Some metropolitan areas are faring very well this year, posting measurable gains in both employment and housing. Other metropolitan areas, by contrast, are struggling.

To help identify those markets in which growth is occurring, the National Association of Homebuilders created the Improving Market Index, a metric analyzing three separate, independently-collected data series “indicative of improving economic health”.

The IMI’s three collected data series are :

1. Employment Growth (as published by the Bureau of Labor Statistics)
2. Home Price Growth (as published by Freddie Mac)
3. Single-Family Housing Growth (as published by the Census Bureau)

A metropolitan area is considered to be “improving” if all three indicators show growth at least six months after the respective area’s most recent trough, or “bottoming out”.

In May, there are exactly 100 U.S. markets that qualify for the NAHB’s Improving Market Index, down from 101 last month but higher by more than 800% from the reading in September 2011, the index’s inaugural release.

17 areas were added to the Improving Market Index list this month including Phoenix, Arizona; Ann Arbor, Michigan; and Bend, Oregon. 18 areas were removed from the May IMI.

83 metropolitan areas remained from April.

There is little actionable information in the Improving Markets Index but the report does a good job of highlighting how “real estate markets” can’t be summarized on a national level and remain relevant to everyday home buyers and sellers across Washington State and nationwide. For example, Fort Collins, Colorado is listed as an Improving Market. However, Greeley, Colorado — located just 30 miles away — was just downgraded from the same list.

Home values and economies vary by region, by state, by city, by neighborhood, and even by street.

The complete Improving Markets Index can be viewed at the NAHB website but for the best read of what’s happening in your neighborhood, talk to a local real estate agent.

For all your mortgage needs call CU Mortgage Division in Olympia, Washington at (360) 539-4687.

Memorial Day marks the unofficial start of summer and the 3-day Memorial Day weekend is a popular vacation time in real estate-related industries.

Real estate agents tend to take time off because fewer of their clients are actively home shopping on a holiday weekend; mortgage lenders are closed because banks don’t operate on a federal holiday; and, title agents are often away from the office because the former two groups aren’t working.

But what’s supposed to be a 3-day weekend is actually a 4.5-day one. This is because many people leaving for a Memorial Day vacation will not go to work on the Friday before the holiday, and then getting back into the “work groove” on Tuesday can be a half-day affair.

Therefore, if you’re under contract to buy a home in Olympia , or to sell one; or if you have a refinance in progress that’s expected to close at month-end, there are some steps you should take to get pro-active with your closing. If you’re going to lose 4-and-a-half days at the end of the month, you’ll want to try to make those days up while the month is still young.

Here are 3 quick tips to speed up your closing and approval.

First, get your homeowners insurance policy picked out. Do your comparison shopping, select an insurer, and then prepay your first year of insurance, effective your closing date. Pay by check and not credit card, if possible, to avoid harming your credit score.

Provide your proof of payment to your lender immediately.

Next, if you’re using a Power of Attorney, have your documents signed by all interested parties and submit them to your lender for review. Don’t assume that your attorney’s Power of Attorney documents will be acceptable to a bank — banks require specific verbiage. If the documents are rejected, make the requested fixes and resubmit.

Banks do not compromise on Power of Attorney letters.

And, lastly, if you’re accepting gifts or using retirement funds for your downpayment, be sure to have your paperwork reviewed and on file with your lender as soon as possible. Do not wait to withdraw funds until just before closing, either. Have everything in the proper checking account at least one week in advance, and ready for your closing.

There are other steps you can take, too, to make sure your end-of-May closing goes smoothly and they all amount to “preparedness”.

When you’re asked for paperwork, provide it quickly. When you’re asked to sign a document, sign it on the same day. When you’re needed to attend a home inspection or an appraisal, do it during your first available opening.

Just leave as little as possible to the “last minute”, and everything should go well.

Last quarter, by a margin of 3-to-2, more banks tightened residential mortgage lending standards for “prime borrowers” than did loosen them.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio. The insight comes from the Federal Reserve’s quarterly survey of its member banks.

Last quarter, of the 54 responding banks :

• 0 banks tightened mortgage guidelines considerably
• 3 banks tightened mortgage guidelines somewhat
• 49 banks left guidelines basically unchanged
• 2 banks eased mortgage guidelines somewhat
• 0 banks eased mortgage guidelines considerably

By contrast, in the quarter prior, not a single surveyed bank reported tighter residential mortgage guidelines. The period from January-March was a step backwards, therefore, for the fledgling U.S. housing market.

