Builder confidence in the market for newly built, single-family homes posted a solid, five-point gain to 46 on the National Association of Home Builders Housing Market Index (HMI) for November. This marks the seventh consecutive monthly gain in the confidence gauge and brings it to its highest point since May of 2006.

“Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country,” says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates.”

“While our confidence gauge has yet to breach the 50 mark -- at which point an equal number of builders view sales conditions as good versus poor -- we have certainly made substantial progress since this time last year, when the HMI stood at 19,” observes NAHB Chief Economist David Crowe. “At this point, difficult appraisals and tight lending conditions for builders and buyers remain limiting factors for the burgeoning housing recovery, along with shortages of buildable lots that have begun popping up in certain markets.”

Derived from a monthly survey that NAHB has been conducting for the past 25 years, the NAHB Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Two out of three of the HMI’s component indexes registered gains in November. The component gauging current sales conditions posted the biggest increase, with an eight-point gain to 49 – its highest mark in more than six years. Meanwhile, the component measuring sales expectations for the next six months held above 50 for a third consecutive month with a two-point gain to 53, and the component measuring traffic of prospective buyers held unchanged at 35 following a five-point gain in the previous month.

All four regions of the country posted gains in their HMI three-month moving averages as of November. The South posted a four-point gain to 43, while the Midwest and West each posted three-point gains, to 45 and 47, respectively, and the Northeast posted a two-point gain to 31. (Note, the HMI survey was conducted in the two weeks immediately following Hurricane Sandy and therefore does reflect builder sentiment during that period.)

For more information, visit www.nahb.org/hmi.

Pre-paid interest, sometimes called "points", is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence. When points are paid on a refinance, they are not a current deduction but have to be taken pro-rata over the life of the mortgage.

For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, deduction of $100 per year is allowed. When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.

Your tax professional needs to be made aware of any of these situations so that he can accurately reflect the deduction in your return. Currently, the most common situation is where homeowners may be refinancing their home for the second, third or even fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.

For more information, see points in IRS Publication 936; there is a section on refinancing in this publication. For advice considering your specific situation, contact your tax professional.

The U.S. Department of Housing and Urban Development (HUD) recently released its annual report to Congress on the financial condition of the Federal Housing Administration (FHA) Mutual Mortgage Insurance (MMI) Fund. In reporting on findings of the independent actuarial study, HUD indicates that while FHA continues to be impacted by losses from mortgages originated prior to 2009, this report does not directly affect the adequacy of capital balances in the MMI Fund.

The independent study found that as the housing market continues to recover, the capital reserve ratio of the MMI Fund used to support FHA’s single family mortgage and reverse mortgage insurance programs fell below zero to -1.44 percent. This represents a negative economic value of $16.3 billion. This does not mean FHA has insufficient cash to pay insurance claims, a current operating deficit, or will need to immediately draw funds from the Treasury. The need to draw on Treasury funds is determined not by the economic assumptions of this actuarial review but those used in the President’s FY 2014 budget proposal to be released in February, with a final determination on a potential draw made in September. Also, the actuary’s estimate of the Fund’s economic value excludes $11 billion in expected capital accumulation through the end of FY 2013. Finally, HUD’s report includes additional actions designed to contribute billions of dollars in added value to the MMI Fund over the next several years.

Fannie Mae is acting to ease the burden facing homeowners in the path of Hurricane Sandy through an expanded package of options for new and existing mortgages.

"Since 2009, Fannie Mae has responded to the credit crisis by providing approximately $3 trillion in liquidity to the mortgage market so that millions of Americans can buy homes, refinance their loans or rent affordable housing. In that time, we’ve helped approximately 1.3 million struggling borrowers avoid foreclosure," says Timothy J. Mayopoulos, president and CEO of Fannie Mae. “Now, we’re responding to another crisis by making sure that homeowners have options to manage their housing challenges in the aftermath of Hurricane Sandy. We want families to know that we are here to help them.”

Servicers may immediately grant a borrower who has been affected by Sandy relief for 90 days in order to determine the facts of their situation. Early next week, Fannie Mae will issue guidance to servicers to expand the options they can offer to homeowners. For any homeowner who has suffered damage to their home or experienced a disruption in income as a result of Hurricane Sandy, servicers are authorized to take the following measures:

• Extend forbearance for up to 12 months, where appropriate;
• Provide loan modifications, once the homeowner is able to resume monthly mortgage payments;
• Waive any late payment charges;
• Suspend credit reporting for any homeowner for whom relief is granted; and
• Delay the initiation of any foreclosure action to determine the condition of the property and the borrower’s employment and income status.

