As a twist on the typical “Best Places To Live” surveys, CNN Money released its 2008 “Best Places to Live and Launch“.

The rankings rate the business friendliness of 296 Census-designated metro areas, and then identify that area’s town that best combine business and pleasure for its residents.

In 2008, the Top 10 Live and Launch cities are:

1. Bellevue, WA (pop. 111,608)
2. Georgetown, TX (pop. 37,963)
3. Buford, GA (pop. 13,576)
4. Marina del Rey, CA (pop. 8,891)
5. Bethesda, MD (pop. 59,475)
6. Portland, OR (pop. 535,421)
7. Denver, CO (pop. 555,932)
8. Charlotte, NC (pop. 596,123)
9. Fort Worth, TX (pop. 595,062)
10. Franklin, MA (pop. 29,642)

To view the complete, 100-city listing, visit CNNMoney.com.

When mortgage rates change rapidly, it’s a fiscal challenge to shop for a home and/or home loan.

Lately, mortgage rates have been especially volatile, mirroring the wild moves of the stock market.

Here’s how up-and-down stock markets have been in 2008: Through last week, the S&P 500 Index changed more than 1 percent per day on 28 separate days.

This represents 52 percent of all trading days and is the most volatile measurement since 1938.

Mortgage financing is impacted by stock market changes because when money flows into stocks, it tends to come from bond markets. And, when money leaves stocks, it tends to “gets parked” in bond markets.

Because mortgage bonds set mortgage rates, you can understand how stock market volatility can make it difficult to predict what home loan payments might look like.

Volatility is expected to continue for the next several quarters so if you see a mortgage rate you like today, consider locking it right away — it probably won’t last long.

Source
U.S. Stock Volatility Climbs to Highest in 70 Years, S&P Says
Jeff Kearns
Bloomberg, March 20, 2008
http://www.bloomberg.com/apps/news?pid=20601213&sid=av840GLwE4UA&refer=home

Each month, the Commerce Department and the National Association of REALTORS release national housing data.

The former’s release is called the New Residential Sales report and the latter’s is called the Existing Home Sales report.

Both reports highlight the “median sales price”, the point at which half of the homes in the U.S. sold for more, and half sold for less.

Last month, the median sales prices were as follows:

• Existing homes: Down 8.2 percent
• New homes: Down 2.7 percent

The very definition of “median”, however, makes this data point useless for national housing statistics.

If a large amount of homes are sold in regions where home prices are traditionally high, the median sales price will trend higher.

If a large amount of homes are sold in regions where home prices are traditionally low, the median sales price will trend lower.

Again, all that the median sales price tells us is the price point at which half the homes in the country sold for more, and half sold for less.

Real estate is a local phenomenon and so grouping the entire country’s supply of homes together makes little sense. A home in San Francisco has little to do with a home in Omaha.

To get a true gauge of your local market, talk to a real estate agent that knows the local market well. You’ll not only get meaningful statistics about a neighborhood, but you’ll get good insights, too.

Consumer Confidence fell to its lowest point in three years and anybody who watches the evening news can understand why.

Each day, news programs barrage Americans with tales of economic woe and American Opinion is largely shaped by the media.

After enough time, the reporting becomes a self-fulfilling prophecy.

But, in the Consumer Confidence report, there was a choice piece of data that isn’t getting reported by the news programs and it’s a rather important piece.

Although fewer consumers expect to buy automobiles and appliances over the next six months, those with plans to buy homes is actually higher by 14 percent.

In other words, despite weakening confidence in the economy, an increasing number of Americans are planning to buy homes this season and next.

Consumers may be motivated to buy this year by a number of factors:

• Lower home prices nationwide
• Affordable mortgage rates
• Fear that mortgage products will require larger downpayment

Regardless, the media is choosing to ignore this part of the story. Instead, the news programs are focusing on the negatives – just look at the headlines.

It’s no wonder that confidence is down — bad news is all the American Public tends to hear.

Each quarter, the Census Bureau releases the Homeowner Vacancy Rate, a housing statistic the measures the percentage of homes for sale that are vacant.

A home listed for sale may be vacant for several reasons including:

1. The home has been foreclosed and the owner has moved out
2. The home seller moved into a new home and not sold his former home
3. The home was a rental property and is being sold without a tenant

In Q4 2007, the Homeowner Vacancy Rate matched its all-time high of 2.8 percent.

