MORTGAGE & FINANCE: 30-Year Fixed-Rate Mortgage Averages 4.08 Percent

In Freddie Mac's results of its Primary Mortgage Market Survey®, mortgage rates continued to follow bond yields higher amid improving economic data. The average 30-fixed rate mortgage averaged 4.08 percent for the week clearing the 4 percent barrier for the first time since October 27, 2011, when it averaged 4.10 percent. 

30-year fixed-rate mortgage (FRM) averaged 4.08 percent with an average 0.8 point for the week ending March 22, 2012, up from last week when it averaged 3.92 percent. Last year at this time, the 30-year FRM averaged 4.81 percent. 

15-year FRM this week averaged 3.30 percent with an average 0.8 point, up from last week when it averaged 3.16 percent. A year ago at this time, the 15-year FRM averaged 4.04 percent. 

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent this week, with an average 0.7 point, up from last week when it averaged 2.83 percent. A year ago, the 5-year ARM averaged 3.62 percent.

1-year Treasury-indexed ARM averaged 2.84 percent this week with an average 0.6 point, up from last week when it averaged 2.79 percent. At this time last year, the 1-year ARM averaged 3.21 percent.  

According to Frank Nothaft, vice president and chief economist, Freddie Mac:
"Mortgage rates are catching up with increases in U.S. Treasury bond yields placing the average 30-year fixed mortgage rate above 4 percent for the first time since the end of October 2011. Bond yields rose over the past two weeks in part due to an improving assessment of the state of the economy by the Federal Reserve, better than expected results of commercial bank stress tests and the likelihood of a second bailout for Greece. Meanwhile,

MARKET TRENDS: Job Growth and Builder Confidence

The latest monthly report from the U.S. Bureau of Labor Statistics shows that the unemployment rate is still on its way down. This is good news for job seekers and home sellers alike.

Will these newly employed be entering the housing market? We've heard it said over and over again over the last year that affordability rates are at historic highs.The current unemployment rate is now at 8.3 percent. Last year the annual average was 8.9 percent, with nearly 14 million unemployed. February saw an increase of 428,000 employed, movement in a positive direction.

This means more Americans today are able to afford buying a home than ever before. Does this mean more buyers for you home?


The latest Census Bureau's American Community Survey indicates that while many Americans can now afford to buy, the price range they can afford may be much lower than some sellers had hoped for.


According to the National Association of Home Builders (NAHB) it takes around $26,430 of annual income to afford a $100,000 home. "In 2012, about 28.9 million households in the U.S. are estimated to have incomes lower than that threshold and, therefore, can only afford to buy homes priced under $100,000," they reported. "These 28.9 million households form the bottom step of the pyramid. Of the remaining 87.5 million who can afford a home priced at $100,000, 23.3 million can only afford to pay a top price of somewhere between $100,000 and $175,000 (the second step on the pyramid)."


The higher the prices go, the smaller the pool of buyers. For many states and towns these average prices are much lower than their area median.


The Department of Commerce's Census Bureau, both homeownership and rental vacancy rates are practically the same as they were in 2010. Does this mean buyers, even at lower income levels, are taking advantage of today's affordable rates and prices?


National vacancy rates in the fourth quarter 2011 were 9.4 percent for rental housing and 2.3

NEIGHBORHOOD NEWS: Long-stalled lab building underway in Longwood

The developers of a long-stalled laboratory building in Boston’s Longwood Medical Area have resumed construction of the $300 million project, part of a burst of development activity in the region’s health care sector.

The complex, to be called Longwood Center, will be a multitiered glass building containing street-level shops and laboratory space at what is now a large vacant lot at Brookline and Longwood avenues.

Builders had stopped construction in the fall of 2008, when the economic downturn left them struggling to find tenants and financing. But health care and medical companies that guarded their cash during the downturn are again in expansion mode, with a range of projects moving forward in Boston and Cambridge.

