After a modest decline last month, existing-home sales bounced back in September to their highest annual pace of the year, according to the National Association of Realtors®. All major regions except for the Midwest experienced gains in September.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.4 percent to a seasonally adjusted annual rate of 5.17 million in September from 5.05 million in August. Sales are now at their highest pace of 2014, but still remain 1.7 percent below the 5.26 million-unit level from last September.

Lawrence Yun, NAR chief economist, says the improved demand for buying seen since the spring has carried into the fall. “Low interest rates and price gains holding steady led to September’s healthy increase, even with investor activity remaining on par with last month’s marked decline,” he said. “Traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter.”

As reported by the AP, new rules adopted yesterday by six federal agencies include the removal of a big stumbling block for would-be borrowers: the 20 percent down payment if a lender didn’t hold at least 5 percent of the mortgage securities tied to those loans on its books.

According to the AP article, which appeared on abcnews.com, the final rules released Tuesday will include the more relaxed requirement that borrowers not carry excessive debt relative to their income. The board of the Federal Deposit Insurance Corp. voted 4-1 Tuesday to adopt the rules, and the Federal Reserve is scheduled to vote today, along with four other agencies.

According to Mel Watt, director of the Federal Housing Finance Agency, “Finalizing this rule represents a major step forward to providing greater certainty to the housing finance market and paves the way for increased participation by the private sector. Aligning the Qualified Residential Mortgage standard with the existing Qualified Mortgage definition also means more clarity for lenders and encourages safe and sound lending to creditworthy borrowers. Lenders have wanted and needed to know what the new rules of the road are and this rule defines them.”

Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates hitting new lows for the year as 10-year bond yields briefly dipped below 2 percent. At 3.97 percent the average 30-year fixed rate is at its lowest level since the week of June 20, 2013 when it averaged 3.93 percent. This was also the last time the 30-year fixed averaged below 4 percent in the PMMS until last week.

"Mortgage rates were down sharply following the decline in the 10-year Treasury yield for the second straight week,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “Rates are at their lowest levels since June 2013 amidst continued investor skepticism regarding the precarious economic situation in Europe."

The 30-year fixed-rate mortgage (FRM) averaged 3.97 percent with an average 0.5 point for the week ending October 16, 2014, down from the previous week when it averaged 4.12 percent. A year ago at this time, the 30-year FRM averaged 4.28 percent.

In our last segment, I reviewed whether homeowners should consider replacing or making their front door more energy efficient. In this segment, we'll continue our conversation with Brad Johnson, a VP with door and hardware maker Therma-Tru Corp.

Johnson says if it becomes apparent that a door needs to be replaced, homeowners should consider one made of fiberglass. He says a solid fiberglass door is up to four times more energy efficient than a solid wood door, plus the homeowner gets the benefits that fiberglass has to offer, including resistance to rot, rust, dings and weather.

Another factor to consider is what's on the inside of the door. For instance, Therma-Tru uses dense polyurethane foam used in their fiberglass door cores to help their doors achieve high thermal performance values.

With all that goes into constructing a new house, building a dream home is not for the faint of heart. Undoubtedly, one of your biggest considerations will be whether to build on a developed or undeveloped plot. There are advantages to both: because the home is new, it will likely boast modern features and energy efficiency, and be built to code and secured with the builder’s warranty. Not a bad deal, considering the amount of home inspection horror stories out there.

Because the terms “lot” and “land” are often used interchangeably, it’s important to note that for the purposes of this blog, “lot” will refer strictly to developed properties divided up by builders (i.e., located in subdivisions), and “land” will refer to any undeveloped piece of property.

So, lots vs. land – which is it going to be? Weigh the pros and cons below.

Lots: The Pros


• Price advantage and foreseeable price appreciation

• Established roadways, either maintained by the municipality or by homeowners

• Water/sewer provided

• Electric, phone and cable lines wired

• Builder disclosure of land concerns, such as drainage and soil

• HOA fees typically include lawn care, trash pick-up and other community maintenance

A:  Because adjustable rate mortgages, or ARMs, fluctuate with the market, they offer less stability than fixed-rate loans.  If an ARM is adjusted upward, monthly payments will increase, and for a lot of people that can be too big a risk to take.  On the other hand, should rates drop dramatically, homeowners can reap the benefits of lower rates without refinancing, thereby saving thousands of dollars.

Lenders first introduced ARMs in the 1980s when interest rates soared into the double digits, forcing many people out of the home buying market.  They tied the rate to a variable national index, such as U.S. Treasury bills.

Homeowners can raise the basis or cost in their home by money spent on capital improvements. The benefit is that it will lower their gain and may save them taxes when they sell their home.

Improvements must add value to your home, prolong its useful life or adapt it to new uses. Repairs are routine in nature to maintain the value and keep the property in an ordinary, operating condition.