In another good sign for the housing market, today’s home builders believe that the housing market has turned a corner.

For the third straight month, the Housing Market Index — a home builder confidence survey from the National Association of Homebuilders — reported strong monthly gains.

December’s Housing Market Index climbed 2 points to 21 in December after a downward revision to last month’s results. The index is now up seven points since September 2011, and sits at a 19-month high.

When home builder confidence reads 50 or better, it reflects favorable conditions in the single-family new home market. Readings below 50 reflect unfavorable conditions.

The Housing Market Index has not crossed 50 since April 2006.

The HMI itself is actually a composite reading; the result of three related home builder surveys. The National Association of Homebuilders asks its members about their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and their current buyer “foot traffic”.

The results are compiled into the single Housing Market Index tally.

In December, builder survey responses showed strength across all 3 questions :

• Current Single-Family Sales : 22 (+2 from November)
• Projected Single-Family Sales : 26 (+1 from November)
• Buyer Foot Traffic : 18 (+3 from November)

These results support the recent New Home Sales and Housing Starts data, both of which show an increase in single-family sales, and a decrease in new home housing supply.

When demand rises and supplies fall, home prices climb.

It’s also noteworthy that the Housing Market Index put buyer foot traffic at newly-built homes at its highest level since May 2008. With even more buyers expected to enter the market, new home prices are expected to rise across Raymond in 2012 — especially in the face of shrinking home supplies. 

For now, though, with home prices stable and mortgage rates low, buyers can grab “a deal”. 60 days forward, though, may be too late.

The Spring Buying Season unofficially starts February 6, 2012. 

Mortgage markets improved last week, but by a slight amount only; not enough to move conventional mortgage rates in NH in any significant manner.

Wall Street watched as Eurozone leaders expressed little willingness to increase aid programs within the region, and as the Federal Reserve voted against new economic stimulus for the United States. The Fed Funds Rate remains near 0.000 percent and QE3 was not introduced.

Investors had expected the opposite outcome in both scenarios.

In most weeks, these stories would have led mortgage rates lower. There was, however, a fair amount of data suggesting that the U.S. economy is in recovery, and that tempered any major shifts in markets.

• Manufacturing data proved to be strong
• Inflation numbers are heating up
• Jobless claims continue to drop, week-to-week

In addition, in its last meeting of the year, the Federal Reserve specifically mentioned that the economy has been “expanding moderately”.

These are all good signs for the future of the U.S. economy. Unfortunately, for mortgage rate shoppers and would-be home buyers, it may mean higher mortgage rates ahead.

Since early-November, mortgage rates have idled, moving within a range of less than 2 basis points and centered on 3.99%. According to Freddie Mac, this week’s average 30-year fixed rate mortgage fell to 3.94% which, at first glance, appears to be a “dip”.

To get access to that rate, however, requires more discount points as compared to prior weeks.

This week’s 3.94% with its accompanying 0.8 discount points is the financial equivalent of last week’s 3.99% with its accompanying 0.7 discount points. Going further, last week’s rates are actually less expensive to mortgage applicants for the first 3 years of a loan because the closing costs are so much lower.

So, given global economic conditions and the mortgage bond market’s status as a “safe market”, the failure of mortgage rates to fall suggests that this may be as low as mortgage rates get. It’s time to look at locking in.

This week is a holiday-shortened week. Markets will close early-Friday and volume is expected to be thin. Therefore, expect exaggerated movements in rates. There are 3 releases related to housing (Housing Starts, Existing Home Sales, New Home Sales) and a consumer sentiment release. 

As mortgage rates drop, so do housing payments. It’s a good time to consider refinancing your home, or making an offer on a new one. Mortgage payment affordability has never been so high in history.

According to Freddie Mac, the average 30-year fixed rate mortgage rate is now 3.94 percent – an all-time low – with an accompanying 0.8 discount points. This means that in order to get access to the 3.94 percent rate, Raymond  homeowners and home buyers should expect to pay a loan fee equal to 0.8% of the borrowed amount, plus “normal” closing costs.

Last week, the average 30-year fixed rate mortgage rate was 3.99 percent with an accompanying 0.7 discount points.

Mortgage rates in NH have been in decline for most of the year. Since peaking in early-February, the average home owner’s principal + interest payment on a 30-year fixed rate mortgage had now dropped by 12.2 percent.