The statistic can be misleading, however, because Homeowner Vacancy Rates appear to be seasonal and the fourth quarter is more prone to high figures.

As evidence: In 6 of the last 7 years, Q4 posted higher vacancy rates than for the preceding three quarters.

Vacancy rates may increase in the fall because homesellers without a “need” to sell tend to take their properties off the market during the Holiday Season. That leaves an over-weighting of empty homes for sale — precisely what the Homeowner Vacancy Rate measures.

For an interactive version of the chart above, visit the Wall Street Journal Online.

Source
Housing Markets: A Vacant Look
The Wall Street Journal Online
March 21, 2008
http://online.wsj.com/public/resources/documents/retro-VACANCY08.html

Some home improvement projects are just too big to be tackled alone.

Before you start searching Web sites for handymen, though, watch this 3-minute news piece.

Large, online, third-party search services are often reputable (including the company highlighted in the video), but, for peace of mind, the best place to find contractors is from people with first-hand experience.

If you’re in need of help for anything home-related, reach out to me via phone or email. I’m happy to provide quality referrals to handymen and/or contractors anytime.

Since December 2007, mortgage lending guidelines have changed very quickly and often without notice.

Some of the more well-known changes include:

• Broad restrictions on stated income home loans
• Broad restrictions on 100 percent financing
• “Risk-based fees” for credit scores under 740

Some of the lesser-known restrictions relate to property type and occupancy status as well as debt-to-income levels and mortgage payment histories.

Because of the number of changes and their collective scope, home buyers should be prudent and get re-pre-approved for their home loan.

Even if you last spoke with your loan officer four weeks ago, it’s important to know how market changes could ultimately impact your home loan approval.

The market really is that different. Talk to your loan officer about a re-pre-approval today.

The Fed lowered the Fed Funds Rate by 0.750% to 2.250% yesterday.

Because it is tied to the Fed Funds Rate, Prime Rate also fell by 0.750% yesterday. Prime Rate is now to 5.250%.

Holders of home equity lines of credit and credit card debt benefited from the change and will see lower interest costs in next month’s statements.

Mortgage rate shoppers didn’t.

In the statement above — as explained by The Wall Street Journal — the Fed expresses a growing concern of inflation from rising commodity prices such as oil. In part, this caused the mortgage bond market to sell off immediately following the press release’s issue.

Mortgage rates rose close to a quarter-percent yesterday.

The Federal Open Market Committee’s statement leaves the possibility of future Fed Funds Rate cuts open. The FOMC’s next scheduled meeting is a two-day affair April 29-30, 2008.

Source
Parsing the Fed Statement
The Wall Street Journal Online
March 18, 2008
http://online.wsj.com/internal/mdc/info-fedparse0803.html

The Federal Open Market Committee meets today and will issue a press release in addition to cutting the Fed Funds Rate at 2:15 P.M. ET.

The verbiage of the press release will be as widely watched as the rate cut itself because markets are curious about how far the Federal Reserve will go to lessen the impact of an economic recession.

With every Fed Funds Rate cut, recession becomes less likely, but the other side of the equation is that the probability of long-term inflation grows.

Like recession, inflation can be bad for the economy, too.

The Fed Funds Rate now stands at 3.000% this morning and the FOMC is expected to lower it by 0.750% or more this afternoon.

Mortgage rates are rising today because cuts to the Fed Funds Rate weaken the U.S. dollar which, in turn, makes mortgage re-payments less valuable to investors.

Springtime means Spring Cleaning and VideoJug’s “How to Clean a Window” teaches you the right way to get your windows sparkling clean and clear.

The 5-minute video lesson explains:

• Why it’s better to clean windows on a cloudy day
• Why to wipe windows horizontally outside, and vertically inside
• Why natural sponges are preferred to man-made sponges for window cleaning

VideoJug features more than 100 videos on keeping a clean home. For Spring Cleaning, it’s a terrific place to start.

There is no such thing as a “national real estate market”.

Real estate is local.

We know this is true because even cities don’t have their own real estate market.

This chart shows how home prices have diverged across adjacent zip codes over the last 12 months.

Some influencing factors:

• School systems
• Infrastructure
• Proximity
• Supply of homes

Stories about “The U.S. Real Estate Market” are irrelevant. In each city in America — and on a street by street level — real estate markets can be vastly different.

