Home builder confidence in the market for newly built, single-family homes rose for the fourth consecutive month, reaching an eight-year high, the National Association of Home Builders reported recently.

The NAHB Housing Market Index rose by three points to 59 for August, the highest level since 2005; any number over 50 indicates that more builders view conditions as good than poor. The component gauging current sales conditions rose by three points to 62, while the component gauging sales expectations in the next six months rose by one point to 68 and the component gauging traffic of prospective buyers held unchanged at 45.

NAHB said all but one region saw a gain in its three-month moving average HMI score in August. The Midwest and West each posted six-point increases, to 60 and 57, respectively, while the South posted a four-point gain to 54 and the Northeast held unchanged at 39.

A: Sometimes. But it is a complicated process and a lot will depend on the lender.

This process is called a “short sale,” which occurs when a lender agrees to write off the portion of a mortgage that's higher than the value of a home. But, usually, a buyer must be willing to purchase the property first.

A short sale may be more complicated if the loan has been sold in the secondary market.  Then the lender will need permission from Freddie Mac or Fannie Mae, the two major secondary-market players.

If the loan was a low down payment mortgage with private mortgage insurance, the lender also will need to involve the mortgage insurance company that insured the low down payment loan.

The short sale can keep the homeowner from landing in bankruptcy or foreclosure. But it is not an easy procedure to approve, and it involves as much, if not more, paperwork than an original mortgage application.

Instead of proving your credit worthiness and financial stability, you must prove you are broke. And any remaining difference between your home's value and the balance on your mortgage is considered a forgiveness of debt, which usually means it is taxable income.

Nationwide housing affordability slipped several notches as recovering markets witnessed significant firming of home prices in the second quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), released recently. In all, 69.3 percent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the U.S. median income of $64,400. This is down from the 73.7 percent of homes sold that were affordable to median-income earners in the first quarter, and the first time that the measure has fallen below 70 percent since late 2008.

“Housing affordability has been hovering near historic highs for the past several years, largely due to exceptionally favorable mortgage rates and low prices during the recession,” observed NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Now that markets across the country are recovering, home values are strengthening at the same time that the cost of building homes is rising due to tightened supplies of building materials, developable lots and labor.”

“Rising home prices signal the improving health in housing markets, and the median price of all new and existing U.S. homes sold in this year’s second quarter, at $202,000, was well ahead of the second quarter 2012 median price of $185,000,” observed NAHB Chief Economist David Crowe. “Together with rising mortgage rates, this contributed to affordability slipping to the lowest level in more than four years. Such movement would be less concerning were it not for ongoing discussions regarding potential changes to the mortgage interest deduction and federal support for the secondary mortgage market, both of which play enormous roles in keeping homeownership affordable.”

After the housing crash in 2008, the real estate market left risky loan programs behind and instead turned to safer ways to finance homes. Although there are fewer options, there are still many things to consider before choosing a program that’s right for your situation. Don Frommeyer, CRMS, president of the National Association of Mortgage Brokers (NAMB) weighs in on the differences among mortgage loan programs.

“Although there are less options to choose from, mortgage loan programs are safer and more sensible than they were a few years back,” says Frommeyer. “When you go to a mortgage broker, they should be able to pinpoint what will be best for your situation. There are advantages and disadvantages to each type of loan depending on the circumstances.”

Below is a breakdown of three types of loan programs borrowers often come across:

Fixed Rate: A Fixed Rate Mortgage allows borrowers to pay an equal monthly payment for the duration of the loan, which is typically 15 or 30 years. The interest rate stays the same during the life of the loan, but during the first few years only a very small portion actually pays off the principal. Loan payments are typically higher as is the interest rate, but homeowners can refinance if interest rates go down. Fixed rate mortgages are typically recommended for homebuyers who plan on staying in their house for more than ten years.

A: There are a few things to consider, including cost, individual needs, and what will add value down the road.  Also important: your emotional attachment to the existing home.

As designer and builder Philip S. Wenz, the author of Adding to a House: Planning, Design & Construction, notes, an addition is much cheaper than building a new home and can offer a “new” home without the heartache of moving.

Other considerations:

The U.S. Department of Housing and Urban Development (HUD) recently published a new proposed rule to Affirmatively Further Fair Housing (AFFH) in the Federal Register and made available background materials and a prototype geospatial tool. AFFH refers to the 1968 Fair Housing Act’s obligation for state and local governments to improve and achieve more meaningful outcomes from fair housing policies, so that every American has the right to fair housing, regardless of their race, color, national origin, religion, sex, disability or familial status.