Here is how mortgage payments compare, then and now, not accounting for your individual tax-and-insurance escrow :

• February 10, 2011 : Payment of $539.88 per $100,000 borrowed
• December 15, 2011 : Payment of $473.96 per $100,000 borrowed

For existing homeowners, the dramatic drop in payments is reason to reach out to your loan officer. A refinance could save you tens of thousands of dollars over the life of your loan — especially if you chose to refinance your mortgage into a 15-year program.

The 15-year mortgage, says Freddie Mac, is also at an all-time low, registering 3.21 percent with 0.8 discount points, on average.

For home buyers, today’s low rates present an interesting opportunity.

Mortgage rates are the key factor in determining your monthly housing payment so, with average mortgage rates below 4 percent, it’s no wonder home affordability is cresting. However, the housing market is showing signs of recovery. Home supplies are dwindling, buyer demand is rising, and the economy appears to be mending.

Home prices are expected to rise in 2012 and, as they do, they’ll take housing payments with them. The best time to buy a home may be now; before the recovery completes.

Foreclosure activity continues to concentrate over just a few states.

According to foreclosure-tracker RealtyTrac, November’s foreclosure filings fell 3 percent as compared to October, and 14 percent from November 2010.

“Foreclosure filing” is a catch-all term for the various “action steps” throughout the foreclosure process. The grouping comprises default notices, scheduled home auctions, and bank repossessions.

As in most months, though, foreclosure activity remains concentrated by state. More than half of last month’s bank repossessions can be traced to just 6 states.

1. California : 14.8% of all bank repossessions
2. Florida : 12.7% of all bank repossessions
3. Texas : 7.0% of all bank repossessions
4. Georgia : 6.9% of all bank repossessions
5. Arizona : 6.7% of all bank repossessions
6. Michigan : 6.3% of all bank repossessions

Meanwhile, with just 5 repossessions, South Dakota topped the list of states with the fewest bank repossessions in November. The Mount Rushmore State accounted for just 0.009% of REO nationwide in a month in which bank repossessions dropped to a 44-month low point across the United States.

The drop in REO is coming at a tough time for today’s Raymond home buyers. Distressed properties are in high demand — mostly because they sell at steep discounts.

According to the National Association of REALTORS®, distressed homes accounted for 28 percent of all home sales in October. As fewer bank-owned homes become available, though, there will be fewer “deals” to be had.

Especially as the broader housing market continues to signal its recovery.

If you plan to buy a bank-owned foreclosed property, do your research first. As supplies drop, the price for foreclosed homes throughout NH relative to non-distressed homes may rise, rendering REO properties less of a relative “value”.

Before you write a contract, therefore, talk with a licensed real estate agent. There’s plenty of foreclosure data available online but, when it’s time to buy, you should have an experienced agent on your side.

Tuesday, the Federal Open Market Committee voted to leave the Fed Funds Rate unchanged within its current target range of 0.000-0.250 percent.

The vote was nearly unanimous for the second straight month. Just one FOMC member dissented in the vote, favoring additional policy stimulus beyond what the Federal Reserve currently provides.

In its press release, the Federal Reserve sais that the the U.S. economy is improving, noting that since its November 2011 meeting, the economy has been “expanding moderately”. The Fed also added that domestic growth is occurring despite some “apparent slowing in global growth” — a nod to ongoing uncertainty within the Eurozone.

The Federal Reserve expects a moderate pace of growth over the next few quarters, and believes that the jobs market will continue to improve, but slowly.

Other potential soft spots within the economy include :  

1. A slowdown in business investment
2. A “depressed” housing market
3. Strains in global financial markets

The Federal Reserve added no new policies at its December meeting, and made no changes to existing ones. It re-iterated its plan to leave the Fed Funds Rate within its current range of 0.000-0.250 percent “at least until mid-2013″ and re-affirmed “Operation Twist” — the stimulus program through which the Fed sells Treasury securities with a maturity of 3 years or less, and uses the proceeds to buy mortgage bonds with maturity between 6 and 30 years.

Mortgage bonds are mostly unchanged since the Fed’s announcement, giving mortgage rates in Bedford little reason to rise or fall.

Mortgage rates remain near all-time lows and, for homeowners willing to pay points + closing costs, 30-year fixed rate mortgages can be locked at less than 4 percent. If you’re thinking of buying or refinancing a home, it’s a good time to lock a mortgage rate.

The FOMC’s next meeting will be its first scheduled meeting of the new year. The meeting is slated for January 24-25, 2012.

BusinessWeek recently released its 2011 America’s Best Place to Raise a Family rankings. College-town Blacksburg, Virginia took top honors, breaking a 2-year win streak for the Chicago, Illinois region.

