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 Worcester County area 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 Massachusetts 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 More… »

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 More… »

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 Worcester County area , 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.

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 Worcester County area 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. More… »

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, More… »

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 Worcester County area.

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 More… »

New construction buyers in Worcester County area , 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 More… »

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 More… »

The government’s new, revamped HARP program is 6 weeks from release. Homeowners in Massachusetts 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 Worcester County area 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.

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 Massachusetts. 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.