Wednesday, February 29, 2012

Pending Home Sales Rise To 22-Month High

Pending Home Sales Index 2011-2012The 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 Sandy 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 Utah 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. 

Tuesday, February 28, 2012


New Home Supply Falls To 5.6 Months

New Home Supply 2010-2012

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 South Jordan , 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.

Monday, February 27, 2012

50 Creative Reuse Ideas For Your Home And Garden

Creative reuse"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.

Friday, February 24, 2012


Federal Reserve Wary Of European Spillover

FOMC Minutes January 24-25 2012The 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 South Jordan , 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.

Thursday, February 23, 2012


Existing Home Sales Climb To A 20-Month Record

Existing home supplyJanuary'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 Sandy 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.

Wednesday, February 22, 2012

Foreclosure Filings Down 19 Percent In One Year

Foreclosures Per Capita January 2012 

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 South Jordan , 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 Utah housing market works, but when it comes to writing contracts, you'll want an experienced agent on your side.

Tuesday, February 21, 2012

Make Your Own Organic Fruit Wash

Make your own organic fruit washHow 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.

Friday, February 17, 2012

Housing Starts Stay Strong; Building Permits Rise.

Single-family housing starts

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 Draper.  

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.

Thursday, February 16, 2012

Homebuilder Confidence Returns To Pre-Recession Levels

NAHB HMI index 2010-2012

New construction buyers in Draper , 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 Utah  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.

Wednesday, February 15, 2012


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

Consumer Confidence vs Retail Sales (2009-2012)

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 Utah.

Second, rising consumer confidence can lead Sandy 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.

Tuesday, February 14, 2012


Fewer Jobless Claims Suggests Higher Home Prices Ahead

Initial jobless claims 2008-2012

Economists believe the strength of the 2012 housing market will be closely tied to jobs. If they're right, the housing market is ripe for a boost. It spells good news for Sandy home sellers and may mean the end of bargain-basement prices for buyers.

Since peaking in mid-2009, the number of U.S. workers filing for first-time unemployment benefits has dropped 44 percent. Over the same period of time, the U.S. economy has added more than 2 million jobs and the national Unemployment Rate is down more than 1 percentage point to 8.3%.

Employment's link to the housing market is both economic and psychological.

To make the economic link is straight-forward. A person with a job earns verifiable income and such income is required in order to be mortgage-eligible. For conventional and FHA purchase loans, for example, mortgage lenders want a home buyer's monthly income be more than double his monthly debts. 

For the formerly unemployed that have since returned to work, having a full-time income makes buying homes possible. It also supports higher home valuations nationwide because home prices are based on supply-and-demand. All things equal, when the number of buyers in a market goes up, prices do, too.

The psychological connection between housing and employment is a tad more complicated, but every bit as important. It's not just out-of-work Americans that don't look for homes -- it's fearful Americans, too. People with concerns about losing a job are just as unlikely to shop for homes as people actually without a job. The same is true for people unsure of their prospects for a better-paying job, or their own upward mobility.

A recovering job market can lessen those fears and draw out buyers -- especially those who face a loss on the sale of an "underwater" home.

The Initial Jobless Claims rolling 4-week average is at its lowest level since 2008. Fewer Americans are losing jobs, and more are finding permanent placement.

It's one more reason to be optimistic for this year's housing market. 

Monday, February 13, 2012

Top 10 Sunniest Cities In the United States

Sunniest US CitiesAs compared to gloomy days, do "sunny days" put you in a good mood? If you're like many people in Utah , 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.

Friday, February 10, 2012

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

Making Home Affordabie

The government's new, revamped HARP program is 6 weeks from release. Homeowners in Utah 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 Draper 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.

Thursday, February 9, 2012


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 Utah. 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.

Wednesday, February 8, 2012


Federal Tax Deadline Extended To April 17, 2012

Tax Day moved 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.

Tuesday, February 7, 2012


Lock An Instant 13% Savings On Your Monthly Mortgage Payment

Mortgage payments down 13%

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 Sandy -- 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. 

Monday, February 6, 2012

The 10 Longest Commutes In The United States

Longest CommutesAccording 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 South Jordan 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.

Friday, February 3, 2012

Banks Start To Loosen Up In Underwriting

FOMC senior loan officer survey 2011 Q4

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 South Jordan  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 Utah 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.

Thursday, February 2, 2012


Home Affordability Threatened By Friday's Jobs Report

3-month rolling average NFP

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 Utah 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.

Wednesday, February 1, 2012

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

Case-Shiller Annual Change November 2011

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 South Jordan 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.