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Homebuilders are feeling worse about the market for new homes nationwide.

With construction credit tight and competition from foreclosures increasing, the National Association of Homebuilder’s Housing Market Index slipped 1 point in September, falling to levels just below the index’s 12-month average.

The HMI measures homebuilder confidence nationwide. It’s the result of 3 separate homebuilder surveys, each designed to measure a specific facet of the homebuilder’s business.

1. How are market conditions for the sale of new homes today? 
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

Each component survey showed a drop-off from August. Responses fell 1 point, 2 points, and 2 points, respectively. Together, September’s composite reading was 14 out of a possible 100 points. Readings over 50 are considered favorable. 

The HMI not been above 50 since April 2006.

With homebuilder confidence low — and stagnant — buyers of new homes Philadelphia in should remain alert for “deals”. Builders are more likely to offer free upgrades and other concessions to incoming buyers. The availability of such deals may increase as the seasons change and as the year comes to a close.

Low mortgage rates are making new homes attractive, too. Last week, 30-year fixed rate mortgage rates fell to their lowest levels of all-time. As compared to just 8 weeks ago, 30-year fixed rate mortgage payments are lower by 5 percent at all loan sizes, down $27 per month per $100,000 borrowed.

How healthy is the air in your home?

According to the U.S. Environmental Protection Agency, a common class of airborne toxins known as Volatile Organic Compounds (VOCs) is ruining indoor air quality, and causing some U.S. homeowners to become dizzy, asthmatic, and ill.

VOCs are gases emitted by certain, common household products, including paint and paint strippers, cleaning supplies, and copiers and printers — even when the aforementioned products aren’t in use. You can find VOCs “everywhere” because organic chemical compounds have become essential in everyday life.

VOCs are what give cars that “new car smell”. They’re also the cause of “Sick Building Syndrome“.

As a homeowner in Huntingdon Valley , VOCs in your home can make you sick. Therefore, the EPA advises homeowners to take the following steps to reduce VOC levels in their respective homes and improve and home air quality.

1. When using VOC-emitting products such as paints and paint thinners, keep a well-ventilated home.
2. Avoid purchasing cleaning supplies or paint in bulk. Buy only what you need.
3. Never mix household cleansers. It may yield unintended results.
4. Throw out “dry cleaning bags” as soon as possible. Most dry cleaning makes use of harmful VOCs.
5. Do not burn tobacco products inside your home. 

There are a half-dozen other recommendations, too. They’re listed on the EPA website.

You can’t remove VOCs from your home, but you can minimize their negative effects. And keep your household as healthy as possible.

It’s not just 30-year fixed rate mortgages that are posting all-time lows these days. The 15-year mortgage has been plunging, too.

If you’ve ever considered a 15-year loan term, it’s a terrific time to talk to your lender. According to Freddie Mac’s weekly mortgage rate survey of roughly 125 U.S. lenders, at 3.30 percent, the 15-year fixed rate mortgage is at its lowest point in history.

The 3.30% rate doesn’t come for free, however. Based on average loan term nationwide, borrowers in Pennsylvania choosing to “go 15” should expect to pay 0.6 discount points at closing. 1 discount point is equal to 1 percent of your loan size.

With low rates, 15-year fixed rate mortgage can be enticing; a primary benefit is the huge reduction in the long-term interest costs of your loan. The downside, though, is that monthly mortgage payments can be relatively large.

At today’s mortgage rates, a 15-year fixed rate loan carries a principal + interest payment of $705.10 per $100,000 borrowed — a 46% increase over a comparable 30-year fixed rate loan. If you can manage the bigger payments, though, you’ll reap $47,000 in interest payments savings per $100,000 borrowed in paying off your loan in full.

$47,000 per $100,000 borrowed is a huge amount of savings and those saved monies can be used to fund items such as college, home improvement, and retirement, among others.

That said, the 15-year fixed rate mortgage is not for everyone.

Because it comes with higher monthly payments, the 15-year fixed rate mortgage may add financial stress to your household budget. And, once you have committed to a 15-year loan term and its payments, you’re can’t “go back”. Your lender won’t revert your loan to a 30-year schedule without a refinance, and a refinance could be costly.

On an annual basis, foreclosure filings fell last month. As compared to August 2010, last month’s foreclosure filings dropped 33 percent. “Foreclosure filing” is a catch-all term, comprising default notices; scheduled auctions; and bank repossessions.

The study was published by foreclosure-tracking firm RealtyTrac and this month’s report reveals a slowing rate of foreclosure within each of the Top 10 most foreclosure-heavy states.

All news is not good, however. 

On a monthly basis, foreclosure filings spiked, led by a surge in default notices. Default notices made their biggest one-month jump since August 2007 on the way to a 9-month high last month. Default notices are the first step in the foreclosure process so this jump may foreshadow a large number of bank repossessions as foreclosures “make their way through the process“.