Longwood Center, which will be on one acre adjacent to the Joslin Diabetes Center, is being developed by a joint venture of Newton-based National Development, Charles River Realty Investors, and Alexandria Real Estate Equities Inc. The companies are soon expected to name another partner.

Dana-Farber Cancer Institute, whose main clinical building is down the street from the Longwood Center site, has expressed interest in occupying the complex.

The project is one of several in the Longwood Medical Area. Brigham and Women’s Hospital is planning to move forward next year with a 360,000-square-foot clinical and laboratory building, and Massachusetts Eye and Ear Infirmary is building a treatment center on Huntington Avenue.

“We’re seeing a lot of activity not only in the Longwood Medical Area, but a lot of the universities’ institutions around the area as well,’’ said Peter Farnum, a senior managing director at the real estate firm Cassidy Turley FHO.

Boston Mayor Thomas M. Menino said in a statement Thursday that Longwood Center promises to create 400 new jobs.

“New research and development space is important to Boston’s strong and growing life sciences

NEIGHBORHOOD NEWS: Developers offer 4 proposals on Greenway site

Four developers submitted bids Friday to develop a state-owned parcel along the Rose Fitzgerald Kennedy Greenway in Boston, with one proposing a museum focused on the city’s history and three others pitching mixed-use buildings with residences, retail shops, and a hotel.

The submissions kick off the Massachusetts Department of Transportation’s second effort to find the right development plan for parcel 9, a triangular sliver of land along the Greenway near Faneuil Hall. The department rejected a previous round of bids for the property in 2009.

The property is located next to a planned public food market in a state-owned building at the corner of Hanover and Blackstone Streets. Each of the four proposals incorporates additional space for the food market in its plans for parcel 9.

Three of the 2009 bidders resurfaced to take a second shot at the property: Boston Museum wants to build a museum with a public food market on the ground floor; DeNormandie Companies is teaming up with Cresset Development on a plan for a food market, restaurants, apartments, and a rooftop garden; and Eamon O’Marah, now with the firm Jones Lang LaSalle, is partnering with Normandy Real Estate on a plan for a 180-room hotel, public winter garden, and a food market.

The fourth proposal was submitted by Upton + Partners of Dedham, which is proposing 120 apartments, retail stores, and additional space for the public food market. The

NEW CONSTRUCTION: Charlestown lofts project ready to be developed

After a 17-year tussle over permits, Boston developer Michael Rauseo is finally moving forward with a project to transform a century-old warehouse in Charlestown into 124 loft-style apartments.

Rauseo, owner of the Suffolk Cos., said he will start a $40 million renovation of the long-vacant Terminal Storage Building at 267 Medford St. this summer, hoping to get the apartments ready for occupancy by fall 2013.

Even by the standards of Boston, where neighborhood opposition and quirky development rules can add years to a building project, Rauseo’s experience borders on the extreme.

After winning city approval in 1995, he hit a legal snag because of the project’s location near what used to be an active industrial port on the Mystic River; its location just inland from the riverfront put it in a state-defined district known as a “designated port area,’’ where law prevented construction of residences.

It took three years to get a state agency to lift restrictions on his property, and that decision was contested by owners of nearby commercial properties, further prolonging the battle. Ultimately the state representative for the area, Eugene O’Flaherty, got legislation passed to eliminate restrictions on the property. Meanwhile Rauseo had a separate battle over the project’s impact on tidelands that didn’t end until a favorable ruling from the Supreme Judicial Court in 2007. “It was an extremely long and arduous permitting process,’’ said Rauseo. “But the project is moving forward and it’s an excellent time to do so.’’

He is among several developers trying to take advantage of a burgeoning market for rental apartments. With vacancy rates low and many people opting to rent instead of buy, apartments are seen as a good investment by developers and lenders that provide financing for such projects.

The building, situated next to Charlestown High, will qualify for tax credits due to its recent inclusion in a federally recognized historic district. The National Park Service granted historical

FOR SALE: Light Filled Newtonville Town Home

MARKET TRENDS: Real estate market is perking up

Like flowers and trees, the region’s spring housing market has blossomed earlier and more vibrantly this year, fed by balmy weather, pent-up demand, and newfound optimism among prospective buyers, real estate specialists say.

