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)
• U.S. Housing Starts Fall (MarketWatch)
• 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 did fall 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 NH 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.

Homebuilder confidence is soaring.

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.

In January, home builders reported improving sales conditions across all three categories :

• 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 NH. 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 Bedford , 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 Raymond 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.

Mortgage markets gained last week, picking up momentum into the weekend. Global demand for mortgage-backed bonds helped push mortgage rates to new lows, and closing costs eased somewhat, too.

According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage rate fell to 3.89% nationwide. In order to get access to 3.89% mortgage rates, Freddie Mac said, mortgage applicants should expect to pay a full set of closing costs plus 0.7 discount points.

1 discount point is equal to 1 percent of your loan size.

Loans with “low closing costs” or “no closing costs” will be at higher rates than Freddie Mac’s published, average rate.

The biggest reason why mortgage rates fell last week is because — once more — concerns over European sovereign debt resurfaced on Wall Street. This has been an ongoing story for more than a year, and one that won’t likely end soon.

Several Eurozone nations saw their respective credit ratings downgraded last week, a move that sparked safe haven buying of U.S. mortgage bonds. France was stripped of its top credit rating. Slovakia, Italy and Austria were each downgraded, too.

Markets were also influenced by a conflict between Greece’s creditor banks and the nation-state’s government. The breakdown in talks increases the likelihood of the Eurozone’s first sovereign default.

Meanwhile, domestically, in-line Retail Sales figures and rising consumer confidence helped to prop up the U.S. dollar, a move that’s linked to lower mortgage rates.

This week, the markets were closed for the federal holiday Monday, and re-open Tuesday without much data on which to trade. Several inflationary reports are set for release including the Producer Price Index and the Consumer Price Index; and, in housing-related data, we’ll see the Housing Starts report and Existing Home Sales figures for December.

Expect mortgage rates to follow the Eurozone story this week. Pessimism and weak data will be good for mortgage rates in NH and nationwide. Strength will lead mortgage rates higher.

If you’re still floating a mortgage rate or have otherwise yet to lock, mortgage rates are lower than they’ve been in history. It’s an ideal time to make aan interest rate commitment.

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 Bedford. 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 NH 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. 

The Federal Reserve has released the minutes from its most recent Federal Open Market Committee meeting. The Fed Minutes are a detailed meeting recap; the companion piece to the more brief, more well-known press release.

As a comparison, the minutes of the last FOMC meeting contained 60 paragraphs and 7,027 words. The post-meeting press release was just 5 paragraphs and 382 words.

December’s Fed Minutes shows Fed members with a positive, cautious, take on the economy.

Recent data suggests that the U.S. economy is expanding, the Fed said, but “strains” in global financial markets pose “significant risks” to the downside. This tell us that the Fed believes its economy-stimulating programs are working, but that officials remained concerned by events in the Eurozone.

The U.S. economy could be impacted by fallout. 

Other meeting consensus included : 

• On growth : The economy is expanding, despite slowing in “global economic growth”
• On housing : Data suggests the “depressed” market “could be improving”
• On inflation : Prices are stable, and remain within tolerance levels

The Fed’s analysis was of little surprise to Wall Street, and going forward, Fed Chairman Ben Bernanke wants to keep it that way. The Fed Minutes contained a passage regarding market communication, and how the Fed will be more pro-active about it in the future. 

With the release of its minutes, in a section called “Market Policy Communications”, the Federal Reserve showed its plans to release 4 times annually its economic forecasts, and plans for the Fed Funds Rate. This signals in a shift in Federal Reserve transparency.

The Federal Reserve will begin including the forecast in its economic projections beginning after its next policy meeting, January 24-25, 2012.

Mortgage rates in NH were little changed after the release of the Fed Minutes.

Consumer spending continues to rise nationwide, fueled by jobs growth and a rosier outlook for the U.S. economy. Unfortunately for mortgage rate shoppers |*STATE in % STATE**|, it may also lead to higher mortgage rates later this week.

Thursday morning, the Census Bureau will release its U.S. Retail Sales data for December. The report is expected to show an 18th consecutive monthly increase, with analysts projecting sales volume higher by 0.4 percent from November.

This would be double the increase from last month, which saw a 0.2 percent increase in Retail Sales.

The Retail Sales report tallies receipts collected by retail and food-service stores nationwide. When the sum of these receipts rise, it puts pressure on mortgage rates to do the same. The connection is straight-forward.

Retail Sales are the largest part of “consumer spending” and consumer spending accounts for the majority of the U.S. economy — up to 70 percent, by some estimates.

As the economy goes, so go mortgage rates.

Remember: today’s ultra-low mortgage rates have been partially fueled by weak economies — both domestic and abroad — going back 4 years. Stock markets have sold off as economies have faltered worldwide, leading investors to seek refuge in the relative safety of U.S.-backed mortgage bond market. The new-found demand for mortgage-backed bonds has helped drop mortgage rates to levels never seen in history.

When economic recovery is apparent, therefore, we should expect a mortgage rate reversal, and should expect for it to happen quickly. Stock markets should rise; bond markets should fall. Mortgage rates will climb. Rate shoppers will lose.

Last week’s strong jobs report sparked hope for the U.S. economy. If Thursday Retail Sales data reveals similar strength, the risk in “floating” your mortgage rate may be too great. The safer play is to lock your rate today.

The Retail Sales report will be released at 8:30 AM ET.

Starting soon, nearly all home buyers and refinancing households throughout NH and nationwide will pay higher mortgage loan fees. Congress has made it law.

13 months ago, as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Congress enacted a one-year cut to FICA payroll taxes.

