NAR’s composite quarterly Housing Affordability Index rose to a record high of 205.9 in first quarter, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power. This is the first time the quarterly index broke the 200 mark; recordkeeping began in 1970.

NAR President Moe Veissi said market conditions are optimal for home buyers. “For those with good credit, we’ve never seen better housing affordability conditions or market opportunities than we see at present,” he said. “Although home prices are stabilizing and sales are rising, some buyers still have to jump through a lot of hoops to convince a lender that they are creditworthy, even for a mortgage that would be well within their means. This is especially true for self-employed buyers.”

Veissi noted home sales would be much higher if lending standards would return to normal.

The index shows the median-income family, earning just under $61,000, could afford a home costing $325,500 in the first quarter, which is more than double the national median existing single-family home price of $158,100. The median monthly mortgage principal and interest payment for a median-priced home would take only 13.5 percent of gross income.

A companion index measuring the ability of first-time buyers to purchase a home also set a record, with the first-time buyer index reaching 135.8 in the first quarter.

Assumptions for the first-time buyer index include a lower income, at 65 percent of median family income, a starter home costing 85 percent of the median price, and a down payment of 10 percent. This index means the typical entry-level buyer could afford a home costing $182,500, which is well above the overall median price.

“It’s never been easy to buy a first home because of the cash required for downpayment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better,” Veissi explained.

Most first-time buyers choose a loan with a lower down payment, often an FHA-insured loan with 3.5 percent down, and some use the VA program with no down payment.

Both home prices and mortgage interest rates are expected to edge up modestly as the year progresses, but housing affordability will remain very favorable with the median-income household well positioned to afford a median-priced home. For all of 2012 the index is projected to set an annual record, averaging 191 for the year.

Source: NAR

Builder confidence for the market of newly built single-family homes rose five points this month, posting its best reading since May of 2007, according to a measure of builder sentiment by NAHB/Wells Fargo. The index measures builder sentiment on sales conditions and expectations as well as buyer traffic.

"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," says Barry Rutenberg, NAHB chairman. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."

Still, housing experts warn the new-home market still has a long way to go toward normalizing, based on historical trends. Builders say consumer access to credit, inaccurate appraisals, and the rise in materials costs for new construction continue to pose major challenges to the industry.

According to May's index, the largest gains in builder confidence occurred in the Northeast, followed by Midwest and South. The West posted a two-point decline in builder sentiment for May, according to the index.

Source: National Association of Home Builders

For example, one New York renter said he started looking into owning a home when his landlord tried to increase his rent by 13 percent when his lease was up for renewal. He found that he could buy a home and get the same amount of space for cheaper than continuing to rent, plus he’d be building equity.

Other renters are starting to see that buying may be a better option for them, too.

Rents are increasing at about the same pace that home values are dropping, says Stan Humphries, Zillow’s chief economist, who says, according to their surveys, home prices have dropped 3.1 percent year-over-year whereas rents have increased 2.5 percent.

"Herein lie the seeds to eventually more interest in buying on the part of consumers, which will help put a floor under home prices," Humphries told Investors Business Daily. Recent housing surveys, including Zillow’s, are showing home prices are starting to rise in recent months.

Affordability in housing has been at record highs from the combination of falling home values and record-low mortgages. Humphries says that housing prices have rolled back to 2003 levels.

"That increased affordability in the face of rising rental prices will begin to get buyers off the fence this year,” Humphries says. "What's been keeping buyers on the fence is a crisis of confidence. People who don't have a job, or who are worried about losing their job, don't buy homes. They also don't want to buy an asset they think is rapidly depreciating.”

National Association of REALTORS®’ Chief Economist Lawrence Yun says the tighter restrictions from lenders are also preventing many potential buyers from securing financing in order to buy. But for those who are able to qualify, Yun says “it’s better to get in now” than wait.

