YOUR HOME

Housing recovery fuels demand for remodeling, improvement products.

Manufacturers of appliances and products for the home are hoping to scramble for a larger share of the household product market as a modest housing recovery is also bumping up home related industries. Companies that sell such diverse products as power tools, air conditioners, carpet and furniture reported stronger sales in the last quarter of 2012.

That's good news for the economy in general, although the upward trend can be overstated. Truck maker Oshkosh reports a 36 percent rise in some areas, but President Wilson Jones warns that sales are still 70 percent below the peak before the housing crisis.

Americans are now spending more to build and refurbish their homes. Retailers and manufacturers are now cautiously optimistic that the housing market will continue to improve and help to fuel the economy.

In the fourth quarter of 2012, Honeywell International sales rose 6 percent on heating and cooling systems. United Technologies, the maker of Carrier heating and cooling equipment, said orders rose 20 percent. DuPont reports that demand for its Sorona carpeting fiber was stronger than before thanks, in part, to the housing recovery.

At Stanley Black & Decker, sales of power tool products rose 5 percent last year, a sign that Americans are investing in home improvements.

Ethan Allen Interiors did even better. Earnings from furniture sales in the fourth quarter rose 22 percent from a year earlier, according to The Wall Street Journal.

Daffodils aren't the only things that grow in spring. So do home sales.

If you start to notice 'For Sale' signs cropping up and moving vans in the neighborhood you know it must be spring. About 40 percent of home sales will be taking place from now to June when the spring season gets people motivated to find a house, move and settle in before fall. Spring is a good time to shop for a house since there are typically more homes on the market and a lot more to look at. Sellers want to catch the spring sales wave, too.

This year, it remains a good year to buy says emeritus economics professor Karl Case of Wellesley College. "It's certainly the best time in five years to buy," Case told Boston.com. "Interest rates are really low. Prices have come down a long way."

Meanwhile sellers will be happy to know it's a better time to sell. Average selling prices rose 8.3 percent in December compared to a year earlier, according to a report by CoreLogic, the housing data firm. This is the largest gain since May 2006.

Though sellers aren't getting the prices they would have asked before 2006, they are getting substantially more than last year or the year before.

Everyone is a bargain shopper these days looking for good deals on bank owned or foreclosure properties.

But foreclosure properties were down nationally 7 percent December to January 2013 and that means fewer new bargains are on the table. In California, new legislation brought default notices down 77 percent in January. This drop means that California buyers will find fewer homes to choose from. That could drive prices up.

If you are thinking of selling your house and moving to a place in the sun, there are still bargain properties available in states like Florida, Nevada and Arizona, states that continue to have higher foreclosure rates than the national average.

In any case, here's the overall outlook for spring: Experts say the numbers suggest buyers might be seeing fewer homes on the market and that might mean higher prices. However, with home prices slipping and sliding with the spring rain, don't expect a dramatic market turnaround any time soon. Meanwhile, sellers should be able to find a buyer but they must be realistic about pricing.

Ask the expert:
The seller of a home we like says assuming his mortgage would be a good deal for us. Would it?

Maybe. We can surely examine the deal. But with interest rates so low don't get your hopes too high.

"Assuming a mortgage" means that the buyer takes over the mortgage at the existing interest rate and repayment period. This can be a great option if the mortgage has an interest rate well below the market. For example, if the current market interest rate is 6 percent and the mortgage you want to assume is 4 percent, it's a good deal. But, today, interest rates are very low and rates are generally better than they have been in years. Older mortgages are likely to have higher rates than loans you can take now.

Another consideration should be the seller's equity. The seller will want to be paid for the value he already has in the property. A buyer must come up with a mortgage buyout payment that will give the seller money for that value or equity. That can't be part of the mortgage assumption, so it will have to be paid in cash or with still another loan.

Remember, too, when you assume a mortgage you don't assume the sellers credit rating. You still have to apply for the loan and meet all the lender's requirements. You'll find conventional lenders don't allow assumable mortgages. You can still assume an FHA or VA loan, in most cases, but as the buyer you have to meet income and credit requirements.

One thing you must do before assuming such a loan is to make sure the loan is not delinquent. Any delinquent payments become YOUR delinquent payments if you assume the loan. You'll have to apply for a loan modification if you don't have the cash sto pay up the delinquencies.

An FHA or VA loan actually can be assumed without the property being sold. This arrangement leaves the seller with a huge amount of liability. In some cases the seller could end up owing on the loan, but not owning the property.

© 2013 TLC Magazine Online, Inc.