The Psychological Tactics That Supermarkets Use On Customers

More than 50% of supermarket purchases are "impulse buys". You may not have known that, but the supermarkets do. And they've built their stores accordingly. A fool and his grocery cart are soon filled to the brim.

In this 6-minute video from NBC's The Today Show, you'll learn how supermarkets use everything from packaging to placement so that customers spend more of their money with each store visit.

Among the supermarkets' tricks:

• Placing flowers and bakery at the front of the store to "make you salivate"
• Specific "deal wording" (e.g. Buy 5 for $5.00) meant to entice larger purchases
• Placing staples on top and bottom shelves, leaving middle shelves for impulse products

The piece also recommends shopping a supermarket in a clockwise-fashion. It helps you spend less time in the store.

We're all mindful of our household budgets. Watch this video to save more money on your next trip for groceries.

New Home Sales Crater In January, Opening The Door For Deals With Builders

Not all housing reports are sunny, it seems.

In its monthly New Home Sales release, the U.S. Department of Commerce showed a 13 percent drop-off in annualized new construction sales between the months of December and January.

It's the biggest one-month drop in New Home Sales since May 2010.

In addition, the supply of new homes for sale spiked higher to 7.9 months last month.  "Home supply" is defined as the amount of time it would take to sell the complete "for sale" inventory at the current pace of sales.

In December, the supply measured just 7.0 months,

Don't fret the news, however. For buyers of new construction in Atlanta , falling New Home Sales figures can be terrific. Weaker markets put pressure on the nation's home builders to sell their respective homes more quickly. To reach that goal, builders often discount prices and/or offer free upgrades to buyers. 

Some of that action may already be in effect.

Despite falling volume, the New Home Sales report showed that new homes are selling faster than in recent months. The median time required to sell a newly-built home dropped to 7.8 months in January -- a figure well below January 2010's reading of 13.9 months.

It suggests that builders are getting better at locating buyers, and moving property.

Therefore, if you're shopping for a new construction and see one worth buying, get to it. Not only will the home likely sell soon if it's priced right, but an increase in mortgage rates will make the home more expensive to finance.

Every 0.250% increase to rates adds $15 monthly per $100,000 borrowed.

Existing Home Supply Down 40% In Last 6 Months

Home resales rose another 2.7 percent last month, according to the National Association of REALTORS® monthly Existing Home Sales report.

An "existing home" is a home that's been previously occupied and is not considered new construction.

The number of existing homes sold on a rolling 12-month basis is now at its highest point since May 2010, the month before the federal homebuyer tax credit ended. It's also up some 40% since July 2010, the month after the tax credit ended.

But that's not the biggest story in the Existing Home Sales report. The precipitous decline in home inventory deserves more attention.

At the current pace of sales, the complete, national home resale inventory will be sold in 7.6 months. This is close to 5 months faster as compared to last year's peak, and well below the 2-year home supply average of 9.0 months. There more buyers in the market, it seems, and fewer homes from which they can choose.

Total home resale inventory is down to just 3.38 million homes nationwide -- the fewest in 12 months.

There were other interesting statistics in the official Existing Home Sales report, including a break-down of purchases by buyer-type.

• First-time buyers accounted for 29% of purchases, down from 33% in January
• Repeat homebuyers accounted for 48% of purchases, up from 47% in January
• Investors accounted for 23% of of purchases, up from 20% in January

In addition, distressed sales -- foreclosures and short sales -- made up 37 percent of the market.

Over the next few days, more housing data will hit the wires and it's expected to show similar strength to January's Existing Home Sales report. With falling supplies and a growing base of move-up buyers, home prices in Atlanta and around the country are expected to rise in the coming months ahead.

Cost of Living Reaches An All-Time High, Pressures Mortgage Rates Higher

Mortgage rates are up 0.875% since mid-November, causing home buyer purchasing power across Atlanta to fall more than 10 percent since.