Source: “Rising Rents Prompt Buys, May Help Housing Recover,” Investors Business Daily (May 10, 2012)

The real estate markets expected to see the biggest increases in home prices will likely be those hardest hit the last few years by foreclosures, such as in Phoenix and Las Vegas, and areas where prices have fallen the most, according to Fiserv’s forecast.

Housings rising affordability mixed with falling inventories of for-sale homes are the main factors driving the expected price increases, according to Fiserv.

Initially, investors are expected to help drive most of this price increase, and then followed by first-time and trade-up buyers as they re-emerge in bigger numbers to the market.

Source: “U.S. Home Prices Could Rise 4% a Year, Forecast Says,” USA Today (May 8. 2012)

A recent article at U.S. News & World Report lists tips for those often-forgotten aspects of home ownership. Here are some of those overlooked aspects:

• Zoning of nearby areas: What you see today may not be what you see a few years from now. Communities’ and neighborhoods’ landscapes can drastically change in a few years. And while some of these changes may be good — such as the addition of a nearby recreation park or school — some may be viewed as a negative, like a new highway overpass behind the property, the article notes. By reviewing upcoming plans and existing zoning at the city’s urban development department, home buyers can get a better idea of what the future may hold for the surrounding area of the neighborhood they choose.
• Remodeling rules: Some community associations may set limitations on what you can do to property, particularly if the buyer ever wants to make exterior changes like adding a garage or guest house. Purchasers who are looking to have a house grow with their family’s needs through the years may want to investigate any such rules beforehand to make sure that they’ll be able to add onto their home as needed.
• Impact of crime rate: Home purchasers may be concerned about making sure their new home falls in a low-crime-rate area but they may fail to realize how it can also impact their monthly budget. For example, “living in a high-risk neighborhood can send monthly bills upwards, like inflated auto insurance premiums,” the U.S. News & World Report article notes.

Read the full article and more items for buyers to consider in their home search at U.S. News & World Report.

Source: “4 Not-So-Obvious Things to Research Before Buying a Home,” U.S. News & World Report (May 2, 2012)

Recent surveys have shown that foreclosure sales have dropped to their lowest point in more than two years. And while according to March data, 8 percent more homes did enter the foreclosure process from the previous month, that number is down more than 30 percent from a year ago, according to Lender Processing Services.

CNBC real estate reporter Diana Olick notes that it could be another delay in the foreclosure system “as banks try to modify more loans to meet some of the terms of the [$25 billion] servicing settlement. The foreclosure sales decline also appears to be exclusively in private and portfolio loans, which again points to the settlement.”

Meanwhile, banks are increasing their number of short-sale transactions, and some surveys have shown that short sales are actually now outpacing foreclosure sales — the first time that's ever occurred.

“Lenders are increasingly recognizing that short sales may be a better alternative for them than foreclosure,” RealtyTrac’s Daren Blomquist told CNBC. “This trend began in markets with stronger demand and where the distressed inventory tends to be newer homes (Phoenix, Los Angeles, Las Vegas), but the trend appears to be spreading to other markets like Atlanta and Detroit.”

Source: “Flood of Foreclosures Still Fails to Materialize,” CNBC (May 2, 2012)

1. Lowball offers won’t likely stick: Sure, deals are still around, but lowball offers that aren’t in line with comparable sales data are increasingly proving to be a waste of time. Buyers may be better off asking for seller concessions, such as closing cost assistance or making home repairs, rather than making offers way below the asking price. “Keep in mind that a lowball number may turn off the seller and close down any chance at negotiation,” the U.S. News & World Report article cautions potential buyers.

2. Get pre-approved: Getting a loan isn’t easy nowadays as lenders have tightened their credit standards in recent years. Serious buyers should check their credit and get pre-appoved for a loan to determine how much of a home they can even afford even before they start their home search.

3. Get realistic about the market: Real estate agents can show buyers comparable nearby sales to help educate them about local market conditions. Transactions from the last six months are the most important. Another important piece of information for buyers is knowing how long properties are staying on the market.