Fannie Mae is implementing a 90-day foreclosure sale suspension and a 90-day eviction suspension for properties located within FEMA designated disaster areas eligible for individual assistance (those areas can be found at http://www.fema.gov/disasters).

Additionally, Fannie Mae is adjusting its guidelines for disbursements of insurance proceeds to ensure that homes damaged by Sandy can be repaired more quickly.

Furthermore, Fannie Mae is taking steps to facilitate completion of mortgage loans that were in process when Sandy hit by accepting documents and maintaining pricing that were in place at the time of the storm. Underwriting and property valuation documents will now be valid for 180 days in areas affected by the storm. Underwriting documents, such as credit reports and income verification, are typically valid for 90 days. Property valuation documents, such as appraisals or DU Refi Plus™ field work waivers for HARP refinances, are typically valid for 120 days. Property valuations for short sales delayed due to Hurricane Sandy will be valid for 180 days instead of the usual 90 days.

For more information, visit http://www.knowyouroptions.com/ and www.fanniemae.com.

The Mortgage Bankers Association reported the seasonally adjusted delinquency rate fell 18 basis points during the third quarter of 2012 to 7.4 percent, erasing the 18 basis point increase from the previous quarter.

The lower delinquency rate was driven almost entirely by a sizable drop in the share of loans 90 or more days past due, which came in under 3 percent for the first time since 2008. In addition, the foreclosure inventory rate contracted 20 basis points to 4.07 percent, marking the largest quarterly percentage point decline in the history of the survey for this particular metric.

According to Mike Fratantoni, MBA’s Vice President of Research and Economics, the combination of lower 90+ day delinquency and foreclosure inventory rates is a positive for the housing market since it “indicates a significant drop in the shadow inventory of distressed loans.”

Foreclosure starts declined to 0.9 percent of all first-lien mortgages during the third quarter of 2012—the lowest reading since the end of 2007. A total of 38 states saw the foreclosure starts rate fall versus the second quarter of 2012 while 39 registered a decline compared to the third quarter of 2011.

In terms of the overall geographic concentration, Florida continues to account for nearly a quarter (23.4 percent) of all mortgage loans in foreclosure and when combined with California, New York, Illinois and New Jersey, these five states accounted for nearly 52 percent of all foreclosures and less than one-third of all mortgages. New Jersey had the highest rate of foreclosure starts during the quarter due to a large backlog of 90+ day delinquent loans entering the foreclosure process. Arizona and Nevada, states that had foreclosure start rates at least twice the national average as recently as two years ago, are now seeing only slightly above-average rates of new foreclosure activity.

View this article on the NAHB blog, Eye on Housing.

If your property has languished on the market since summer or fall, REALTOR® Rae Catanese has this uplifting news.

Catanese recently blogged that anyone shopping for a home during the holidays is most likely a serious buyer, and she wouldn’t sway people from listing their home for sale during the holiday season for several reasons.

She says typically there is less inventory on the market which will bring you more showings. The more showings you have the better chance of receiving an offer.

Bottom line, according to Catanese, is that you have less competition and may be able to get a higher price for your home than you would if people had more to choose from.

Also, your home and your neighbor’s home probably have more curb appeal decorated. Catanese believes the holiday season “gets people in the mood” to buy.

Since many people think about how their lives will change in the upcoming New Year, Catanese thinks buyers may be more likely to envision themselves starting a new life in a new home, and the decision to purchase could be less stressful.

In general, Catanese says people are more generous, happy, and friendly, which could make the negotiating process go a bit more smoothly in your favor.

Also, be flexible and prepared to show your home at a moment’s notice. People have less time during the holidays so you may wind up getting requests to show your home with very little time to prepare.

Buyers may also accommodate an early closing with a rent back or extended occupancy allowing the seller to stay in the property until after the holidays are over.

When marketing your house during the holiday season, you may have fewer actual showings, but the buyers may be more qualified and motivated. Sellers will have less competition, possibly resulting in a quicker sale and higher sales price.