It’s also noteworthy that just 6 states housed half of the nation’s bank repossessions last month.

• California : 18 percent of bank repossessions
• Florida : 8 percent of bank repossessions
• Georgia : 7 percent of bank repossessions
• Michigan : 6 percent of bank repossessions
• Texas : 6 percent of bank repossessions
• Arizona : 6 percent of bank repossessions

As a home buyer in Elkins Park , foreclosures can save you money. The National Association of REALTORS® reports that distressed homes sell with typical discounts of 20 percent versus comparable, non-distressed homes. However, buying a home from a bank is a different process from buying a home from a “person”. Contract negotiations are different and it can take months to finally close on a foreclosed home.

If you’re buying a foreclosed, therefore, enlist the help of a professional real estate agent. Real estate agents can help you navigate the sometimes-complicated world of foreclosures, and help you come out ahead.

It’s no secret. Rates are low right now. And, it’s not just mortgage rates, either — all types of rates are scraping rock-bottom. Borrowing rates, lending rates and savings rates are at or near their all-time lowest levels.

As a homeowner in Bensalem , one way to take capitalize on today’s low rates is to apply to refinance your home. But there are other ways to take advantage, too.

In this 5-minute piece from NBC’s The Today Show, you’ll learn of a half-dozen ways to exploit the current rate environment, including:

• Refinance a car loan from a high rate to a low rate, for cheap, in an hour
• Balance transfers between credit cards with teaser rates lasting up to 20 months
• Move some savings to an “online” bank where savings rates are higher

The interview’s theme is to examine both where you’re spending and saving your money, and make sure you’re doing what’s best for your budget.

Federal Reserve Chairman Ben Bernanke has pledged to hold the Fed Funds Rate near 0.000% until at least 2013. So long as the Fed Funds Rate is low, there will be places you can save.

For the first time in a year, homeowners with adjusting mortgages are facing rising mortgage rates. The interest rate by which many adjustable-rate mortgages adjust has climbed to its highest level since September 2010, and looks poised to reach higher.

This is because of the formula by which adjustable-rate mortgage adjust.

Each year, when due for a reset, an adjustable-rate mortgage’s rate changes to the sum of fixed number known as a “margin”, and a variable figure known as an “index”. For conforming mortgages, the margin is typically set to 2.250 percent; the index is often equal to the 12-month LIBOR.

LIBOR stands for the London Interbank Offered Rate. It’s a rate at which banks lend to each other overnight.

Expressed as a math formula, the adjusting ARM formula reads :

(New Mortgage Rate) = (2.250 percent) + (Current 1-Year LIBOR)

LIBOR has been rising lately, which explains why ARMs are adjusting higher as compared to earlier this year. There has been considerable stress on the financial sector and LIBOR reflects the uncertainty that bankers feel for the sector. 

LIBOR last spiked after the collapse of Lehman Brothers in 2008 amid global financial fears. Analysts expect LIBOR to rise into 2012 because of bubbling concerns in the Eurozone.

Despite LIBOR’s rise, though, most adjusting, conforming ARMs are still resetting near 3 percent. For this reason, homeowners with ARMs in New Jersey may want to consider letting their respective loans adjust with the market.

This is because an adjusting mortgage rate near 3 percent may be better than what’s available with a “fresh loan” — even as 5-year ARMs rates make new all-time lows. Unlike a straight refinance to lower rates, an adjusting loan requires no closing costs, requires no appraisal, and requires no verifications.

So, if you have an adjustable-rate mortgage that’s set to reset this season, don’t rush to refinance it. Talk to your lender and uncover your options. Your best course of action may be to stay the course.

Everyone lives in a flood zone.

Flooding is the top-ranked natural disaster in the United States, with a dozen potential causes ranging from heavy rains, tropical storms and hurricanes to new housing developments and rain after fire. Floods can occur in all 50 states and, when they do, they leave massive damage in their wake.

Flood damages exceed $2.7 billion annually.

As a homeowner, you carry homeowners insurance to protect against theft and loss. Typical homeowners insurance, however, excludes damages from flooding. Homeowners in Philadelphia , therefore, should make sure to have a separate flood insurance policy. And once that policy is in place, there are other steps you should follow, too.

First, make a log of your possessions, either on paper or by video. In your log, include everything that you own of value. Next, if you own jewelry, have it appraised and store the appraisal; if you own appliances, log the serial numbers and attach original receipts.

Then, buy a safe-deposit box at a bank, for example, and store your possession log. 

All of this information matters because, in the event you need to make a claim, you’ll have an easier time dealing with the insurance adjuster. It’s hard to prove possession of items that have been washed away by flood waters, after all.

You’ll also want to share this list with your insurance agent in advance so your policy is made with the proper amount of coverage.

Floods can strike anywhere and, as many people learn the hard way, standard homeowners insurance does not include flood coverage. If you’re without flood coverage, talk to your insurance agent about adding a flood policy.

