The Headlines Were Overly Rosy On February's Case-Shiller Index

Earlier this week, Standard & Poors released its February Case-Shiller Index, a home price tracker for select metropolitan areas. 

Overwhelmingly, home values fell in the 20 markets tracked by the Case-Shiller. Only San Diego showed a modest increase.  The other 19 markets averaged a 1.23 percent decline between January and February.

However, that's not the story you read in the most papers. Instead, headlines read that home values were up in the United States, citing annualized data.

Unfortunately for active home buyers and sellers, year-over-year data isn't all that helpful when making a real estate decisions. It's the month-to-month data that matters. Month-to-month changes in home prices are what defines a housing market. Month-to-month is what sets the tone for contracts and negotiations on a purchase.

The rosier, annualized data published this past week just doesn't capture the reality of what was the February 2010 market.  And even then, the data is somewhat useless because it's from February and May will be upon us next week.

Case-Shiller is on a 2-month lag -- hardly reflective of the "right now" of real estate.

When you're looking for real estate data that actionable, consider using sources that are more "real-time". A real estate agent may be the right place to start.  Because for all the data that Case-Shiller and the other housing indices collect, it can never be as relevant to your individual needs as a well-executed, timely market analysis.

Housing Starts Data Hints That Housing Will Expand Even After The Tax Credit Expires

After a strong March showing and a surprise upward-revision for February, Housing Starts are, once again, trending better.

It's yet another signal that the housing market nationwide is stabilized.

A Housing Start is a new home on which construction has started and, over the last 6 months, home builders are averaging one half-million starts per month.

This marks the highest 6-month average since 2008 and a reading one-fifth percent better from 12 months ago.  Revisions to prior data have all been higher, too.

Even more interesting, though, is that the number of newly-issued building permits is exploding. Permits were up more than 5 percent last month and have climbed back to the levels of late-2008.

Housing permits are an important data point in housing because permits are precursors to actual housing starts.  According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance.

Therefore, because March's housing permits increased, we should expect Housing Starts to continue to rise into the early months of summer.

This, too, reflects well on housing because the federal home buyer tax credit won't be in existence this summer. The simple fact the homes are being built now shows that housing is likely to expand even after the tax credit expires.

Non-military members must be under contract by April 30, 2010 and closed by June 30, 2010 in order to claim up to $8,000 in federal tax credits.

Home Cooking - Granola

This granola recipe is not only low in both fat and sugar, but it is extremely cost effective. In terms of taste, I find this granola to be spectacular. Make it on the weekend when you have time, and eat it for breakfast or as a snack throughout the week.

Orange, Cranberry and Almond Granola (makes 5 1/2 cups granola)

3 C old-fashioned rolled oats

1/4 C wheat germ

1/4 C flax seeds

1/4 C unsalted and shelled sunflower seeds

1/2 C almond slivers

1/2 C pecan pieces

3/4 C dried cranberries

1/3 C fresh squeezed orange juice

3/4 C honey

1 Tsp orange zest

1 1/2 Tsp vanilla extract

1 Tsp almond extract

1/3 C canola oil

Preheat oven to 325 degrees.



In a small saucepot, combine orange juice, honey, orange zest, vanilla, almond extract and canola oil. Heat over a low flame just until the honey melts and all the ingredients are incorporated.



In a large mixing bowl, combine oats, wheat germ, flax seeds, sunflower seeds, almonds and pecans.



Pour the orange juice mixture over the oat mixture and mix until everything is well combined.



Spread the oats in a thin layer on a greased cookie sheet and bake for 15 minutes. Remove from the oven and gently stir the granola. Bake for another 15 minutes. Add the cranberries to the granola, gently mix and bake for an additional 10 minutes.



Remove the granola from the oven and allow it to cool completely. Transfer it to an airtight container or re-sealable bag and enjoy!

How Iceland's Volcanoes Are Helping Mortgage Rates Fall

Mortgage rates and home affordability have improved lately, thanks to an unlikely ally -- Mother Nature.

In the 7 days since Iceland's Eyjafjallajökull erupted, ash clouds have grounded planes, disrupted businesses, and stranded exports in warehouses worldwide.

It's a drag on commerce that's spilled over onto Wall Street. As experts debate the potential for future seismic activity, traders are taking some of their investment risk off the table. 

In trading circles, it's called "safe haven buying". When the market gets cloudy, investors often move their cash into relatively safe assets.  This includes government-backed securities -- mortgage-bonds among them.

Demand for bonds rise, pushing up prices and driving down rates.