Overall, getting approved for a mortgage is tougher than it used to be. Banks enforce higher minimum credit score standards; ask for larger downpayment/equity positions; and require higher monthly income relative to monthly debt obligations.

It’s one reason why the homeownership rate is at its lowest point since 1997.

Another reason why homeownership rates may be down is that prospective home buyers believe the hurdles of today’s mortgage approval process may be impassably high. That’s untrue.

There are many U.S. homeowners and renters — even here in Olympia — that were approved for a home loan last quarter — prime borrowers or otherwise. Some had excellent credit, some had modest credit. Some had high income, some had moderate income. Many, however, took advantage of low-downpayment mortgage options such as the FHA’s 3.5% downpayment program, and the VA’s 100% mortgage program for military veterans.

Despite a general tightening in mortgage standards, loans are still available and banks remain eager to lend.

It is harder to get approved today as compared to 5 years ago, but for those that try and succeed, the reward is access to the lowest mortgage rates in a lifetime. Mortgage rates throughout Washington State continue to push home affordability to all-time highs.

If you’re in the market to buy a new a home or refinance one, your timing is excellent.

As a result, conforming and FHA mortgage rates slipped for the third straight week last week.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage available to borrowers in Washington State is down to 3.88% nationwide with an accompanying 0.7 discount points plus “typical” closing costs.

Last week’s reported 3.88 percent rate for the 30-year fixed rate mortgage is within one-tenth of one percent of the lowest, average mortgage rates in Freddie Mac survey history. However, the last time conforming rates were reported in this range, the accompanying, required discount points were higher than last week’s 0.7.

Meanwhile, at 3.11% nationwide with 0.7 discount points plus closing costs, the 15-year fixed rate mortgage rate is equally low. It, too, set a record last week.

It’s a good time to be looking for a mortgage in Olympia. Rates and fees are great.

Last week, markets moved on momentum. This week, they’ll move on data. The economic calendar is busy.

• Monday : Retail Sales; Housing Market Index
• Tuesday : Housing Starts
• Thursday : Weekly Jobless Claims; Leading Indicators; Existing Home Sales

In addition, two Federal Reserve members offer prepared remarks Monday. They will be the last public Fed comments before next week’s 2-day FOMC meeting.

Mortgage rates remain low. Consider calling or emailing your loan officer to learn more about your current financing options.

Americans continue to get back to work.

Last Friday, in its Non-Farm Payrolls report for the month of March, the Bureau of Labor Statistics announced 120,000 net new jobs created, plus combined revisions in the January and February reports of +4,000 jobs.

The March report marks the 18th straight month of job growth nationwide — the first time that’s happened in 5 years.

The Unemployment Rate dipped in March, too, falling one-tenth of one percent to 8.2%. This is its lowest national Unemployment Rate since February 2009.

Clearly, the jobs market is moving in the right direction. Yet, after the Non-Farm Payrolls report was released Friday morning, stock markets dropped and bond markets gained — the opposite of what a casual market observer would expect.

It happened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The market expected 200,000 jobs created in March at least and the actual reported figure fell short.

Lucky for you, Wall Street’s pain is Main Street’s gain. After the jobs report was released, mortgage rates immediately dropped to a 3-week low, making homes more affordable in Washington State and throughout all 50 states.

The market’s reaction is an excellent example of how important jobs data can be to home affordability — especially in a recovering economy.

The economy shed 7 million jobs between 2008-2009 and has since added more than half of them back. Wall Street pays close attention to job creation because more working Americans means more consumer spending, and more consumer spending means more economic growth.

Rate shoppers caught a bit of a break on the March payroll data. By all accounts, the labor market recovery in underway and, as it improves, higher mortgage rates are likely nationwide. For now, though, there’s a window for low mortgage rates that buyers and would-be refinancing households can try to exploit.

If you’re actively shopping for a home or a mortgage, today’s mortgage rates may be at “last chance”-like levels. Once rates rise, they’re expected to rise for good.

Beginning mid-June 2012, certain current, FHA-backed homeowners will be able to refinance their existing FHA mortgage into a new one, without having to pay the government-backed group’s new, costly mortgage insurance premium schedule.

Earlier this week, the FHA rolled out its new MIP schedule.

Beginning April 9, 2012, new FHA mortgages are subject to a 1.75% upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium of up to 1.25% for loan sizes up to, and including, $625,500; or 1.60% for loan sizes exceeding $625,500.