“This proposed rule represents a 21st century approach to fair housing, a step forward to ensuring that every American is able to choose to live in a community they feel proud of – where they have a fair shot at reaching their full potential in life,” says HUD Secretary Shaun Donovan. “For the first time ever, HUD will provide data for every neighborhood in the country, detailing the access African American, Latino, Asian, and other communities have to local assets, including schools, jobs, transportation, and other important neighborhood resources that can play a role in helping people move into the middle class. Long-term solutions will involve various strategies, such as helping people gain access to different neighborhoods and channeling investments into underserved areas. ”

The proposed rule was drafted in response to a 2010 GAO report and numerous requests from stakeholders, advocates, and HUD program participants seeking clear guidance and technical assistance. The proposed rule refines existing requirements so the individuals, organizations, and state and local governments implementing HUD programs better understand their requirements under the Fair Housing Act and have the tools they need to Affirmatively Further Fair Housing, ensuring that every American has the opportunity to live in the community of their choice without facing discrimination.

When it comes to home maintenance and repairs, many homeowners opt for the DIY approach. Not only is it a fun way to get your hands dirty, but it can save money on the expenses of hiring a professional. However, many DIYers neglect to fully prepare themselves for accomplishing the task at hand. This results in surprisingly common mistakes that could easily be avoided. So before you choose to DIY something in your own home, take a look at our list of common mistakes homeowners make and learn what you can do to prevent them from happening to you!

Electrical Repair

When it comes to DIY around the house, there's one area that should more often than not be left to the professionals—electrical repairs. According to Root Electric, anywhere from 4,000-6,000 people are injured each year from electric accidents, with a high percentage coming from those performing DIY electric repair attempts.

Neglecting Safety Tips

The ongoing housing recovery coupled with improvement in both consumer confidence and the labor market are expected to boost economic growth in the second half of the year, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group. The latest jobs report showed steady year-to-date job creation and measures of consumer confidence are at or near recovery highs. Furthermore, despite a sharp increase in mortgage rates during the past two months, home sales have held up and home prices have continued to post gains, helping to keep the economy on a positive—albeit modest—growth path in 2013.

“We are keeping a very close eye on the effect of rising mortgage rates on the housing market and the economy, but our July forecast is little changed from last month,” says Fannie Mae Chief Economist Doug Duncan. “We continue to see growth in housing, partly due to an increase in existing home sales as buyers choose to act while rates remain near historic lows. Consumer attitudes are improving amid a strengthening employment sector and we should begin to see a moderate pickup in consumer spending. Overall, we expect economic growth to come in at 2.0 percent in 2013, but further momentum later this year should help carry growth in 2014 to an above-par pace of 2.6 percent, the strongest since 2005.”

As more people choose to stay in their current homes longer, Americans are diving into large remodel projects. Forty percent of homeowners plan to remodel or build an addition to their existing home within the next two years, with kitchen and bathroom projects remaining the most popular remodeling jobs, according to the 2013 Houzz and Home Survey.

Home remodeling for the long term can be challenging, as newer designs may clash with the existing style of the home. The key to a successful remodel is to choose elements that will create a cohesive design throughout, yet remain fashionable and functional well into the future.

"Whether it's upgrading their existing home or renovating a newly purchased one to fit their long-term needs, homeowners are settling in and want quality products that will look great, provide design flexibility and perform well over time," says Andy Wells, vice president of product design, MasterBrand Cabinets, Inc.

Home prices have risen at a double-digit rate since early spring. The Case-Shiller reading was up 11 percent in March compared to a year earlier, while the NAR median price was higher by roughly the same amount in April. This robust appreciation appears nearly certain to last for the remainder of 2013 and the reason is basic economics: increasing demand and tight supply.

Data on pending contracts and closed sales are at five-year highs, while data on homebuyer traffic activity (an element of the REALTORS® Confidence Index) is almost moving off the charts. Multiple bids are increasingly common in many local markets. With so few homes on the market – as evidenced by a 13-year low inventory of existing home listings and a 50-year low for newly constructed home inventory – buyers are increasingly forced to bid with an escalation clause in hopes of winning a home.

The rise in housing demand in conjunction with the improving economy is not surprising. It was bound to happen after an unprecedented five consecutive years of deeply suppressed household formation – less than half the normal rate at 500,000 new households per year from 2007 to 2011. But the renewal of household formation in 2012 and 2013 induced by six million net new job additions since early 2010 has rejuvenated demand for home purchases and rentals. The rebound in household formation will likely continue for several years, perhaps averaging 1.2 to 1.3 million per year over the next five years. Even if that growth is not realized, a return to the historic average of 1 to 1.1 million additions per year implies healthy future demand for home buying and renting.