In 2009, suburban Mount Prospect, Illinois placed first. Last year, it was Tinley Park, Illinois.

The BusinessWeek report employs data from real estate information firm Onboard Informatics to make its rankings, compiling data across categories such as education, crime, and jobs plus access to parks and affordable homes. All selections are limited by population; all selections are home to 50,000 residents or fewer. Median incomes are within 20 percent — plus or minus — of the state’s median income levels.

BusinessWeek names one winner in each state. The winners in the 10 most populous states and their nearest “big city” are listed below

1. California : East San Gabriel (Los Angeles)
2. Texas : Wells Branch (Austin)
3. New York : Hampton Manor (Albany)
4. Florida : Niceville (Fort Walton Beach)
5. Illinois : Morton Grove (Chicago)
6. Pennsylvania : Cecil-Bishop (Pittsburgh)
7. Ohio : St. Henry (Dayton)
8. Michigan : Spring Arbor (Jackson)
9. Georgia : Hoschton (Atlanta)
10. North Carolina : Tryon (Spartanburg, SC)

The winners in all 50 states can be found on the BusinessWeek website.

Rankings like the BusinessWeek America’s Best Place to Raise a Family can be useful for home buyers in Manchester , but like everything in real estate, statistics do not apply to every home equally. Even within the “best towns”, there are areas in which school systems are better, crime figures are lower, and amenities are more plentiful.

Therefore, before you make the decision to buy a home, talk with a real estate agent who has local market knowledge. It’s the most effective means to get data that matters to you.

Mortgage markets were mostly unchanged for the 6th consecutive week last week as Wall Street’s uncertainty regarding the future of U.S. and global economies remain.

Mortgage bonds made gains made through the early part of the week, which caused mortgage rates in NH to drop Monday through Wednesday afternoon. Those gains were erased, however, as 23 of 27 Euro leaders reached agreement on fiscal coordination and budget planning, sparking optimism for the future of the Eurozone, in general.

Mortgage rates rose Thursday and Friday.

This week, the momentum may continue. The main story we’ll be watching is the Federal Open Market Committee’s Tuesday meeting — its 8th scheduled meeting of the year and its last until 2012. 

When the Fed meets, mortgage rates are often volatile.

At its meeting, the FOMC is expected to vote the Fed Funds Rate unchanged within its current range near zero percent. However, it won’t be the Fed’s vote on the Fed Funds Rate that changes markets. Wall Street is keyed in to two other elements, instead.

The first element is the verbiage of the FOMC’s press release to markets. Issued upon adjournment, the FOMC’s press release identifies strengths and weaknesses in the U.S. economy, and offers an outlook for the future plus potential threats. The “tone” of the press release can change how mortgage bonds trade.

If the Fed describes an economy in recovery with few threat to growth, mortgage rates are likely to rise post-FOMC. By contrast, if the Fed says the economy has slowed, mortgage rates should fall.

The second element on which Wall Street is focused is the likelihood of new, Fed-led economic stimulus. Should the Federal Reserve modify existing support programs, or introduce new ones, mortgage rates are sure to shift. Unfortunately, we can’t know in which direction — it will depend on the size of the program and its expected impact on the U.S. economy.

The Fed adjourns Tuesday at 2:15 PM ET.

Beyond the Fed, there is other rate-moving news, too, including Tuesday’s Retail Sales report, Thursday’s Producer Price Index, and Friday’s Consumer Price Index. Each has the capacity to change mortgage rates throughout Raymond so if you’re floating a mortgage rate, it may be a good time to lock one in. 

Freddie Mac reports the average 30-year fixed rate mortgage at 3.99% with 0.7 discount points, plus closing costs.

For as low as 30-year fixed rate mortgage rates are in NH today, 15-year fixed rate mortgage rates are even lower.

According to Freddie Mac’s weekly mortgage rate survey, the average 15-year fixed rate mortgage rate is now 3.27% nationwide with an accompanying 0.8 discount points. 1 discount point is a closing cost equal to 1 percent of your loan size.

The current 15-year fixed rate reading is just one tick above the all-time, 15-year fixed rate mortgage low of 3.26% set in October 2011.

If you’ve ever thought of “going 15″, it’s a terrific time to talk to your lender.

The primary benefit of using a 15-year fixed rate mortgage as opposed to a 30-year fixed rate one is that a 15-year fixed rate mortgage dramatically cuts the long-term interest costs of your loan. The downside is that monthly payments are relatively large.