Upfront MIP is typically added to the loan size as a lump sum. Annual MIP is paid via 12 monthly installments. Both add to the long-term costs of homeownership.

However, the FHA’s new MIP schedules will not apply to all FHA-backed homeowners equally. Homeowners whose FHA mortgages were endorsed prior to June 1, 2009 will benefit from a different, less costly MIP schedule.

For these homeowners in search of a streamline, the MIP schedule is as follows :

• Upfront MIP : 0.01% of the loan size
• Annual MIP : 0.55% of the loan size, with no adjuster for loan sizes over $625,500

The new schedule is detailed in FHA Mortgagee Letter 12-04 and it lowers the cost of FHA Streamline Refinancing for long-time, FHA-backed households in Washington State and nationwide to almost nothing.

As a real-life example, an FHA-backed homeowner whose $100,000 mortgage dates to 2008 could refinance via the FHA Streamline Refinance program and pay just $10 in upfront MIP, with a corresponding annual MIP payment of just $550, or $45.83 monthly.

By comparison, every other FHA-backed homeowner with a $100,000 mortgage pays $1,750 in UFMIP and as much as $1,600 in annual MIP.

The new streamline refinance MIP schedule is in effect for FHA mortgage applications with case numbers assigned on, or after, June 11, 2012. It is not available for loan applications made prior to that date.

There are lots of dates and deadlines in the FHA’s new streamline program. If you’re too early — or too late —  you could miss your optimal refinance window. Talk with your loan officer, therefore, and put a plan in place. You’ll be glad to be prepared.

According to the National Association of Home Builders, the quarterly Home Opportunity Index read 75.9 in 2011′s fourth quarter. More than 3 in 4 homes sold between October-December 2011, in other words, were affordable to households earning the national median income of $64,200.

Never in recorded history have U.S. homes been as affordable on a national level. Even on a regional and local level, affordability soared.

Affordability was highest in the Midwest; 7 of the 10 most affordable markets nationwide were in the nation’s heartland.

The Top 5 most affordable U.S. cities in Q4 2011 were:

1. Kokomo, IN (99.2% home affordability)
2. Fairbanks, AK (97.5% home affordability)
3. Cumberland, WV (96.9% home affordability)
4. Lima, OH (96.0% home affordability)
5. Rockford, IL (95.5% home affordability)

These are each considered “small markets”. The most affordable “major market” was the Youngstown, Ohio area, where 95.1% of homes sold were affordable to households earning the area’s local median income.

Not surprisingly, America’s “least affordable cities” were regionally-concentrated, too, with 7 of the 10 least affordable markets located in either California or Texas.

San Francisco (#3), Santa Ana (#4), and Los Angeles (#5) led for the Golden State but, for the 15th consecutive quarter, the New York metropolitan area took “Least Affordable Market” honors.

Just 29 percent of homes in and around New York City were affordable to households earning the area’s median income last quarter. It’s a large jump from the quarter prior during which 23 percent of homes were affordable.

The rankings for all 225 metro areas are available for download on the NAHB website.

It’s the FHA’s fourth such increase in the last two years.

Beginning April 1, 2012, upfront mortgage insurance premiums will be higher by 75 basis points, or 0.75%; and annual mortgage insurance premiums will be higher by 10 basis points per year, or 0.10%.

For borrowers with a loan size of $200,000, the new MIP will add $1,500 in one-time loan costs, plus an on-going, annual $200 increase in total mortgage insurance premiums paid.

All new FHA loans are subject to the increase — purchases and refinances.

The FHA is increasing its mortgage insurance premiums because, as an entity, the FHA is insuring a much larger percentage of the U.S. mortgage market than ever before.

In 2006, the FHA insured 2 percent of all purchase-money mortgages. In 2011, that figure jumped to 18 percent. Unfortunately, as the FHA has insured more loans, it’s number of loans in default have climbed, too, forcing the FHA to boost its reserves.

Beginning April 1, 2012, the new FHA annual mortgage insurance premium schedule is as follows :

• 15-year loan term, loan-to-value > 90% : 0.60% MIP per year
• 15-year loan term, loan-to-value <= 90% : 0.35% MIP per year
• 30-year loan term, loan-to-value > 95% : 1.25% MIP per year
• 30-year loan term, loan-to-value <= 95% : 1.20% MIP per year

In order to calculate what your FHA annual mortgage insurance premium would be on a monthly basis, multiply your beginning loan size by your insurance premium in the chart above, then divide by 12.