When mortgages began to sour last Fall, Fannie Mae and Freddie Mac instituted “loan-level pricing adjustments”.

The concept is basic: For mortgage applicants with less-than-ideal credit profiles, mortgage pricing is adjusted to compensate for the added risks.

It’s still a conforming loan, but with adjustments.

Effective March 6, though, Fannie and Freddie’s definition of “high-risk” changed and the adjustments got much more expensive.

Some of the more impactful changes include:

• Regardless of credit score, cash out refinances above 75% loan-to-value are subject to price adjustments
• All LTVs greater than 60% are subject to price adjustments
• All 2-units will be adjusted by 0.500%, regardless of LTV
• All 3- and 4-units will be adjusted by 1.000%, regardless of LTV

If your mortgage application is a conforming loan destined for Fannie Mae or Freddie Mac, these adjustments may already be on your loan officer’s rate sheets but be sure to ask.

If the adjustments are built-in yet, consider whether your should lock your mortgage rate right away.

So, even though mortgage rates fell Wednesday, new Loan-Level Pricing Adjustments pushed the underlying payment higher for a lot of Americans.

The Unemployment Rate fell to 4.8 percent in February.

This is 0.1% lower than from January and that’s confusing to a lot of people; it’s been highly publicized that U.S. companies shed 63,000 jobs last month.

Americans are losing jobs at the same time that the Unemployment Rate is falling. Seem strange?

Well, it’s possible because the Unemployment Rate measures workers unemployed versus workers in the workforce.

The “jobs number”, by contrast, measures active workers collecting actual paychecks.

So, when the government reported that Unemployment Rates fell in February, it happened because the “workforce” figure used to calculate the unemployment was 644,000 less than the workforce figure from January.

644,000 people have left the workforce entirely. This not only includes those retiring, but the government specifically excludes Americans from the workforce that:

1. Hadn’t looked for a job in the last 4 weeks, or
2. Felt “discouraged” by their prospects and didn’t look for a job at all

And that’s why the Unemployment Rate fell in February even as companies were laying off workers — the total workforce size was reduced by more than the total number of jobs lost.

On paper, it looks like the jobs market may be improving but after a closer look, the opposite may be true.

Similar to real estate stories, there is always more to know than just what the headline says — you have to dig deeper to find out what the news really means and how it applies to you.

HGTV catalogs the Top 15 Home Improvements For Sellers, complete with narrarated, 90-second videos and the expected return-on-investment per project.

• Best Return: Minor Bathroom Remodeling
• Worst Return: Living Room Updates

Each locale in the country will get a slightly larger (or lesser) return on the HGTV-suggested projects. It’s not just a home improvement that matters, but a home improvement relative to your neighborhood.

Before starting work on a project, check with a real estate agent that knows your local market well to minimize the chances of starting a project that will yield little return.

See the entire 15 Home Improvement list on the HGTV FrontDoor Web site.

“Foreclosure” is the legal process by which a bank repossesses a home from a borrower and, according to RealtyTrac, 1 out of every 100 homes were in some stage of the foreclosure process in 2007.

This figure is astounding because foreclosure is expensive to both homeowners and banks. Both parties have an interest in avoiding foreclosure but the process has to start with the homeowner — banks are just too big to start it themselves.

Every mortgage statement has a 1-800 phone number on it. If you’re about to fall behind on your mortgage payments, make a phone call first. When you call the toll-free number, a customer service representative talk about your repayment options, or help you design a work-out plan to get your mortgage back to current.

Banks know that more than 80 percent of all foreclosures result from one of the following:

• Job loss/reduction in salary
• Medical issues
• Divorce
• Death

These are life events that draw compassion from banks. They understand that bad things can happen to people.

However, the other 20 percent of foreclosures are the result of an inability to sell, an unwillingness to pay, and budget mismanagement. These reasons are not as acceptable to the banks.

But when a homeowner fails to forewarn his lender of a missed payment, the lender assumes the worst. It puts the homeowner in the 20 percent category. This makes a work-out plan much less likely and can quickly lead to foreclosure and a loss of the home.

Lenders want to avoid foreclosure as much as homeowners do. If you’re a homeowner and you’re facing trouble with your mortgage payment, give your lender a call in advance and try to work it out.

If you never call, you can’t possibly get help.