FICA stands for Federal Insurance Contributions Act. Taxes collected under FICA fund such programs as Social Security and Medicare.

The stimulus plan temporarily lowered tax rates for salaried workers from 6.2% to 4.2%; and for self-employed persons from 12.4% to 10.4%. Effective January 1, 2012, “regular” tax rates were to return.

That is, until late-December 2011. In one of its last moves of the year, Congress passed a temporary, two-month extension to the payroll tax cut, extending it through February 29, 2012. The expected cost to the U.S. Treasury is $33 billion.

To recoup those costs, Congress has turned to Fannie Mae, Freddie Mac and the FHA.

Each entity has been ordered to collect news fees on each new mortgage is backs, and has been told to forward said fees to U.S. Treasury directly. There’s no “workaround” allowed or forgiveness applied — each new loan is subject to the payment. 

The rules are listed on page 17 of the law’s final draft, in a section unambiguously titled “Title IV — Mortgage Fees and Premiums”.

According to the law :

• Fannie Mae and Freddie Mac must collect an average fee of no less than 10 basis points (0.1%) per new loan
• The FHA must raise its monthly mortgage insurance premiums 10 basis points for all new loans

The expected cost to consumers is no less than $10 monthly per $100,000 borrowed. Some analysts, however, expect Fannie Mae and Freddie Mac to collect more than is minimally required. This could add an additional $30-50 to your monthly mortgage payment per $100,000 borrowed.

Therefore, if you’ve been shopping for a home or for mortgage rates in Raymond , take advantage. Within days, lenders are expected to start collecting Payroll Tax Extension fees from mortgage applicants — a move that will cost you money.

Lock today to avoid the big fees. Save yourself money.

Mortgage markets improved last week, pushing mortgage rates in NH lower for the second straight week. Conforming fixed and adjustable-rate mortgage cut new, all-time lows, and FHA mortgage rates did the same.

In a holiday-shortened trading week, stronger-than-expected U.S. economic data and ongoing weakness within Europe drove investors into the U.S. mortgage-backed bond market. When demand for bonds is high, mortgage rates improve.

The Refi Boom continues.

Since beginning their descent last February, mortgage rates have shed 114 basis points en route to reaching 3.91%, the current, “average”, 30-year fixed rate mortgage rate nationwide and a new all-time low, according to Freddie Mac and its mortgage market survey. If you’re among today’s home buyers or would-be refinancers, on a $200,000 mortgage, the 1.14% rate drop represents a monthly mortgage payment savings of $135 — $1,623 per year.

Larger loans save more, smaller loans save less.

This week, with little economic news set for release, mortgage rates are expected to take their cue from the 8 Federal Reserve members scheduled to speak in public, and from whatever news may bubble up from the Eurozone.

The Federal Reserve said it will communicate its vision for the U.S. economic more openly and more often so Wall Street will be watching the Fed members’ speeches this week, in search of clues about the Fed’s 2012 roadmap.

For example, there has been speculation that a new round of stimulus would be introduced at the Fed’s next meeting later this month. If, after listening to this week’s speeches, investors sense it will happen, mortgage rates may be susceptible to an increase in Manchester and everywhere else.

We’ll also be watching the Retail Sales report this week, due Thursday. Retail Sales are a reflection on consumer spending and consumer spending accounts for roughly 70% of the U.S. economy. If Retail Sales make gains, it may spark stock market gains at the expense of mortgage bonds.

This, too, would result in higher mortgage rates.

You can’t time the mortgage market, but with mortgage rates this low, it’s hard to go wrong. Talk with your loan officer to get a live rate quote.

For buyers and refinancing households throughout NH , adjustable-rate mortgages are a relative bargain as compared to fixed-ones.

According to Freddie Mac’s weekly survey of more than 125 banks nationwide, |**CITY**| mortgage applicants electing for a conventional ARM over a conventional fixed-rate mortgage will save 105 basis points on their next mortgage rate.

“Conventional” loans are loans backed by Fannie Mae or Freddie Mac.

Today’s average, conventional 30-year fixed rate mortgage rate is 3.91% plus points and closing costs. The average rate for a comparable 5-year ARM is 2.86%, plus points and closing costs.

In other words, for every $100,000 borrowed, a conventional 5-year adjustable-rate mortgage will save you $58.15 per month, or $698 per year.

That’s a 12 percent savings just for choosing an ARM.

12 percent is a big figure that adds up over 5 years — especially for households that plan to sell within those first 60 months anyway. There is little sense in paying the mortgage rate premium for a 30-year fixed-rate mortgage when a 5-year ARM is perfectly suitable.

For the reason why adjustable-rate mortgages continue are so much lower than their fixed-rate counterparts, look no further than the U.S. economy. ARMs reflect Wall Street’s short-term economic expectations; whereas fixed-rate mortgages reflect medium- to long-term expectations.

In the short-term, analysts expect the U.S. economy to grow slowly, with low levels of inflation. This supports the U.S. dollar, the currency in which mortgage bonds are denominated. When the dollar is strong, demand for mortgage bonds tends to increase.

This supports lower interest rates.

Conversely, over the longer-term, inflation is expected to return, which devalues the dollar and everything paid in it (e.g.; mortgage-backed bonds). This is why inflation is linked to higher mortgage rates. When inflation is present in the economy, mortgage bonds lose value, driving mortgage rates up.

Adjustable-rate mortgages aren’t perfect for everyone, but in the right situation, they can be a big money-saver and a helpful tool for stretching a household budget. Given today’s rates, the money-saving potential is larger than usual.

Before you choose an ARM, discuss your options with your loan officer.