Persistent concerns over inflation are a major reason why and this week's Consumer Price Index did little to quell fears. CPI rose for the third straight month last month.

Wall Street was not surprised.

As the economy has picked up steam since late-2010, the Federal Reserve has held the Fed Funds Rate near zero percent, and kept its $600 billion bond plan moving forward. The Fed believes this is necessary to support the economy in the near-term. 

Over the long-term, however, Wall Street worries that these programs may cause the economy may expand too far, too fast, and into runaway inflation.

Inflation pressures mortgage rates to rise.

Inflation is an economic concept; defined as when a currency loses its value.  Something that used to cost $1.00 now costs $1.05, for example. It's not that the goods themselves are more expensive, per se. It's that the money used to buy the goods is worth less.

Because of inflation, it takes more money to buy the same amount of product.

This is a big deal in the mortgage markets because mortgage rates come from the price of mortgage bonds, and mortgage bonds are denominated, bought, and sold in U.S. dollars. When inflation in present, the dollar loses its value and, therefore, so do mortgage bonds.

When mortgage bonds lose value, mortgage rates go up.

Inflation fears are harming Georgia home buyers. The Cost of Living has reached a record level, surpassing the former peak set in July 2008. Mortgage rates would be rising more right now if not for the Middle East unrest.

So long as inflation concerns persist, mortgage rates should trend higher over the next few quarters. If you're wondering whether to lock or float your mortgage rate, consider locking today's sure thing.

Going On Vacation? Don't Tell The Burglars!

Want to help keep your home safe from burglars while on vacation? One smart way is to refrain from announcing your plans on various social networks such as Facebook. 

There's other common-sense tips, too, as shared in this 4-minute video from NBC's The Today Show.

Drawing from a series of interview with former convicts, you'll learn that there's more to keeping your home safe than just locking the doors and windows, and setting the alarm system for "away". You'll also want to make sure your home looks "lived in".

And some of these tricks you may have never thought of. 

For example, while on vacation:

• Make sure a neighbor is picking up your mail and newspapers daily
• If it snows, have a friend drive tracks in your driveway, or shovel it clean
• Set inside lights to a timer, giving the appearance someone being home

In addition, if you don't have a safe for valuables, consider moving them to a child's room. It's among the last places a burglar looks.

You can't make your home 100% safe from intruders but you can make your home a tougher target. Just use some common sense and follow the tips in the video.

Fed Minutes Show Lower Unemployment And Higher Growth For 2011 and 2012

The Federal Reserve released its January 25-26, 2011 meeting minutes Wednesday afternoon. Georgia mortgage rates have been in flux since.

Fed Minutes are comprehensive recaps of Federal Open Market Committee meetings; a detailed look at the debates and discussions that shape our nation's monetary policy. As such, they're released 8 times annually; 3 weeks after the most recent FOMC meeting.

Fed Minutes can be viewed as the unabridged version of the succinct, more well-known "Fed Statement" that's released to markets immediately post-adjournment.

Just how much more lengthy are Fed Minutes?

• The January 25-26, 2011 statement contains 395 words
• The January 25-26, 2011 meeting minutes contains 6,916 words

If the Fed Statement is an executive summary, the Fed Minutes is a novel. And, the extra words matter.

When the Federal Reserve publishes its minutes, it's offering clues about the group's next policy-making steps.  As an example, in the January minutes, the Fed improved its outlook for economic growth; lowered its projections for the Unemployment Rate; and removed its concern for deflation.

In addition, the Fed discussed the potential for food-and-energy-cost-induced inflation, but labeled it as a minor economic risk at this point in time.

Bond markets are mixed on the text of the Fed Minutes.

Although the Fed indicates a willingness to allow inflation to occur, it appears ready to act in case inflation goes too high. One way that the Fed responds to rising inflation is to raise the Fed Funds Rate and many economists believe this will start happening by late-2011 or early-2012.