Because many policies don’t take effect until 30 days from purchase, this is one form of insurance you’ll want to buy in advance.

Home affordability slipped slightly last quarter, dragged down by rising mortgage rates and recovering home prices in Pennsylvania and nationwide.

The National Association of Home Builders reports a Q2 2011 Home Opportunity Index reading of 72.6. This means that nearly 3 of 4 homes sold last quarter were affordable to households earning the national median income of $64,200.

Q2 2011 marks the 10th straight quarter — dating back to 2009 — in which the index surpassed 70.

Prior to 2009, the index had never crossed 70 even one time.

However, we must remember that the Home Affordability Index is a national survey. From region-to-region, and town-to-town, home affordability varied.

In the Midwest, for example, affordability was highest. 14 of the 15 most affordable markets nationwide were spread throughout Ohio, Michigan, Illinois and Indiana. Only Syracuse (#9) cracked the list from other regions. 

The top 5 most affordable cities in Q2 2011 were:

1. Kokomo, IN (95.8%)
2. Wheeling, WV (94.7%)
3. Lansing, MI; East Lansing, MI (94.4%)
4. Bay City, MI (94.3%)
5. Youngstown, OH; Warren, OH; Boardman, OH (93.7%)

By contrast, the Northeast Region and Southern California ranked as the least affordable markets. Led by the New York-White Plains, NY-Wayne, NJ area, 7 of the 10 least affordable areas were in New York, New Jersey, and California. For the 13th consecutive quarter the New York metro area was ranked “Least Affordable”.

Just 25.2 percent of homes were affordable to households earning the area median income there.

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

Mortgage guidelines appear to be tightening with the nation’s largest banks.

In its quarterly survey to senior loan officers nationwide, the Federal Reserve uncovered that a small, but growing, portion of its member banks is making mortgage approvals more scarce for “prime” borrowers.

A prime borrower is described as one with a well-documented payment history, high credit scores, and a low monthly debt-to-income ratio.

Of the 53 responding “big banks”, 3 reported that mortgage guidelines “tightened somewhat” last quarter. This is a tick higher as compared to prior quarters in which only 2 banks did.

46 banks reported guidelines unchanged from Q1 2011.

When mortgage guidelines tighten, it adds new hurdles for would-be home buyers in Philadelphia. Tighter lending standards means fewer approvals, and that can retard home sales across a region.

Just don’t confuse “tighter standards” with “oppressive standards”.

While it is more difficult to get approved for a purchase home loan in 2011 as compared to 2006, the same basic rules apply:

• Show that you have a history of paying your bills on time
• Show that your income is sufficient to cover your obligations
• Show that you can make a downpayment

And the good news is that, once approved, you’ll benefit from some of lowest mortgage rates in history.

Last week, the average 30-year fixed mortgage was below 4.250% for buyers willing to pay points, and the average 5-year ARM was below 3.000%. The 15-year fixed rate loan was similarly low.

For as long as delinquency rates remain high, expect mortgage guidelines to continue to tighten through the rest of 2011 and into 2012. Therefore, if you’re a “fringe” borrower looking at a purchase in the fall or winter season, consider moving up your time frame. Changing guidelines may render you ineligible for a mortgage.

The U.S. economy is no longer adding new jobs.

Last Friday, in its monthly Non-Farm Payrolls report, the Bureau of Labor Statistics reported that the U.S. economy added exactly zero new jobs in August as the national Unemployment Rate held steady at 9.1 percent.

Despite the “zero” reading, the jobs figures were in the red. This is because the BLS issued revisions to its June and July figures that adjusted the two months of data down by 58,000 jobs.

Economists had expected a monthly reading of +75,000. Their estimates missed.

The weaker-than-expected jobs data fueled a stock market sell-off that pushed stocks down 2.5% and spurred a bond market rally. 

Mortgage bonds — the securities on which mortgage rates in Elkins Park are based — improved Friday ahead of Labor Day Weekend, and carried that momentum into Monday. While the U.S. markets were closed, global investors snapped up “safe” assets in fear of a second wave of financial crises. Already this year, markets have grappled with sovereign debt concerns in Greece and Portugal.

Now, Italy is facing similar international scrutiny, forcing markets to question the health of the Eurozone.

Concerns like these tend to benefit home buyers and mortgage rate shoppers and that’s exactly what we’re seeing.

Mortgage rates are falling this week. Rates may reverse quickly, however.

Later this month, the Federal Reserve and White House are each expected to add stimulus to the U.S. economy. If they do, it may push investors back into risky assets including equities at the expense of safe securities. This would spark a bond market sell-off and send rates higher.

Possibly by a lot.

Therefore, if you’re currently looking for home or comparing rates between lenders, consider executing sooner rather than later. Mortgage rates are low today, but low rates may not last. And when rates reverse higher, it will likely happen fast.