4. Expect some competition. Housing inventories are dropping in many areas and spurring an increase in demand. Home buyers may face increased competition for the home they want, particularly among short sales and foreclosed properties, in which they may be up against investors who are making all-cash offers. That’s why experts say it’s important bank-financed buyers know their financial situation in advance to better compete.

5. Conduct property research: Real estate agents will help guide clients on what all they need to do when they find a property they like, but one important step nowadays: Buyers should hire a title company to check for any liens or tax arrearages, the article notes. Housing experts also recommend hiring a home inspector, verifying the accuracy of the property line (by asking seller for the survey or having your own conducted), and make sure all necessary disclosures about the property, required by the state, have been made.

Source: “Traditional 'Rules' of Home Buying Return,” US News & World Report (May 1, 2012)

Home prices have fallen and mortgage rates are hovering near record lows, pushing home affordability for the average family to record highs. Meanwhile, rents have been on the rise, making owning a home cheaper than renting in most areas of the country, according to recent surveys.

But the housing deals aren’t expected to stick around much longer.

An improving job market, a decrease in the number of home owners falling behind on their mortgage, and an anticipated improvement in access to mortgages is expected to help home prices start bouncing back by next year, economists say.

Investors eyeing profits in rentals also have been snapping up bank-owned properties, which Clear Capital’s Alex Villacorte attributes as helping to lead to an increase in prices on foreclosed properties. This “could have a significant impact on the market overall in terms of providing a rising floor to home values,” Villacorte told CNNMoney.

Some areas are already seeing prices rise. In Phoenix, housing prices have already increased 8.4 percent during the three months ending April 30, and Miami saw prices bump up 4.6 percent quarter over quarter, according to Clear Capital data.

"Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000," Tanya Marchiol, founder of Team Investments in Phoenix, told CNNMoney.

Loan Rates, Demand Predictions

Buyers may want to act more quickly because mortgage rates are expected to tick up slightly by the end of the year. The increase is being sparked by greater demand, says Doug Lebda, CEO of LendingTree. He predicts 30-year fixed-rate mortgages will inch up to 4.5 percent by the end of the year, which is still low, however, by historical standards.

The Mortgage Bankers Association is also predicting a big leap in mortgage loans next year. For this year, MBA estimates that buyers will take out loans totaling about $415 billion, but by 2013 that number is expected to nearly double to $706 billion.

Source: “Buying a Home Won't get Much Cheaper,” CNNMoney (May 3, 2012) and “Time To Trade The Lease For A Mortgage?” NPR (May 1, 2012)

So, what's cool about gardening?

From growing vegetables in the front yard to creating an edible wall of green on the balcony, gardening is not limited to just a half-acre plot in the country anymore. Now, gardeners use any space available for a garden, no matter how urban or small. The key is adding individuality or personality to the garden in the form of handmade sculptures, water features, bird feeders or even the variety of unique heirloom plants that are used. Sustainability is also very important. Plants that serve a dual purpose – like low-growing thyme used as a ground cover in a small area or a cucumber plant that has been trained to grow up a trellis as a green screen – are excellent examples of how many gardeners have transformed traditional ideas of gardening. Looking at gardening and plants in new ways can lead to some great discoveries – and may even increase the productivity of a green space.

How can you join in the gardening movement? Here are some helpful tips to get started.

Maximize space:
Even if you only have a window, and no outdoor space, you can have a garden. An herb garden, like the Miracle-Gro Culinary Herb Kit, can be grown on a window ledge in the kitchen. No ledge? No problem. Just hang a hook from the ceiling and grow your plants in a hanging basket. For those with little outdoor space, try container gardening on the patio or use an outside fence or railing to grow a vertical garden. Simply hang pots on hooks or create your own "living wall" using chicken wire, coconut fiber lining and a quality potting mix. Then, plant trailing produce or flowers and watch your wall grow. If you have a sunny space in the yard, create a small garden using the new Miracle-Gro Ultimate Raised Garden Bed. This easy-to-use kit snaps together and can easily be customized to fit in nearly any space. Simply add nutrient-enriched soil, like Miracle-Gro Expand N Gro or Potting Mix, and plant the garden on a patio, deck, rooftop or balcony.