Real estate agents are reporting bidding wars for homes in downtown Boston, Cambridge, Somerville, Natick, Roslindale, and other communities. That is coming as a shock to prospective home buyers who believed years of grim housing news would give them an advantage over sellers.

“I’m absolutely, completely blown away as to how the market is behaving,’’ said Andy Silverman, 32, who wants to buy a home in Newton or Brookline, but has found some listings under agreement before he can even arrange tours. “I would describe it as people trying to get on the last lifeboat on the Titanic.’’

Gary Dwyer, owner of Buyer Agents of Boston LLC, said people interested in buying are packing open houses. They are either convinced that the market has finally bottomed out and is now headed up, he said, or eager to ditch their escalating apartment rents for fixed-rate mortgages, which have been rising modestly.

“They know the Boston real estate market isn’t going to crash,’’ said Dwyer. “You are getting a lot more folks saying this is now the time to buy.’’

The state’s home-buying season typically does not gain momentum until March - when inventory begins to grow - but this year’s numbers show many buyers were already out in January and February. Single-family home sales in the Boston area increased by about 37 percent last month compared with February 2010, according to the Massachusetts Association of Realtors. Regional condominium sales - including Essex, Middlesex, Norfolk, Plymouth, and Suffolk counties - were up more than 22 percent, according to the trade group.

The robust market is lifting the hopes of real estate professionals who have endured slumping sales since late 2005 when housing prices peaked in Massachusetts. The number of single-family home sales statewide last year dropped to the lowest level in two decades, according to Warren Group, a Boston company that tracks local real estate.

Regional home values declined about 20 percent between 2005 - when they were at their highest - and early 2009. Since then, prices have bounced along what many housing economists believe is a bottom - currently about 19 percent below the top of the market, according to the S&P/Case-Shiller Home Price Indices, which tracks real estate nationwide. The median price for a single-family home in the Boston area last month was $304,900, 2.1 percent less than during the same period in 2011, according to the Massachusetts Association of Realtors, using data from Shrewsbury-based tracking firm MLS Property Information Network, Inc.

John Ranco, senior sales associate in the South End office of Hammond Residential Real Estate LLC, said there has been a sense of urgency at open houses this year.

“Something is different. There has been a shift in attitude,’’ Ranco said. “I have buyers that are very savvy, very smart, high income. They are stunned that it is not a buyer’s market anymore.’’

Newton real estate broker Marie A. Presti said she recently put a two-family Roslindale home up for sale at slightly below market price, with the stipulation that the buyer pay in cash. Presti said she received 18 offers in five days, with 16 of them from developers. The winning bid - which she would not disclose because the deal has not yet closed - was tens of thousands of dollars above the asking price.

“I never expected to get the reaction that we did,’’ Presti said. Developers are especially interested in

BUYING A HOME: First-Time Homebuyer's Guide

Mike Valdez fits the profile of a savvy first-time homebuyer perfectly. A 34-year-old financial analyst from New Rochelle, N.Y., he and his family had grown sick of living the renter's life. So two years ago he decided to test the market and find a townhouse for his growing family. But despite his financial aptitude, he quickly ran into a setback.

"We found a place we liked and ran the numbers," he says, but the young couple soon discovered that they had underestimated the burden of their college debt. They were forced to back out.

Mike's lesson goes to the heart of what every first-time homebuyer needs to know -- buying a home means so much more than paying a mortgage. 

Fix Your Credit
The first step toward buying a home takes place months before walking into your lender's office. It's crucial to check your credit score at least three to six months ahead of your mortgage application, says Rod Griffin, director of Public Education at Experian. You can request a free copy of the report from each of the three credit bureaus (Experian, TransUnion and Equifax) atannualcreditreport.com.

Even if you don't have sterling credit (generally a FICO score of 720 or above), the most important thing to do is to take stock of what the figure means. "Every score is educational," says Griffin. "It's more about why the number is than what the number is."

