When real estate news is reported on television or in the papers, it’s usually told as a national story. Unfortunately, stories like these aren’t helpful for everyday Americans because real estate is not a national market.

Real estate is local.

The graph above was used by Fed Chairman Ben Bernanke in a speech to Columbia Business School earlier this week. Using data from conforming mortgage fundings, it shows the change in home prices from year-to-year on a county level.

Any county not in red increased in value.

In other words, contrary to what reporters tell us, real estate is retaining its value just fine nationwide. Aside from a few counties and states, most areas appreciated.

Graphics like this put important real estate issues in perspective. Home values may falling precipitously in some areas, but those neighborhoods represent just a fraction of the country overall.

In most regions, home values are up.

Four times annually, the Federal Reserve surveys 84 different banks about general banking conditions.

One of the survey questions asks about current mortgage lending standards and whether they are loosening or tightening.

The chart at right is from the April 2008 survey and it illustrates what we already know: It’s getting tougher and tougher to get approved for a home loan.

Some of the areas in which mortgage guidelines are tightening are well-known:

• More thorough income documentation
• Higher credit score requirements
• More “money in the bank” post-closing

Some areas are less well-known:

• More scrutiny of prior delinquencies
• Strict review of appraised values

Overall, getting a mortgage approval from a bank is more difficult than in months past and the tightening trend is expected to continue throughout the rest of the credit cycle.

No “class” of buyers is immune, either — not even the “prime” ones.

Home prices may fall going forward but stricter mortgage guidelines means that fewer home buyers will be able to take advantage. If you’re unsure about your credit profile, check with your loan officer to see how additional restrictions could impact your ability to purchase (and finance!) a home.

(Image courtesy: Federal Reserve)

The ubiquity of “free” credit reporting services like FreeCreditReport.com, TrueCredit.com, and AnnualCreditReport.com have helped breed a new generation of credit-aware Americans.

Because credit ratings have more importance to everyday life than in years past, this is a welcome development. For example:

• Lenders use credit ratings to determine borrowing rates
• Insurers use credit ratings to determine premiums
• Employers use credit ratings to make hiring decisions

Unfortunately for Americans, though, not all credit reports are created equal. And when it comes to actually applying for credit in the form of a new credit card or mortgage, the free reports are worth precisely what they cost.

This is one reason why home buyers should have their credit reviewed by a mortgage lender as soon as possible in the home buying process — the free reports offered by the major credit bureaus may be misleading and incomplete.

Free credit reports are useful for identifying identity theft and reviewing active accounts but do very little to help a potential creditor gauge your creditworthiness.

As the chart shows us, each industry’s creditors has a way they like to do business and that way is the “standard” way.

A well-known “Sell Your Home Quickly” tips is to clean and de-clutter. A home with visual “space” appears more roomy to potential buyers.

Another way to create openness is with bright lighting throughout your home.

There are two simple and very inexpensive ways to brighten your home for a showing:

1. For daytime showings, open all drapes and blinds so the maximum amount of sunlight comes into your home
2. For evening showings, turn on every light in every room in the house

A well-lit home not only brightens the mood of potential buyers, but it helps your home to make a strong first impression as well. And if you’ve ever felt gloomy on a rainy day, or exceptionally happy on a bright and sunny day, you understand the psychological power of light on a person’s mood.

So, after cleaning your home to make it showing-ready, replace your light bulbs, turn on the lights, and open the blinds. If your windows are dirty, clean them.

Help prospective buyers to see your home in a favorable “light” and you’ll be more likely to sell your home quickly.

According to the Bureau of Labor Statistics, the U.S. economy shed 20,000 jobs in April 2008. The labor force now counts at 146 million people as employed.

Normally, a loss of jobs would foretell economic weakness and would be a good thing for mortgage rate shoppers. Today, though, traders had been expecting a larger loss of 70,000 jobs.

In other words, today’s jobs report looks surprisingly strong.

The stock market is now rallying on optimism that “the worst is over” for the U.S. economy and evidence supporting the Federal Reserve’s remarks that its rate cuts were starting to take hold.

The stock market’s gains are the bond market’s losses.

Mortgage rates are up today because the cash that is fueling the stock market is coming from the sale of all types of bonds — including mortgage bonds.

This is unwelcome news for people doing mortgage comparisons today, or buying a home this weekend.

Rates should be higher Monday than they are today. In general, adjustable-rate mortgages are increasing more than fixed-rate mortgages.