In May 2010, Retail Sales at non-store retailers -- a category that includes Amazon and eBay -- topped $29 billion, up 16 percent from May 2009. Clearly, Americans are doing an increasing amount of shopping online. And we're paying our bills online, too.
But how well are we protecting our identities?
In this 5-minute piece from NBC's The Today Show, you'll learn the basics of online fraud and methods to minimize the likelihood of identity theft. Furthermore, the tips go beyond the basic "choose a challenging password". For example, you'll hear about:
Why you shouldn't pay bills from a coffee shop
Who might be hiding behind an unprotected public wifi network
The dangers of storing credit card numbers with an online retailer
And, although, at one point, the interviewee goes over the top with respect to spyware and anti-phishing prevention, the point being made is a good one -- you can't be too careful with your online financials and common sense goes a long way.
As the mercury rises into the summer months, don't forget to change your home's air filters regularly. It not only extends the life of your HVAC unit, but can help keep your energy costs down, too.
Not all air filters are created alike, however. Don't go cheap.
Your local hardware store carries a variety of air filters ranging in price from less than a dollar to $20 or more per filter. They're all purported to do the same job, but after watching this 1-minute video, you'll see why cheaper isn't necessarily better.
Airborne particles are smaller than most mesh filters. Pleated filters are recommended instead.
Most high-quality air filters start around $11 and can be purchased in bulk from Amazon at discounts of up to 20 percent. 3M's Filtrete line of products is a popular, well-selling brand and can last up to 3 months.
If your home has shedding pets or is dust-prone, consider changing them monthly.
Starting sometime later this year, the monthly cost to carry an FHA-insured mortgage is expected to rise.
In a near-unanimous vote, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers.
Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent, among other details of the bill.
Despite the ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.
In everyday terms, assuming a $200,000 mortgage, the math to a homeowner looks as follows:
Current Premium (0.55%) : $91.67 monthly mortgage insurance premium
Maximum Increase (1.55%) : $258.33 monthly mortgage insurance premium
A increase in monthly mortgage insurance premiums will reduce home affordability and strain household budgets.
The news isn't all terrible, however.
Because higher monthly insurance premiums are expected to pad the FHA coffers sufficiently, the FHA has said it plans to reduce its upfront mortgage insurance premium paid at closing from 2.25 percent down to 1.000 percent.
On the same $200,000 mortgage, a move like that would reduces closing costs by $2,500.
The bill awaits companion legislation in Senate and final approval into law, but considering the House's lopsided vote Thursday, it could happen rather quickly. If you're planning to buy or refinance a home using an FHA mortgage, you may find that waiting to take the next step could be a costly one, long-term.
According to foreclosure-tracking firm RealtyTrac.com, bank repossessions reached record levels for the second straight month in May, topping 93,000 properties nationwide.
As compared to May 2009, all 50 states now show an increase in annual REO activity.
Furthermore, total foreclosure actions -- the sum of REO, default notices, and foreclosure auctions in May -- topped 300,000 for the 15th straight month.
Foreclosures remain a huge influence on the housing market.
However, two interesting trends emerged in the data:
9 of the top 10 metro areas for foreclosure posted annual activity decreases
Each of the top 4 states for Foreclosures per Household posted annual activity decreases
We can infer, therefore, that foreclosure activity may be in permanent decline in the areas hardest hit through 2007, 2008, and 2009. In 2010, the data shows, foreclosures are waning.
This is reason for optimism -- especially as FHA delinquencies slow nationwide. As fewer homeowners go delinquent, the pace of foreclosures will slow further and that should help boost home values on every block in the country.
If you've been considered bank-owned homes for your own purchase, give a look at the RealtyTrac foreclosure report. It's provides insight on a state-by-state level, and in the nation's largest metropolitan areas.
Then, to complement your research, talk to your real estate about the foreclosure market and what opportunities may exist. Competition for bank-owned homes can be fierce at times, but there's plenty of "deals" out there.
Mortgage rates may be dropping, but mortgage costs are not.
According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.
A "discount point" is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.
Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it. In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn't do the same for required points.
An increase of 1/10 percent in discount points costs homebuyers and refinancing households an extra $100 per $100,000 borrowed.
The hike reminds us that there's more to a mortgage than just its rate -- costs matter, too. And if you've only been watching the headlines, you would have missed how costs are rising.
A new loan quality initiative from Fannie Mae is making it harder for home buyers and refinancing homeowners everywhere to close on a mortgage.