Hilton Head Island Area Market Stats (MLS)*

• Median Price - Hilton Head Island Detached Homes YTD: -1.9%
• Median Price - Hilton Head Island Villas/Condos YTD: +12.5%
• Median Price - Mainland Detached & Villas/Condos YTD: +5.3%
• Median Price - Area wide Detached & Villas/Condos YTD: -1.2%
• Housing Inventory: 2,573 Homes for Sale - 9.0 Months Supply (-32.6%, trending down)
• Closed Sales YTD: 2,991 (+19.4%)
• Pending Sales YTD: 2,751 (+22.1%)

     *Current as of October 2012. Next update for November to be released mid- to late-December

To see both reports in full, complete with graphs, click on

• Monthly Indicators
• Housing Supply Overview

Monthly Indicators

It's been a giant year for the housing market – and for sports teams named Giants. As we round out the remaining two months of the year, let's recap. Most markets shed listings, resulting from strong sales and sluggish seller activity. There has been a general easing of foreclosures and short sales, meaning distressed listings are dragging prices down less than in recent years. So it's both about market fundamentals and market composition.

New Listings in the Hilton Head region decreased 4.8 percent to 380. Pending Sales were up 23.1 percent to 293. Inventory levels shrank 19.4 percent to 2,573 units.

Prices were fairly stable. The Median Sales Price decreased 1.7 percent to $235,000. Days on Market was down 6.2 percent to 130 days. Absorption rates improved as Months Supply of Inventory was down 32.6 percent to 9.0 months.

The economy is growing but at a glacial pace, and economic growth in 2013 is expected to outpace 2012. Mortgage rates are expected to remain near historic lows through 2015, rents are expected to rise due to low vacancy, and financial situations in Europe, China and elsewhere, believe it or not, have an effect on your local housing market.

House Supply Overview

With the race to 2013 underway, it's hard to resist the temptation to see just how 2012 is stacking up. For the 12-month period spanning November 2011 through October 2012, Pending Sales in the Hilton Head region were up 19.4 percent overall. The price range with the largest gain in sales was the $100,001 to $225,000 range, where they increased 31.7 percent.

The overall Median Sales Price was down 2.3 percent to $225,000. The property type with the largest price gain was the Condo segment, where prices increased 4.4 percent to $155,000. The price range that tended to sell the quickest was the $100,000 and Below range at 87 days; the price range that tended to sell the slowest was the $650,001 and Above range at 196 days.

Market-wide, inventory levels were down 19.4 percent. The property type that lost the least inventory was the Single-Family segment, where it decreased 17.4 percent. That amounts to 8.8 months supply for Single-Family homes and 9.3 months supply for Condos.

To see both reports in full, complete with graphs, click on

• Monthly Indicators
• Housing Supply Overview

(All data provided by Multiple Listing Service of Hilton Head Island - powered by 10K Research and Marketing and sponsored by the South Carolina Association of REALTORS.)

Freddie Mac recently released its U.S. Economic and Housing Market Outlook for November showing what a healthy national housing market should look like taking into account recent trends, key housing indicators and the shifting demographic patterns that will define a new and realistic trajectory over the next five years. A healthy housing market should have activity below the levels recorded during the peaks of the prior decade.

Outlook highlights - what a healthy housing market should look like:

• Housing starts increasing to about 1.7 to 1.8 million dwellings per year compared with 2.1 million in 2005.
• Home sales increasing to about 5 percent of the housing stock, or about 6.5 to 7.0 million homes per year, compared with sales of 7 percent of the stock in 2005.

The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally adjusted rate of 7.40 percent of all loans outstanding as of the end of the third quarter of 2012, a decrease of 18 basis points from the second quarter of 2012, and a decrease of 59 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The non-seasonally adjusted delinquency rate increased 29 basis points to 7.64 percent this quarter from 7.35 percent last quarter. Delinquency rates typically increase between the second and third quarters of the year.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the third quarter was 0.90 percent, down six basis points from last quarter and down 18 basis points from one year ago. The percentage of loans in the foreclosure process at the end of the third quarter was 4.07 percent, down 20 basis points from the second quarter and 36 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 7.03 percent, a decrease of 28 basis points from last quarter, and a decrease of 86 basis points from the third quarter of last year.

When it comes to choosing a mortgage, it’s more important than ever for prospective buyers—or current owners looking to refinance—to understand the wide range of mortgage loans available. Whether you’re in the market for a home mortgage, looking to refinance or jump on the green bandwagon with energy efficient upgrades, there are a number of different home mortgage loans available.

While the process can quickly become overwhelming, the following list of mortgage loans will satisfy anyone’s unique need or situation.

Fixed-rate mortgages are the most common mortgages since the rates are stable for the life of the loan, taking all the guesswork out of the equation. Not only will borrowers know their exact monthly payment throughout the life of the loan, they can also be sure that nothing will change. The most popular fixed-rate mortgages are 30- and 15-year terms.