Single-Family Housing Starts Fell In January, Despite What The Headlines May Have Told You

Annualized Single-Family Housing Starts dropped 1 percent in January to 413,000 units nationwide, it's lowest reading almost 2 years.

A "Housing Start" is defined as a home on which construction has started. 

Now, if you had only seen the Housing Starts story in the headlines today, you wouldn't have known that single-family starts fell at all. It's because of how the story is being reported.

Most commonly, newspaper headlines are reading something similar to "Housing Starts Jump 14.6%" with the lead paragraph making mention that "housing starts are at their highest levels in 4 years".

It's a true statement, but it's misleading, too.

This is because, despite the Census Bureau reporting Housing Starts by property type -- single-family, multi-family, and apartments -- the media often lumps them into a single data set.

It's a categorization that helps investors in homebuilder stocks, but it does little for everyday Atlanta home buyers. The huge majority of buyers aren't buying multi-units or whole apartment buildings -- they're buying 1-unit homes.

Here's how January's Housing Starts broke down by type:

• Single-Family Homes : Down 4,000 units, or -1%
• 2-4 Unit Homes : Negligible change
• Apartment Buildings : Up 46,000 units, or +80%

Clearly, the surge in Housing Starts can be attributed to the rapid rise in the 5-unit-or-more sector. Single-Family Starts were weak, by comparison.

Even with all of this noted, however, we can't even be certain that the January Housing Starts data is accurate anyway. A footnote in the government's report shows that, although single-family starts are said to have decreased 1 percent, the data's margin of error is ±8.6%.

This means that the true Single-Family Housing Starts reading may be anywhere from -9.6% to +7.6%. The data is throw-away. Housing Starts may have actually increased in January, but we won't know until revisions are offered later this year.

Home Builders Report Higher Sales Levels In January

Homebuilder confidence in the market for newly-built, single family homes appears stable as the spring buying season gets underway in Atlanta.

The confidence reading is recorded and reported monthly by the National Association of Homebuilders. For the 4th straight month, the group's Housing Market Index reads 16.

As a market indicator, Housing Market Index has been tracked for more than twenty years and reports on a 1-100 scale. A value of 50 or better indicates "favorable conditions" for home builders.

HMI hasn't read higher than 50 since April 2006.

Broken down, the Housing Market Index is actually a weighted composite of 3 separate surveys measuring current single-family sales; projected single-family sales; and foot traffic of prospective buyers.

February's surveys showed slight improvement as compared to January, overall.

• Single-Family Sales : 17 (+2 from from January)
• Projected Single-Family Sales : 25 (+1 from January)
• Buyer Foot Traffic : 12 (unchanged from January)

It's notable that the current sales levels were higher in February, and that projected sales levels for the next 6 months are higher, too.

For home buyers Georgia across , this month's Housing Market Index reading may foreshadow tougher negotiations in the months ahead with builders. The likelihood of getting discounts and free upgrades may be diminished as builders see their respective sales levels grow, and as the economy expands.

Coupled with rising mortgage rates, home buyer purchasing power may never be as high as it is today. 

Therefore, if your plans call for buying a newly-built home this year, think about moving up your time frame. Builder confidence appears to have bottomed. As it rises, so should home prices.

Retail Sales Rise For 7th Straight Month; Mortgage Rates Worsen

If consumer spending is a keystone element in the U.S. economic recovery, a full-on rebound is likely underway.

Tuesday, the Census Bureau released its national January Retail Sales figures and, for the seventh straight month, the data surpassed expectations. Last month's retail figures climbed 0.3 percent as total sales receipts reached an all-time high.

It's good news for the economy which is scratching back after a prolonged recession, but decidedly bad news for people in want of a mortgage across the state of Georgia. This includes home buyers and would-be refinancers alike.

Because consumer spending accounts for the majority of the U.S. economy, Retail Sales growth means more economic growth and that draws Wall Street's dollars toward riskier investments, including equities, at the expense of safer investments such as mortgage-backed bonds.