Beginning June 1, 2010, with all new applications, Fannie Mae wants lenders to verify that borrowers have not taken on new debt during the underwriting phase of the mortgage.
If new debts are found, the mortgage is subject to a re-underwrite and a possible turndown.
For Fannie Mae, the goal is to reduce the number of loans that go bad because of new, non-disclosed debt. Lenders have the freedom to verify in whatever manner they wish, but in most cases, the verification process will amount to a credit re-pull made just prior to closing.
The underwriters will be looking for 3 things in particular -- even after your loan is approved.
First, your updated credit report will show your current credit card bills and minimum monthly payments. Those numbers will replace your original numbers made at the time of application. If the debts exceed a certain threshold, your loan will be denied.
Second, underwriters will be looking at your updated credit score. If your FICO has dropped below minimum lending standards, your loan will be denied. Or, you may be subject to a new loan-level pricing adjustment.
Loan level pricing adjustments are mandatory loan fee based on your credit score.
And, lastly, underwriters will be looking at your credit report's Credit Inquiry section. The goal is to see if you've been applying for credit elsewhere. Underwriters can use this information at their discretion.
Fannie Mae's Loan Quality Initiative is just one more way that the government-backed group is trying to improve its loan pools. Unfortunately, it'll mean more turndowns for mortgage applicants.
Therefore, take extra care of your credit between the time of application and the time of closing. Don't buy new cars, don't buy new appliances, and -- most definitely -- don't open new credit cards. Be extra safe with your credit because a mortgage application that's supposedly cleared-to-close can be revoked at the eleventh hour.
When in doubt, talk to your loan officer about what may or may not trigger the Loan Quality Initiative. Your loan approval is at stake.
Carbon monoxide (CO) is an odorless, colorless gas found in combustion fumes, stoves, gas ranges and heating systems. It's poisonous to humans because carbon monoxide binds to red blood cells, preventing the flow of oxygen through a person's bloodstream.
There's a bevy of CO sources in the home and that may be why more than 20,000 Americans are sent to the emergency room each year because of Carbon Monoxide poisoning. 5 percent die from it.
Therefore, whether you own a home or rent one, equip your place with working carbon monoxide detectors and test them regularly. In this 2-minute video from Lowe's, you'll learn how to get started:
How to mount CO detectors using basic household tools
In what rooms to install CO detectors for maximum safety
How often CO detector batteries should be changed
Carbon monoxide poisoning is a four-season danger at home. Protect your yourself and your loved ones.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls data from the month prior.
The release is more commonly called "the jobs report" -- a major factor in mortgage rates and monthly payments.
Especially now.
With the recession officially over and growth returning to the U.S. economy, the recovery's next frontier is jobs. As job growth increases, home affordability should take a hit. Here's why:
As the number of working Americans increases, so should total consumer spending
As consumer spending increases, so should a return to risk-taking on Wall Street
As risk-taking returns to Wall Street, bond markets should start to lose
Mortgage rates, therefore, should rise.
Furthermore, as the jobs market stabilizes and recovers, renters should be more apt to buy their first home, and homeowners should be apt to up-size. More home buyers means more competition for homes and higher home prices typically follow.
Job growth can be trickle-up for housing.
Today, however, the jobs data was not so strong. According to the government, 431,000 jobs were created in May, but of those new jobs, 95.4% represented temporary staffing for the 2010 Census. The number of private-sector jobs created fell well short of expectations and Wall Street is voting with its dollars right now. Mortgage bonds are gaining so, therefore, rates are falling.
The May 2010 jobs report may not reflect well on the economy, but home affordability around the country is improving because of it.
The Pending Home Sales Index shot higher in April as low mortgage rates and a soon-to-expire federal tax credit spurred home buying across the county.
A "pending home sale" is a home that's under contract to sell but not yet closed.
Region-by-region, April's pending home sales varied versus March's data:
Northeast Region: +29.5%
Midwest Region : +4.1%
South Region : -0.6% (after a +15.9% posting in March)
West Region : +7.5%
On an annual basis, the Pending Home Sales Index is higher by 22 percent.
April marks the third straight month that pending home sales are up and today's buyers should take note. This is because, according to the National Association of Realtors®, 80% of homes under contract close within 60 days.
In other words, May and June's existing home sales data should be similarly strong, causing the real estate market to gently shift in favor of sellers. In fact, already, we're seeing home resales touch multi-year highs while new home supplies fall to multi-year lows.
All of it tends to push home prices higher while simultaneously reducing buyer negotiation leverage. That, coupled with the high probability of higher mortgage rates ahead, means that finding "deals" will get tougher for the average home buyer.
