the country, on the whole.

1. Consumers spend more money
2. Businesses sell more product
3. Businesses expand payroll to meet new product demand
4. Governments collect more taxes; fund more projects
5. Consumers gain more confidence and the cycle repeats

Furthermore, rising employment rates help to support higher levels of home sales which, in turn, can lead to higher home prices in california.

This is why Retail Sales data is so important to Wall Street and economists. It can hold clues to the future of the U.S. economy.

On the negative side, however, rising Retail Sales figures can harm home affordability. In addition to the aforementioned pressure on home prices, a strengthening economy can lead to higher mortgage rates. The weak economy of 2009-2010 is a major reason why mortgage rates were so low for so long.

As the economy improves, therefore, it follows that rates should reverse.

Each 1/8 percent increase to mortgage rates raises a mortgage payment $8 per $100,000 borrowed.

Retail Sales are up 7 percent from a year ago.