This is especially true since there are different proprietary scales used to gauge credit: the Vantage score, for instance, ranges from 501 to 990, while the FICO score runs from 300 to 850. Make sure to read the accompanying credit report to understand what your score actually means. It's also important to check for errors in the report, which can have a negative effect on your credit, and ultimately, your mortgage rate. One in four reports has an error serious enough to prevent homebuyers from getting credit, according to the U.S. Public Interest Research Groups. So get your reports well in advance of the house hunt.

Prepare for Down Payment and Closing Costs
A generation ago, it used to be the norm to put 20 percent down, but with the market in its current state of flux, many first-time homebuyers are finding ways to pay just 3 to 5 percent of the total cost upfront. Federal Housing Act (FHA) loans increasingly have become a popular option for first-time buyers, says Greg Herb, regional vice president of the National Association of Realtors. These competitively low-interest loans are ideal for buyers with less than perfect credit, and because the Department of Housing and Urban Development (HUD) minimizes the risk of default for lenders on these loans, borrowers are only required to put down 3.5 percent of the cost--a far cry from the traditional 20 percent down payment.

Still, there are advantages to paying more at the start. A larger down payment ultimately means smaller monthly bills down the line. Also, if you purchase a conventional loan (i.e.: one that is not backed by a federal agency), paying 20 percent or more upfront will eliminate the need to pay Private Mortgage Insurance (PMI) charges. PMI is insurance for your lender that can be paid upfront or in monthly installments, and is designed to offset your lender's risk in the case that you've paid less than 20 percent on your home. It can cost around $55 a month per $100,000 financed. While it's important to note that FHA loans also carry mortgage insurance with a down payment of under 20 percent, their low barriers to own still make them a good choice for first-time buyers.

Figure How Much House You Can Afford
Your debt-to-income ratio (DTI) is the percentage of your gross monthly income set aside for paying debts. While some loans may qualify you for up to 50 percent of your monthly gross income, it's advisable that you use no more than 30 percent, says Joe Adamaitis, a mortgage banker in Sarasota

REMODELING: How to get a better bid

(MONEY Magazine) -- Budgeting for a large remodeling project presents a bit of a chicken-and-egg problem: You won't have a feel for the cost until you get bids from contractors.

But unless you give pros a ballpark figure from the start, they'll have to guess at what to include in their bids -- and they'll come back to you with a huge range of prices for very different plans."A faucet can cost $200 to $900, a window can be $400 to $1,200," says Madison contractor Mike Gasch. "I need to know where to aim."

To solve this conundrum, do some calculations first.

1. Start with average costs |

When insurance companies need to pinpoint construction costs, they multiply the length by the width of the space and then multiply that by the project's typical cost per square foot.

Albert Paxton, an estimator who provides such data to claims adjusters and contractors, pegs average per-square-foot costs of remodeling jobs at this:

• Kitchen: $174
• Powder room: $133
• Master bathroom: $160
• Family room: $92

2. Tweak to fit the scope

These numbers are for gut remodels, meaning the room is demolished right down to the framing and rebuilt.

9 remodeling tips to make your home feel bigger

With a less involved project -- in the kitchen, say, you might be refacing the cabinets and replacing the countertops and appliances instead of tearing out everything -- cut your number by about 30%, says Paxton.

For a cosmetic update, as in fresh paint on the cabinets plus new lighting and hardware, reduce it by about 60%.

3. Adjust for your location

A plumber working in Manhattan might charge twice the hourly rate of one in Statesboro, Ga.

Same goes for everyone from laborers to architects. In a metro area along the Northeast or Pacific seaboards, add 30% to 40% (use your judgment about your market). In a rural area, especially in the South or Midwest, drop it by 15% to 20%.

4. Modify for style

These figures assume you're buying mid-range fixtures and finishes. If you're going upscale, as in

WORKING WITH YOUR REALTOR: The most important real estate decisions are yours to make

Buying or selling a home can be rewarding, although often stressful. To ease the pain, assemble a group of professionals to help you get the job done.