In looking at the housing market data, it appears that the best month in which to have bought a home this year was February. The next best time may be right now.
Talk to your real estate agent if you're planning to buy a home this year. It may be sensible to move up your time frame a few months.
The Consumer Confidence Index is rising, a potentially double-edged sword for Americans, in general.
According to The Conference Board, economic confidence is as high as it's been since August 2007 -- 4 months before the start of the recession. Americans are optimistic again.
Confidence matters to the economy because as confidence increases, in theory, consumer spending follows. Consumer spending accounts for 70 percent of the U.S. economy.
It's why Wall Street is responsive to confidence data.
When consumer confidence is rising, households start to make big-ticket purchases they may have otherwise put off indefinitely. Maybe it's a replacing old appliances; or, trading in an old automobiles; or, splurging on a vacation.
Rising confidence can also spur real estate sales.
When confidence is rising, a growing family that chose to "make do" in their 3-bedroom, 1.5-bathroom starter home may opt to move-up to a 4-bedroom, 3-bath instead at a slightly higher monthly carrying cost. And there are families in every city in every state making those same decisions.
As a result, the housing market gets a boost -- especially in the mid-to-upper price ranges. Values rise on higher demand for homes.
The downside is that growing confidence tends to push conforming and FHA mortgage rates up. This is because an expanding economy draws investment dollars away from bonds and into stocks -- including mortgage bonds.
The reduced demand for mortgage-backed bonds leads bond prices to fall and mortgage rates to rise. Sometimes by a little, sometimes by lot.
So, if you're buying a home or thinking of a refinance, rising confidence in the economy may be a signal to act sooner rather than later. Talk to your real estate agent and/or your loan officer about next steps and get your plan in place.
After moving into a new home , you should immediately replace its deadbolt locks. It's not just the home's former residents that have the key, after all, but so might a relative, a friend, a neighbor, a dog-walker, and others.
You may call a locksmith for the job, but you can save some money if you can do-it-yourself.
In this detailed, 2-minute video, you'll learn how to remove and replace a deadbolt lock using nothing but a Phillips screwdriver and a deadbolt from a hardware store. It's a simple project that requires little mechanical skill.
At the current sales pace, the nation's complete supply of new homes would be sold in just 5 month's time. That's more than double the pace of a year ago.
Also, as more good news, in terms of total housing units, the government reports that New Home Sales topped one half-million homes sold for the first time since May 2008.
But before we declare the housing market "repaired in full", we have to consider a few of the reasons why home sales are charting so strongly.
The first reason is the federal homebuyer tax credit's April 30 expiration. In order to claim up to $8,000 in tax credits, home buyers must have been in mutual contract for a property before May 1. There is no doubt this contributed to a run-up in sales, especially among first-time home buyers.
The second reason is that mortgage rates have remained exceptionally low, defying expert predictions. Low rates don't sell homes, but they do make monthly payments easier to manage for households torn between renting or buying.
And, lastly, March and April's new home sales may have been buoyed by aggressive discounting on behalf of homebuilders. As compared to February 2010, April's average new home sale price was lower by 13 percent. That's a sharp drop in a short period of time.
For now, though, homes are selling, supplies are dropping, and buyer interest is high. It's no wonder builder confidence is soaring.
Because of strife in Greece, Spain and North Korea, conforming mortgage rates are back to all-time lows. They're at levels not seen in 50 years. For homeowners that missed the Refi Boom of November 2009, it's a second chance.
In this well-presented, 3-minute video from NBC's The Today Show, you'll get tips getting low rates and choosing the best time to lock in.
Some of the topics covered include:
Why were the experts wrong about rates moving higher this summer?
How much money can you save with a 1 point drop in your interest rate?
Should you buy a bigger home now that rates have fallen?
The advice in the piece is matter-of-fact and centered. There is no cheerleading and the message is honest. Mortgage rates are low and they likely won't stay that way. If you've been thinking about a refinance, talk to your loan officer as soon as possible.
Home values rose in March, according to the Federal Home Finance Agency's most recent Home Price Index. Values were reported higher by 0.3 percent, on average, from February.
We use the phrase "on average" because the Home Price Index is broad-reaching, national housing statistic. It ignores the dynamics of neighborhood real estate markets as well as citywide markets , too.
Instead, the Home Price Index focuses on state and regional statistics.
Of course, none of this data is especially helpful for today's home buyers and sellers.