On the heels of the Retail Sales report's release, bond prices are falling this morning. As a consequence, mortgage rates are rising. It's the same pattern we've seen since mid-November -- "good news" about the economy sparks a stock market frenzy, casuing mortgage bonds to rise.

A sampling of other recent good-for-the-economy stories include:

• Corporate earnings are rising quickly (Marketwatch)
• Existing Home Sales up 12% month-over-month (CNN Money)
• The Fed says the economy looks "brighter" (Bloomberg)

The days of 4 percent, 30-year fixed rate mortgages are over. 5 percent is the new market benchmark. Unless the economy keeps showing strength. Then, that number may rise to six percent.

If you're thinking of buying or refinancing a home, consider how rising rates will hit your budget. You may want to take that next step sooner than you had planned -- if only to protect your monthly payments.

How To Replace And Install A New Kitchen Faucet

Want to replace your kitchen faucet? It's a job for which you could hire a plumber, or, with just a little bit of craftsman skill, it's a project you could finish yourself.

Watch this video from the Lowe's YouTube channel. You'll get step-by-step instruction on how to take out an old faucet and how to install a new one. The supplies you'll need are minimal, too.

In 3 minutes, the video covers:

• How to shut the kitchen water supply off and drain residual water from the pipes
• How to detach and remove the old kitchen faucet
• How to align the new faucet and reconnect to the water lines

There's some good tips along the way, too, including how to make sure you don't accidentally connect the hot water supply to the cold-water faucet.

If you're uncomfortable working with your home's plumbing and would like a referral to a plumber , please just ask. I'm happy to help how I can.

Mortgage Rates Return To April 2010 Levels

Mortgage rates are surging.

Over the last 7 days, conventional, 30-year fixed rate mortgage rates have jumped 24 basis points, or 0.24%, according to Freddie Mac's weekly Primary Mortgage Market Survey.

It's the largest 1-week spike in mortgage rates in recent history.

The 30-year fixed rate mortgage now averages 5.05% nationally. This is much, much higher than what we saw last November when mortgage rates were 4.17% and looked headed to the 3s.

That's not the case today. In fact, it's the opposite. 

Mortgage rates have risen quickly and fiercely this year. As of this morning, mortgage rates are higher over 9 consecutive days, marking the longest mortgage rate losing streak in the last 6 years, at least.

Note, however, that when you call your loan officer or bank, you may not be quoted the same 5.05% rate as shown by Freddie Mac. This is because Freddie Mac-reported rates are national averages. Any given mortgage rate may be higher or lower depending on its region. 

As an illustration, look how this week's rates breaks down by area:

• Northeast : 5.07 with 0.7 points
• Southeast : 4.99 with 0.9 points
• North Central : 5.09 with 0.6 points
• Southeast : 5.06 with 0.6 points
• West : 5.02 with 0.8 points

In other words, the rate-and-fee combination you'd be offered in your home town of Atlanta is different from what you'd be offered if you lived somewhere else. In the Southeast, rates tend to be low and fees tend to be high; in the North Central U.S., it's the opposite.

The good news is that, as a mortgage applicant, you can have your pricing whichever way you prefer. If getting the absolute lowest mortgage rate is what's most important to you, have your loan officer structure your loan as in the "Southeast Style". Or, if you prefer to have as few closing costs as possible and don't mind slightly higher rates, ask for that type of set-up instead.

Either way, consider locking your rate as soon as possible. If rates keep rising, it won't be long before they touch 6 percent.

Foreclosure Activity Drops Throughout The Most Foreclosure-Heavy States

Foreclosure activity is slowing. According to foreclosure-tracker RealtyTrac, the number of foreclosure filings dropped 17 percent on an annual basis last month. Monthly filings ticked higher 1 percent after a combined 23 percent decrease through November and December 2010.