In addition, for loans over $625,500, beginning June 1, 2012, there is an additional 25 basis point increase to annual MIP.

To avoid paying the new FHA mortgage insurance premiums, start your FHA mortgage application today. Existing FHA-insured homeowners will not be affected by the change.

Mortgage insurance premiums will not rise for loans already made.

Foreclosure filings fell 19 percent last month versus one year ago, says foreclosure-tracking firm RealtyTrac. It’s yet one more signal that the U.S. housing market may have already climbed off its bottom.

According to RealtyTrac, a ”foreclosure filing” is any one of the following foreclosure-related events : (1) A default notice on a home; (2) A scheduled auction for a home; or, (3) A bank repossession of a home.

In looking at the January 2012 figures :

• Default Notices were down 22% from January 2011
• Scheduled Auctions were down 19% from January 2011
• Bank Repossessions were down 15% from January 2011

On a monthly basis, however, the numbers weren’t so promising.

Default notices and scheduled auctions were mostly unchanged, but bank repossessions rose 8 percent. The rise in bank repossessions is likely because 2010′s robo-signing controversy has been rectified at the state and lender level.

This trend toward more bank-owned homes is expected to continue through 2012.

As in most months, January’s foreclosure activity was geographically concentrated. Nevada led the nation in Foreclosures Per Capita, followed closely by California. 13 states fared worse than the national average of 1 foreclosure per 624 households. 37 fared better.

The difference in foreclosure frequency among the two groupings was stark :

• Top 13 Foreclosure States : 1 foreclosure per 435 households, on average
• Bottom 37 Foreclosure States : 1 foreclosure per 5,101 households, on average

North Dakota had January’s lowest foreclosure rate nationwide. Just 1 in 63,500 homes was in some form of foreclosure in North Dakota last month.

As a first-time or seasoned buyer in Tumwater , foreclosed homes can be enticing. They’re plentiful and cheap. However, just because a foreclosed home can be bought for a “steal”, that doesn’t mean it’s worth buying. The process of buying a foreclosed homes is different from the process of buying a non-foreclosed home.

The contract-and-negotiation process may be different with a foreclosed property, and foreclosed homes are often sold “as-is”. This means the home you buy at auction could be run-down and defective to the point where it’s uninhabitable.

If you plan to buy a foreclosed home, therefore, have a real estate professional on your side. The internet can teach you much about how the Washington State housing market works, but when it comes to writing contracts, you’ll want an experiened Realtor on your side. For a free mortgage loan pre-approval contact CU Mortgage Division in Olympia at (360) 539-4687.

The housing market has carried forward its year-end momentum.

According to the Census Bureau, on a seasonally-adjusted, annualized basis, January’s Single-Family Housing Starts crossed the half-million unit marker for the second straight month.

This hasn’t happened in close to 2 years and is the latest in a series of strong data that suggests the beleaguered housing market has turned a corner — both nationally and locally in your area.

Although single-family starts slipped 1 percent from December, January’s annualized 508,000 figure represents a 16% spike from January 2011 and is the second-highest reading since April 2010 — the last month of 2010′s federal home buyer tax credit program.

A “housing start” is a new home on which construction has started.

The strength of January’s Housing Starts data surprised Wall Street analysts and is partially responsible for Thursday’s unexpected mortgage rate spike.

In hindsight, though, we should have seen this coming.

Earlier in the week, the National Association of Homebuilders announced that homebuilder confidence had climbed to its highest point since 2007 amid builder reports of rising sales volume and the most foot traffic from buyers in more than 4 years.

In addition, builders expect to sell more homes in 2012 than in 2011.

Builders are building and buyers are buying.

Meanwhile, as another sign of housing market strength, the Census Bureau reports that, in January, Building Permits moved to a multi-year high as well. Permits issued for single-family homes in January rose 1 percent from December, a statistic that suggests housing will continue its run through the spring season, at least.

86 percent of homes break ground within one month of permit issuance.

It’s a good time to be a home buyer. Mortgage rates and home prices are low. Housing market momentum, however, is building. If you’re on the fence about whether to buy a home in King County , ask your real estate agent for additional market information.

The cost of home-ownership may never be as low as it is today. Call CU Mortgage Division today for all your home loan needs in Washington State at (360) 539-4687.