Real estate is a local phenomenon that can't be summarized by state or region. What matters most to buyers and sellers is the economics of a neighborhood and that level of granularity can't be served up by a national housing report like the Home Price Index.
The Home Price Index data is additionally unhelpful to buyers and sellers in that it reports on a 2-month delay.
In other words, Home Price Index is not even a fair reflection of today's market -- it highlights the real estate market as it existed 60 days ago.
So why is the Home Price Index even published? Because government, business and banks rely on the reports. As a national indicator, the Home Price Index helps governments make policy, businesses make decisions, and banks make guidelines. This, in turn, trickles down to Main Street where it impacts every one of us -- and eventually influences real estate.
Since peaking in April 2007, the Home Price Index is off 13.44 percent.
Sales of existing homes rose in April, buoyed by an expiring home buyer tax credit and exceptionally low mortgage rates.
As compared to March, April's Existing Home Sales rose by 410,000 units nationwide -- the second straight month of large gains. An "existing home" is a home resold by a prior owner (i.e. not new construction).
It's a solid report for housing overall, with rising sales suggesting that the real estate market's recovery is ongoing. However, the data presented a mixed message.
According to the National Association of Realtors®, although the number of homes sold ticked higher in April, so did the supply of existing homes for sale, too.
Sellers are now listing homes faster than buyers can buy them.
After adding another 0.3 months of supply in April, resale home supply is nearly two full months larger than at November 2009's low-point. This put downward pressure on home prices.
Furthermore, because 49% of April's buyers were first-time buyers and the tax credit has since ended, we can expect that sellers will continue to outweigh buyers in the months ahead.
It presents an interesting opportunity for June's home buyers. Mortgage rates are still at their lowest levels of the year -- despite expert predictions to the contrary -- and homes remain affordable. Plus, in a lot of markets, home values have started to creep higher.
There's good values and good rates but neither should last long. For the next few weeks, real estate may be in its 2010 sweet spot.
If you were thinking of moving in September of this year or later, consider moving up your timeframe.
From one pot to a lush garden, we all have plants for which to care in our lives. But are they getting the right amount of water? Too little water and the plant dies. Too much water and root rot sets in.
In general, plants want 1 inch of water per week but Mother Nature doesn't always provide. It's up to us to make up the difference.
In this short video from ExpertVillage, Doug Smiddy shows us how to make sure our plants get the right amount of water they need to survive. He answers questions including:
How do you know if your plants need water right now?
What is best time of day to water outdoor plants?
What is the proper way to water a plant?
The video runs a little bit over 2 minutes and is stocked with helpful tips. If you care for any plants in your life, it's a must-watch video.
With home prices still relatively low and mortgage rates trolling near their all-time best levels, it's no surprise that home affordability is extraordinarily high in most U.S. markets.
According to the quarterly Home Opportunity Index as published by the National Association of Home Builders, more than 72 percent of all new and existing homes sold between January-March 2010 were affordable to families earning the national median income.
It's the second highest reading in the survey's history.
Of course, on a city-by-city basis, home affordability varies.
In the first quarter of 2010, for example, 98.7% of homes sold in Bay City, Michigan were affordable for families earning the area's median income and in Indianapolis, the percentage was almost 95 percent.
Indianapolis has held the top quarterly ranking for close to 5 years now.
On the opposite end of the spectrum, the New York-White Plains, NY-Wayne, NJ region earned the "least affordable" metropolitan area for the 8th consecutive quarter. Just 20.9% of homes are affordable to families earning the local median income.
The rankings for all 225 metro areas are available on the NAHB website but regardless of where your town ranks, home affordability remains high as compared to historical values but it likely won't last long. Home values are recovering in many markets and mortgage rates won't stay this low forever.
All things equal, buying a home may never come this cheap again. If you were planning to buy later this year, consider moving up your timeframe.
After starting the day in the red, mortgage rates rebounded Wednesday afternoon after the Federal Reserve released its April 27-28, 2010 meeting minutes.
It's good news for home buyers and would-be refinancers. Mortgage rates continue to troll along multi-year lows.
"Fed Minutes" are lengthy, detailed recaps of Federal Open Market Committee meetings, not unlike the minutes you'd see after a corporate conference, or condo association gathering. The Federal Reserve publishes Fed Minutes 3 weeks after each respective FOMC get-together.
The Fed meets 8 times annually.
Because of the minutes' content and density, it's of tremendous value to Wall Street and investors. Fed Minutes provide a glimpse into the conversations and debates that shape the country's monetary policy.
The broad scope of the published meeting minutes are in sharp contrast to the more well-known, post-meeting press release which reads more like a policy summary.