The phrase "foreclosure filing" is a catch-all term, comprising default notices, scheduled auctions, and bank repossessions. 

January marked the third straight month of sub-300,000 filings after 20 straight months above it.

As compared to January 2010, six of the nation's 10 most foreclosure-heavy states posted an annual foreclosure filing reduction. The remaining four showed modest worsening.

It's noteworthy that states like California and Florida posted declines of 7 percent and 54 percent, respectively, and that Nevada posted a relatively-low 3 percent gain. These three states have been at the leading edge of foreclosure activity since 2007. Their subsequent recoveries, therefore, may foreshadow a better housing market ahead.

Or, this may be lasting effects from the "robo-signer" controversy.

Regardless, home buyers in Georgia continue to clamor for distressed homes.

According to the National Association of REALTORS®, properties in various stages of the foreclosure and short sale process are selling at discounts in the range of 10-15 percent so it's no wonder they now account for 36 percent of all home resales. Buying a foreclosure can be a great "deal".  They can be more trouble and cost than they're worth.

Therefore, If you're in the market for a foreclosed home , be sure to speak with a licensed real estate agent. The process of buying a distressed home is different from buying a non-distressed home. An experienced professional can help make sure you negotiate your best possible price.

Mortgage Rates Rise For The 7th Straight Day

Mortgage markets worsened for the 7th straight day Tuesday, equaling the longest losing streak of the last 5 years.

Conventional, 30-year fixed mortgage rates are now scratching 5 percent, with FHA mortgage rates running roughly the same.

This is a huge increase from just 11 weeks ago when mortgage rates were riding an 8-month-long hot streak, and appeared headed into the 3s. Then the Federal Reserve intervened.

On November 3, as additional support for markets, the Fed announced its second round of bond buys, a $600 billion program dubbed QEII -- short for Quantitative Easing, Round II. Wall Street got spooked on the news; investors feared runaway inflation.

That's when low rates ended. Here's why:

(A) Inflation makes the U.S. dollar lose its value,

And, (B) U.S. mortgage bond payments are paid in U.S. dollars.

Therefore, (C) Inflation makes mortgage bond repayments lose their value.

When mortgage bond repayments are worth less, bond demand falls among the global investor set and that causes bond prices to fall along with it. When bond prices fall, mortgage rates rise and that's exactly what we're seeing right now.

Since the Fed's QEII announcement, mortgage rates have soared and home affordability is taking a hit.

Given recent trends, it's probably safe to declare the Refi Boom "officially over" and the era of low mortgage rates may be over, too.  Home prices may move up or down in Atlanta this year, but rising mortgage rates could render the point moot. If you're looking for a great "deal" with low, long-term payments, the time to get in contract may be now.

Because of rising rates, homeowners have lost roughly 10% of their purchasing power since November.

Image Copyright (c) 123RF Stock Photos

Adjustable Rate Mortgages Adjusting To 3.000 Percent Right Now

If your ARM is due to adjust this spring, your best move may be to allow it. Don't rush to refinance -- your rate may be adjusting lower.

It's because of how adjusted mortgage rates are calculated.

First, let's look at the lifecycle of a conventional, adjustable rate mortgage:

1. There's a "starter period" of several years in which the interest rate remains fixed.
2. There's an initial adjustment to rate after the starter period. This is called the "first adjustment".
3. There's a subsequent adjustment until the loan's term expires. The adjustment is usually annual.

The starter period will vary from 1 to 10 years, but once that timeframe ends, and the first adjustment occurs, conventional ARMs enter a lifecycle phase that is common among all ARMs -- regular rate adjustments based on some pre-set formula until the loan is paid in full, and retired.

For conventional ARMs adjusting in 2011, that formula is most commonly defined as:

(12-Month LIBOR) + (2.250 Percent) = (Adjusted Mortgage Rate)

LIBOR is an acronym for London Interbank Offered Rate. It's the rate at which banks borrow money from each other. It's also the variable portion of the adjustable mortgage rate equation. The corresponding constant is typically 2.25%.