Redefine terms:
Produce plants are for vegetable gardens and landscaping plants are for the front yard … right? Not necessarily. The great thing about gardening is that the only necessary rules are the ones Mother Nature created: plants need sunlight, water, food and soil with good drainage. Other than that, do not be afraid to mix it up. Plant vegetables in the front yard, use strawberries in a hanging basket or plant an herb for groundcover along a path. Tomatoes will grow beautifully next to marigolds and sage will add a nice contrast when grown in a container alongside yellow daisies. Grow what you like that will thrive in your climate, even if it is not what your neighbors are growing.

Stay true to yourself:
If your favorite color is blue, then plant blue flowers. If you love salsa, then plant a "salsa garden" by using tomatoes, cilantro, onions and jalapenos. Add your own touch and make it personal. The materials used can represent your style and add interest in the garden as effectively as what is planted. With adequate drainage, even an old toolbox can come to life with some potting soil and impatiens. Collect stones and small objects with kids to make garden sculptures or bird feeders that the whole family can enjoy. Green plastic bottle caps can be turned into ornamental "trees" and grandma's cracked tea cup could become a bird feeder with a little imagination. If you have extra produce, make sure to share it. Friends, neighbors, family and even many local food pantries will take donations of fresh fruits and vegetables.

Experiment:
Although gardening can be seen as a science, it should also be looked as an art. Gardeners should feel free to experiment and express themselves through their gardens. Let your green space reflect your home, your interests and your individuality. Make it a tradition to try at least one new thing every year and you may be surprised how much you learn along the way.
 

The federal law known as the "Flag Code" establishes a guide for handling and displaying Old Glory. If you'll be showing your American pride this year by displaying the flag or decorating with bunting, here's a thumbnail review of the code's guidelines so you can be confident in all you do:

* It's OK to display the flag 'round the clock, but you should illuminate it during nighttime hours. If you're not able to light the flag at night, the code recommends displaying only between sunrise and sunset.

* Hoist it briskly and lower it slowly and ceremoniously.

* Be sure to bring your flag in out of rain or snow – unless it's made of an all-weather material, in which case it's OK to leave it out in inclement weather.

* If you would like to display a flag on your car or truck, affix it to the chassis or clamp it to the right front fender.

* Many Americans are also proud of their ethnic origins and may choose to display the flag of their heritage along with the American Flag. That's fine; just be sure that the U.S. flag is displayed higher up, or if the flags are on the same level, the other flag should be placed to the left of the American Flag, never to the right.

* The blue and white stars field – known as "the union" – should always be up: at the top of the flag if it's on a staff or pole, uppermost and to the observer's left if the flag is being displayed horizontally or vertically against a wall. Displaying the flag with the union down is a signal of dire distress and reserved for instances of extreme danger to life or property.

* The flag should be kept from touching the ground, floor, water or anything beneath it.

* Flag-themed decor can add a welcome patriotic touch to your home, but it's best not to get carried away and use the American Flag as bedding or drapery.

* Bunting is an acceptable patriotic display; arrange it with the blue portion at the top, the white in the middle and the red at the bottom.

* When a flag becomes worn and is in such a condition that it is no longer a fitting emblem for display, it should be destroyed in a dignified way.  One way to do that is to give the flag to a local VFW for proper disposal.

"Americans show their patriotism and American pride in a number of ways, from buying red, white and blue products to placing flags and flowers on the graves of veterans," Singleton says. "Displaying the American Flag in a respectful manner is one more way Americans can honor their country this summer and all year long."

For official rules on flag etiquette visit: http://teresabutler.com/flag_etiquette.htm