And the extra words matter.
Here's some of what the Fed discussed last month:
On Greece : A crisis in Greece could slow U.S. domestic growth
On housing : Despite government support, growth appears to have stalled
On its mortgage buyback program : There's little reason to sell mortgage bonds right now
When the markets saw the Fed Minutes, what had been a down day for bond markets turned positive. The less-than-sunny outlook for the near-term U.S. economy sparked bond sales, pushing prices higher.
Mortgage rates move opposite mortgage bond prices.
Wall Street is always in search of clues from inside the Fed about what's next for the economy and post-FOMC minutes usually give good fodder. April's meeting was no different.
For now, mortgage rates remain near all-time lows but once the Eurozone issues are settled, rates are likely to rise. If you haven't locked a mortgage rate, your window may be closing. Once the economy is turning around for certain, mortgage bonds will be among the first of the casualties.
Single-family Housing Starts rose by 55,000 last month, suggesting ample housing stock from which can choose this summer.
The report is a slightly larger read than what economists had expected.
Furthermore, for the first time since June 2009, Housing Starts appears to have broken away from its half-million unit plateau. 593,000 new homes were started in April.
Ordinarily, both Wall Street andMain Street would celebrate a strong housing sector report like this, but the Department of Commerce's press release also held two cautionary notes.
The first point of caution is a mathematical one. Although single-family starts increased by 10.2 percent, the survey had a Margin of Error of 10.7 percent. This means that Housing Starts may have fallen by 0.5 percent and the report is statistically worthless.
The second point of caution is tied to Building Permits, a complementary data point in the same Department of Commerce report. In April, Building Permits fell by almost 11 percent with a tiny Margin of Error of less than 2%. This tells us that builders are pulling back -- a sign of low housing market confidence
According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Housing Starts, therefore, should ease though June and July.
Home prices are based on housing's supply and demand. For the next few months, supply should elevate, helping prices remain suppressed, after which, supply should dwindle.
The best time to buy a home, therefore, may be now. As the summer months come to close, we may find that buyers vastly outweigh sellers.
As lenders tighten mortgage guidelines for home buyers, minimum downpayment requirements are increasing. Several years ago, you could finance a home with nothing down. Today, most conventional mortgages require at least 10 percent.
Anecdotally, guideline changes have led to an increase in the number of home buyers accepting cash gifts from family.
Gifts are allowed in most cases but the problem is, if you don't accept the gift in a "lender-friendly" way, the mortgage underwriter could reject it, and negate it.
You can't just deposit a cash gift into your bank account. You have to follow a series of steps and keep records.
Provide an acceptable gift letter signed by all parties
Provide documentation of the gifter's withdrawal of funds via teller receipts
Provide documentation of the giftee's deposit of funds via teller receipts
Lenders require these 3 steps for two basic reasons. First, they want to make sure that the cash gift is "clean" (i.e. not laundered). Second, they want to make sure the gift is really a gift and not a loan-in-disguise.
It's why lenders typically require that the loan application be accompanied by a signed, dated letter.
For example:
I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].
This is a gift -- not a loan -- and there is no expectation of repayment.
Signed, [Signature of gifter]
As an additional step, home buyers receiving cash gifts should make sure that gifted funds are not commingled at the time of deposit. If the cash gift is for $10,000, therefore, the bank's deposit slip should indicate that a $10,000 deposit was made -- nothing more, nothing less. Don't add a random $100 deposit to the transaction, in other words. The $100 deposit should be a separate transaction.
It's also worth noting that gifting funds between family members can create both legal and tax liabilities. If you're unsure about how donating or receiving a gift may impact you, call or email me directly. If I can't help you with your questions, I can refer you to somebody that can.
Starting sometime later this year, the monthly cost to carry an FHA-insured mortgage is expected to rise.
Mortgage rates may be dropping, but mortgage costs are not.
A new 
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls data from the month prior. 
The Pending Home Sales Index 
The Consumer Confidence Index is rising, a potentially double-edged sword for Americans, in general.
The supply of newly-built homes for sales plummeted in April, a positive indicator for the housing market as we head into the summer months.
Home values rose in March, according to the Federal Home Finance Agency's 
Sales of existing homes rose in April, buoyed by an expiring home buyer tax credit and exceptionally low mortgage rates.
As lenders tighten mortgage guidelines for home buyers, minimum downpayment requirements are increasing. Several years ago, you could finance a home with nothing down. Today, most conventional mortgages require at least 10 percent.