Since March 2010, LIBOR has been low and, as a result, adjusting mortgage rates have been low, too.

In 2009, 5-year ARMs adjusted to 6 percent or higher. Today, they're adjusting near 3.000 percent.

That's a big shift. 

Therefore, strictly based on mathematics, letting your ARM adjust this year could be smarter than refinancing it. You may get yourself a lower rate.

Either way, talk to your loan officer. With mortgage rates still near historical lows, Atlanta homeowners have interesting options. Just don't wait too long. LIBOR -- and mortgage rates in general -- are known to change quickly.

Home Remodeling Projects That You Should Skip

Home remodeling is back in vogue.

With contractors dropping prices in most U.S. markets, and a resurgence in confidence among homeowners, home remodeling projects are expected to top $125 billion this quarter.

Not all renovations will be "worth it", according to Remodeling Magazine's 2011 Cost vs Value report, but some projects should never be started -- especially when said projects render a home somewhat un-sellable.

For example, if installing a new toilet requires that the discharge pipes run along the living room ceiling, the project should be re-engineered, or skipped entirely.

A recent renovation article on CNNMoney.com listed several others "never do" projects.

• Don't add a 4th/5th bedroom to a home with just one bathroom.
• Don't build a bedroom with no closet space.
• Don't make common rooms disproportionately large or small to one another.

And, for all projects, no matter what the details, try to keep the home's traffic flow intact. Nobody likes to walk through bedrooms to get from the kitchen to the living room.

Home remodeling can be a less expensive alternative to moving, and can improve a property's resale value. But keep in mind -- just because a project is featured on HGTV, for example, that doesn't make it a Do-It-Yourself. Some projects can be handled on your own, but most should not.

With the help of a professional, you'll be sure the job is done properly.

If you need the name of a local contractor or specialist, please reach out anytime. I am happy to help you with a referral.

Unemployment Rate Drops To Lowest In 2 Years

Americans are getting back to work. Sort of.

This morning, at 8:30 AM ET, the Bureau of Labor Statistics released its Non-Farm Payrolls report for January 2011. More commonly called "the jobs report", the government's data showed a large decrease in the number of working Americans as compared to December, but a sizable drop in the Unemployment Rate.

The job growth figures were much lower than consensus estimates:

• Expected job growth in January : +148,000 jobs
• Actual job growth in January : +36,000 jobs

January's Unemployment Rate surprised analysts, too, but not in a bad way, falling from 9.4 percent in December to 9.0 percent last month. This is the nation's lowest Unemployment Rate in nearly 2 years.

Today's jobs report is rough news for home buyers and rate shoppers in Atlanta. Shortly after the report's release, Wall Street is attributing the low jobs number to "bad weather" and is choosing to focus on the strong Unemployment Rate instead.

U.S. stock futures are now rising ahead of open, an increase that will come at the expense of the bond markets. Indeed, mortgage-backed bonds are losing this morning already.

Conforming mortgage rates are expected to start the day at least +0.125% from Thursday's close and, if momentum continues, could tack on an additional +0.125% before today's closing bell.

The government's report 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 and 2009 and fewer than 1 million of those were recovered in 2010. It's a data point Wall Street watches closely because more working Americans means more consumer spending, and more consumer spending means more economic growth. Consumers account for 70% of the U.S. economy, after all.

More workers also means more taxes paid to federal, state and local government, and, in theory, fewer loan charge-offs from banks. These, too, keep the economic engine moving forward, spurring more spending and job growth. 

If you have not yet locked a mortgage rate, consider locking one today. On the heels of today's jobs data, 30-year fixed rates will scratch at their highest levels of the year.

Mortgage Guidelines Starting To Loosen?

Mortgage lending appears to be loosening. At least for now.