At today’s mortgage rates, per $100,000 borrowed :

• 15-year fixed rate mortgage : $704 principal + interest monthly
• 30-year fixed rate mortgage : $477 principal + interest monthly

So, for homeowners opting for a 15-year fixed rate mortgage, the monthly principal + interest payments will be 48% higher as compared to a 30-year fixed rate mortgage of the same loan size. Long-term, however, because the 15-year fixed rate mortgage interest rate is lower and because it pays off in half the time of a 30-year loan, a homeowner will save $45,000 in interest costs per $100,000 borrowed.

$45,000 per $100,000 borrowed is a huge amount of savings. It’s monies that can be used for college tuition, home improvement projects, retirement savings, or anything else. 

That said, the 15-year fixed rate mortgage is not ideal for everyone.

Because it requires higher monthly payments, a 15-year fixed rate mortgage may add stress to your household budget. Furthermore, once you commit to a 15-year loan term with your lender, you can’t revert back to a 30-year loan term without a refinance and refinances can be costly.

Therefore, be sure of yourself when selecting a 15-year fixed rate loan. The rewards are great, but the risks can be, too.

As a homeowner in Raymond , your fiscal responsibility extends beyond just making mortgage payments. You must also pay your home’s real estate taxes as they come due, as well as your homeowners insurance policy premiums.

Failure to pay real estate taxes can result in foreclosure. Failure to insure your home is a breach of your mortgage loan terms.

There are two methods by which you can pay your real estate tax and homeowners insurance bills.

The first method is to pay your taxes and insurance as the bills come due, usually semi-annually. Depending on your home’s tax bill size and the cost to insure your home, these payments can feel quite large — especially if you’ve failed to budget for them properly.

The second method of paying your taxes and insurance is to give your lender the right to pay them on your behalf, a process known as “escrowing for taxes and insurance”.

When you escrow your real estate taxes and homeowners insurance, you pay a portion of your annual obligation to your lender each month, which your lender then holds in a special account for you, and disperses to your taxing entities and insurance company as needed. Lenders prefer that homeowners escrow taxes and insurance because, in doing so, the lender is assured that tax bills remain current and that homes stay insured.

Want a discount on your next mortgage rate? Tell your lender that you’re willing to escrow.

To help calculate your monthly escrow payment to your lender, do the following :

1. Find your home’s annual real estate tax bill
2. Find your home’s annual homeowners insurance premium
3. Add the two figures and divide by 12 months in a year

The quotient is your monthly “escrow”; the extra payment you’ll make to your lender each month along with your regularly scheduled principal + interest payment. Then, when your tax bills and insurance premiums come due, your lender will make sure the payments are made on your behalf.

If you’re unsure whether escrowing is right for you, talk to your loan officer and/or financial planner. There are valid reasons to choose either path.

Mortgage rates have troughed. Or, so it seems.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is 4.00 percent nationwide — roughly the same rate as it’s been for 5 weeks. 

During that times, rates have ranged between 3.97 and 4.02 percent with an accompanying 0.7 discount points, plus “typical” closing costs. Closing costs vary by state and 1 discount point is equal to 1 percent of your loan size.

In other words, to get the weekly, published Freddie Mac rate, borrowers in NH should expect to pay a complete set of fees to their respective lenders. The larger the loan, the higher the costs. “Low-fee” and “no-fee” loans are available, too — typically in exchange for a slightly rate.

A breakdown of the Freddie Mac survey shows that interest rates and discount points vary by region. Typically, states in the West Region offer the lowest rates but with the highest costs. East Region states work in reverse; rates are often highest but the accompanying points are fewest.

The most recent mortgage rate breakdown by region shows :

• Northeast Region : 4.00% with 0.7 discount points 
• West Region : 3.96% with 0.8 discount points
• Southeast Region : 4.06% with 0.9 discount points
• North Central Region : 3.97% with 0.7 discount points
• Southwest Region : 4.04% with 0.7 discount points

What’s most notable, though, is that in all 4 regions, rates are well below their 2011 highs. Since mid-April, mortgage rates have been in descent, dropping for 5 consecutive months before reaching to their current, “rock-bottom” levels in early-November.

Since then, however, rates have idled and the forces that combined to make rates low throughout Manchester are subsiding. The U.S. economy is showing signs of a rebirth; the Eurozone is edging closer to solvency; and the housing market is recovering.

So, if you’ve been wondering whether now is a good time to refinance, or whether higher rates will harm home affordability, the answer is yes. Get in touch with your loan officer to review your home loan options because, looking ahead to 2012, mortgage rates look poised to rise.