A good real estate agent can make the project a lot easier. Be sure to make your agent selection carefully. If you don't already have an agent with whom you've had a good prior experience, ask acquaintances who live in the area where you're buying or selling to recommend a well-respected, local agent.

Rapport is a very important component of the agent selection process. Your agent will act on your behalf with prospective buyers, other agents, contractors and inspectors, to name a few. Pick an agent you trust, respect and who has good communication skills.

HOUSE HUNTING TIP: Your agent can help coordinate the many details that need to be managed before and during the sale transaction. However, never forget who's in charge. Your agent works for you.

You rely on your agent's recommendations, intuition and skill based on years of experience working in your marketplace. But your agent is not the decision-maker -- you are.

Most buyers and sellers are busy. You usually don't decide to make a move when you're sitting around with nothing else to do. Buyers' dream homes often come on the market at the least convenient time.

As much as you'd like to turn the decision-making over to your agent, you need to stay current on what is happening during your transaction. Some agents withhold information from their clients because they know they're busy and they don't want to bother them.

This can lead to problems if you find out too late that you can't fix a problem that you could have if you'd only known earlier. Make sure your agent knows that you want to be kept informed throughout the transaction.

The same goes for your dealings with the rest of your team. For example, if you're having your home staged, it's best to meet with the stager and your real estate agent to look at the home and discuss the staging strategy. It's fine to leave this step to the stager and your agent if you really

REDESIGN: 4 things to consider before converting basement

Finished basement image via Shutterstock.

If you're fortunate enough to have a basement in your home, you may have the potential for a substantial amount of additional living space right below your feet. But if you're thinking of converting that cold and unappealing area to a warm and cozy new space, there are several things you'll want to take into consideration first.

Is it safe?

One of the very first things you want to look at with any basement conversion is safety, and that can take a lot of different forms.

Is there convenient and safe access from inside the house in the form of a stairway that meets current building codes, or is there an exterior entrance that works for what you want to use the space for? Is there a sufficient amount of headroom? Would structural supports for the upper floors be in the way, and if so, can they be moved or altered to allow for the necessary space? If you'll be creating a sleeping room, is there safe and legal egress?

Is it dry?

Now we get down to what's a big issue in a lot of basements, and that's moisture. Newer homes are often designed with the proper drainage systems and exterior waterproofing to keep the basement areas dry and ready for building, but many older homes had basements -- "cellars" -- that were designed for cool storage and were never really intended to be occupied.

If you have a basement with ongoing or seasonal moisture issues, you need to consult with an experienced excavation contractor before you get started on a conversion project. See what it would take to have a drain installed and have the exterior walls properly waterproofed, and perhaps have the exterior grade adjusted to change the flow of water runoff around the exterior of the home.

In some cases, you may need to change gutters and downspouts to channel roof water to a different location, or possibly install a sump pump to handle seasonal water issues.

No matter what, be sure that your basement moisture issues are handled before you start closing things up.

What will the space be used for?

Once you've determined that you have a space that's safe and dry, decide what you want to use the converted basement area for. That will make a big difference in your design, and also in your construction costs.

For example, it may be a big game room, in which case you need little more than wall, floor and

SELLING YOUR HOME: 6 rules of curb appeal

It's that time of year again, when I take a moment to talk to all of you who are thinking of putting your home on the market this spring. If real estate's favorite old adage is "location, location, location," then it's got to be followed closely by, "You get only one chance to make a first impression."

You can't change your home's location, but you can certainly do everything within your power to make that first impression a strong one, so let's go over the basics of that all-important must-have for a successful sale: curb appeal.

Start with a step back

You've seen the outside of your house so many times that you don't really see it anymore. So now's the time to look at it with new eyes, from the perspective of a prospective buyer. And if you can't do it objectively, get a friend, a neighbor or your real estate agent to do it for you.