In its quarterly survey of member banks, the Federal Reserve asks senior loan officers around the country whether their "prime" residential mortgage guidelines had tightened within the last 3 months.

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

Of the 54 responding banks, just 2 said its guidelines had tightened during the period October-December 2010. That's less than 4 percent. And, by comparison, 95 percent of banks said guidelines remained "basically unchanged".

The remaining banks reported a loosening.

It's a positive sign for the housing market, and for home buyers in Atlanta and nationwide. If banks have stopped raising the hurdles of home loan approval, in theory, more would-be buyers will be approved.

It's much tougher to get a home loan versus 5 years ago. Delinquencies and defaults have changed how banks review loan applications. Today's underwriters are more conservative with respect to household income, total assets and overall credit scores.

Even as compared to January 2010, approval standards are higher : 

• Minimum credit score requirements are higher
• Downpayment/equity requirements are larger
• Maximum allowable debt-to-income ratios have been lowered

Although mortgage rates remain low, qualification standards do not. Based on last quarter's banking survey, however, mortgage applicants in Georgia may find approvals easier to come by soon. Low rates don't matter, after all, if you're not eligible to get them.

The housing market is strong and lending looks to be loosening. It should help fuel the demand for homes in 2011, which will push supplies down and lead prices up. For homeowners that qualify, therefore, the best time to purchase a home may be sometime this spring.

Practical Advice : How To Help Your Home Sell Faster

In December, home sales reached an 8-month high, recovering from the losses of last summer. Market momentum is positive across Georgia , but that doesn't mean every home is selling quickly -- only some of them are.

So, if you're a home seller and want (or need) to get your home sold quickly, take a listen to this 3-minute interview from NBC's The Today Show. It's loaded with practical sales advice for sellers.

As examples:

• How to price your home relative to comparable homes for sale
• Using home inspections to keep your contract on-track for closing
• How much should be spent on your "home photos" that are shown online

The interview also covers about the 3 key places of a home on which to spend money -- the kitchen, the living area, and the front facade. And for good reason -- they're emotional hooks for buyers that help sell homes.

In any market, selling a home can be a challenge. It can be easier by applying common sense.

Pending Home Sales At The Highest Levels Since April 2010

Another day, another strong report for housing.

The Pending Home Sales Index climbed 2 percent in December, according to the National Association of REALTORS®. A "pending home sale" is an existing home under contract to sell, but not yet closed.

Pending Home Sales are up for the fifth time in 6 months. The December reading is now its highest since the federal home buyer tax credit's April 2010 contract deadline, and the figure is well north of the Pending Home Sales Index 3-year average.

Coupling this data with December's strong Existing Homes Sales report (+12%) and its strong New Home Sales report (+17%), it's clear that the housing market has past its trough and is in Recovery Mode.

Even consumer confidence is at an 8-month high.

On a regional basis, December's Pending Home Sales Index varied as compared against November. The South region led the way, and the West region lagged.

• Northeast Region: +1.8%
• Midwest Region : +8.0%
• South Region : +11.5%
• West Region : -13.2%

Home buyers would do well to study last month's Pending Home Sales Index. It offers clues of what to expect during the spring buying season. For example, according to the National Association of REALTORS®, 80 percent of homes under contract close within 60 days.

Therefore, we can look at the December Pending Home Sales Index and project, with a high level of confidence, that home sales will be higher throughout February and March on a units-basis.

Furthermore, because the Existing Home Sales and New Home Sales reports show that housing stock is falling nationwide, spring buyers in Atlanta will notice find more competition for the available housing stock. As the Supply-and-Demand curve shifts towards sellers, home prices rise.

In other words, there's no rush to buy a home, but as the year progresses, home prices are expected to rise, as are mortgage rates. This one-two combination will impact home affordability negatively. And the higher that mortgage rates go, the worse the damage.

Your home-buying dollar won't go as far in 2011's second half as it will go right now. If you have plans to buy a home in 2011, consider moving up your time-frame.