Conforming and FHA mortgage rates touched a 3-week low earlier this week.

Volcanic eruptions and like natural disasters remind us: mortgage rates change for all sorts of reasons. Some we can predict, most we cannot. There's literally thousands of influences on the U.S. mortgage market.

If you've been shopping for a home or floating a mortgage rate, luck's been on your side. Mortgage rates have fallen post-Eyjafjallajökull. However, as ash clouds dissipate and business resumes worldwide, investors will regain their collective appetite for risk and safe haven buying will reach its natural end.

When that happens, mortgage rates will rise.

Therefore, use the seismic uncertainty to your advantage.  Consider locking your mortgage rate sooner rather than later -- while rates are still low.

A Simple Explanation Of The Federal Reserve Statement (April 28, 2010 Edition)

Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged within in its current target range of 0.000-0.250 percent.

In its press release, the FOMC noted that, since March, the U.S. economy "has continued to strengthen" and that the jobs markets "is beginning to improve".  This is a step up from the last meeting after which the Fed said jobs were "stabilizing". 

It also reiterated that business spending "has risen significantly".

Today's statement marks the 7th straight press release in which the Fed shows optimism for the U.S. economy. Furthermore, the Fed has now closed all but one of the programs it created to support markets during last year's financial crisis.

Threats remain to growth, however. The Fed fingered a few:

1. Employers are reluctant to hire new workers
2. High unemployment threatens consumer spending
3. Consumer credit (still) remains tight

Also in its statement, the Fed re-acknowledged its plan to hold the Fed Funds Rate near zero percent "for an extended period".  This was expected.

Overall, the statement's tone was positive and the Fed noted that inflation is within tolerance. 

Mortgage market reaction has been muted thus far. Mortgage rates are unchanged post-FOMC.

The FOMC’s next scheduled meeting is a 2-day affair, June 22-23, 2010.  The 55-day span between meetings will be the FOMC's longest of 2010.

The Fed Adjourns From A 2-Day Meeting Today And What It Means For Mortgage Rates

The Federal Reserve adjourns from a scheduled, 2-day meeting today.  It's one of 8 scheduled Fed meetings for 2010.

Upon adjournment, Fed Chairman Ben Bernanke & Co. will release a formal statement to the market. In it, the Fed is expected to announce "no change" in the Fed Funds Rate.

The Fed Funds Rate is currently in a target range of 0.000-0.250 percent.

The Fed Funds Rate is an inter-bank lending rate. It's also the basis for Prime Rate, a consumer interest rate on which credit card payments are based, among other consumer loans.  Prime Rate is equal to the Fed Funds Rate + 3 percent.  Credit card rates, therefore, will likely stay flat today, too.

Mortgage rates, however, should change.  Possibly by a lot.  The 30-year fixed mortgage does not correlate with the Fed Funds Rate (as shown in the chart at right).

The reason mortgage rates will change today is because, in its statement, the Federal Reserve will highlight vrious parts of the economy, identifying strengths, weaknesses and probable threats to growth. 

These observations influence investors with a stake in bond markets and future returns and, with Wall Street on edge right now -- unsure of whether recent economic growth is a longer-term trend or a short-lived blip --  mortgage rates could shoot higher or they could drop, depending on how traders interpret the Fed.

It's a difficult time to be shopping mortgages.

Further complicating matters is Greece's recent debt downgrade to junk status. A small contagion fear is budding worldwide and, as a result, the flight-to-quality has picked up steam. Mortgage rates are down because of it but could reverse higher at any moment.

Therefore, if you're actively shopping for a mortgage today, it may be prudent to lock your rate ahead of the Fed's announcement and any major market reversal. Mortgage rates may fall today, but there's very little room for them to fall.  This is, however, a lot of room for them to rise.

The Fed adjourns at 2:15 PM ET.  Call your loan officer to lock your rate.

Fight Your Real Estate Property Tax Bill Without A Lawyer

More than 60 percent of U.S. homes are "over-assessed", says an industry trade group. Homeowners pay more in property taxes than they otherwise should have to.  You might be one of them.

Have you considered fighting your real estate tax bill?

In this 4-minute piece from The Today Show, you'll learn:

• When to file your tax bill dispute for the best chances of winning
  
• How to pull your "property card" and check for tax bill-raising errors
  
• What to do if the taxing authority turns down your request

Most importantly, you'll learn that don't need to hire an attorney to fight your tax bill.  You just need to be prepared.  Do your research and make your case. It's estimated that nearly half of all contesting homeowners are successful.