Put yourself in the buyer's shoes, and make a written list of those things that might raise some concerns for you if you were thinking of buying it. And while the front of the house is the primary focal point, don't overlook the sides and rear of the house as well. Here are some things to keep in mind:

Exterior paint: The color and condition of your home's exterior paint job is one of the single most important things to a prospective buyer. The color makes a visceral impact the moment a buyer walks up, and while you might have thought that the hot pink siding with neon purple trim was a great showcase of your individuality when you painted the house, it's going to severely limit the home's appeal.

And no matter what color the house is, if the paint job is faded and peeling, it's an immediate warning sign to buyers that the house hasn't been maintained, so they'll have their magnifying glass out to look for other defects.

If you're handy with a brush and an airless sprayer, you might just want to undertake a repainting project yourself. A long weekend and a few hundred dollars in paint can make a world of difference in how well the home shows and how quickly it sells.

If you don't want to paint the entire house -- or if it doesn't really need it -- just painting the trim, exterior doors, garage door or window shutters can make a big difference as well.

Roofing: A bad roof is another indicator of a general lack of maintenance, and may point a finger at potential structural and even mold problems resulting from leaks. Roofs are expensive to replace, but depending on your market and your desire to reap top dollar from the sale, you may want to take a hard look at the economics of re-roofing.

Talk with your agent about the pros and cons of re-roofing now versus crediting the cost of a new roof to the buyer in escrow.

Driveway and walkways: Driveways are a pretty dominant feature in most homes. Clean any oil-stained concrete, and repair small cracks before they get larger. For asphalt driveways, a seal-coat can often make a big difference in appearance and help prolong the asphalt as well.

For concrete or asphalt that's badly damaged, it's time to be thinking about replacement. You

THE ECONOMY: Foreclosure Inventory Down a Year Ago, Up From Previous Month

Signs that an economic recovery remains on track sent mortgage rates rebounding from record lows this week, but the cost of home loans isn't expected to soar.

Purchase loan applications have picked up lately, to about the same level as seen at the same time a year ago.

Rates on 30-year fixed-rate mortgage averaged 3.92 percent with an average 0.8 point for the week ending March 15, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.

That's up from 3.88 percent last week but down from 4.76 percent a year ago. Rates on 30-year fixed-rate mortgages hit an all-time low in records dating to 1971 of 3.87 percent during the first three weeks of February.

For 15-year fixed-rate loans, rates averaged 3.16 percent with an average 0.8 point, up from 3.13 percent last week -- a low in records dating to 1991 -- but well below the 3.97 percent average seen during the same week a year ago.

Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.83 percent with an average 0.8 point, up from 2.81 percent last week but down from 3.57 percent a year ago. The five-year ARM hit a low in records dating to 2005 of 2.8 percent the week of Feb. 23, 2012.

For one-year Treasury-indexed ARMs, rates averaged 2.79 percent with an average 0.6 point, up from 2.73 percent last week but down from 3.17 percent a year ago. Rates on one-year

SHORT SALES: Short Sale Success: What is an Acceptable Hardship?

A short sale, in most instances, is a complex transaction. However, there are two very simplistic characteristics that every qualified short sale possesses:

1. The house must be valued at less than the homeowner owes on their mortgage debt obligation. In other words, the home must be “underwater”.
2. The homeowner must have a qualified hardship.

It is the second characteristic that we would like to touch upon in this blog post.

One question that we answer frequently is “My house is underwater. Is this an acceptable hardship?”  Unfortunately, the answer is always “No.”

The simple fact that a homeowners mortgage obligation is in excess of their house value is not an acceptable hardship. A Short Selling bank will entertain a short sale when and only when there is a hardship that will, now or in the future, affect the borrower’s ability to pay their mortgage.

The following is a list of acceptable hardships that may be used when submitting a short sale package:

• Mortgage Rate Adjustments
• Loss of Employment or Reduction in Wages
• Business Failure
• Medical Hardship
• Death in the Family
• Divorce/Separation
• Military Service
• Overwhelming Debt Obligations
• Job Relocation

As always, should you have questions as to the acceptability of a hardship scenario, you