Freddie Mac recently released their fourth-quarter refinance analysis and it shows that 85 percent of homeowners who refinanced their mortgages during the fourth quarter of 2011 maintained or reduced their principal balance by paying-in additional money at the closing table. Frank Nothaft, Freddie Mac’s vice president and chief economist, said savvy homeowners are taking advantage of some of the lowest fixed-rates in more than 60 years to lock in interest savings. According to Nothaft, the typical borrower who refinanced during the fourth quarter reduced their interest rate by approximately 1.4 percentage points. During the fourth quarter, 37 percent of homeowners who refinanced their mortgage maintained about the same loan amount and 49 percent reduced their principal balance. The percentage of cash-in borrowers was the highest in the 26-year history of the analysis. More here.

According to the Thomson Reuters/University of Michigan consumer sentiment index, Americans’ confidence in the economy rose again in January. The overall reading for the month rose to 75.0 from 69.9 in December. It was the highest reading since February 2011 and a better-than-expected improvement. Richard Curtin, the survey’s director, said the recent gains in confidence are dependent on continued gains in employment and, as long as the job market continues to improve, real consumer spending should post a 2.1 percent gain in 2012. The component of the index measuring current economic conditions rose nearly five points and the gauge of consumer expectations was at its highest level since May 2011. More here and here.

According to the Mortgage Bankers Association’s Weekly Applications Survey, the Market Composite Index, which measures total mortgage loan application volume, surged 23.1 percent last week from the week before. Refinance activity was up 26.4 percent and reached its highest level since August of last year. The Purchase Index also saw improvements, rising 10.3 percent from the week before. Michael Fratantoni, MBA’s vice president of research and economics, said interest rates dropped due to continued anxiety regarding the economic situation in Europe. The drop in rates led to the spike in refinance activity and brought buyers back to the market following the holiday season, according to Fratantoni. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances fell to 4.06 percent from 4.11 percent the week before. It was the lowest 30-year rate in the history of the survey. More here.

For the first time in nearly a year, more Americans say they expect their financial situation to improve over the next 12 months than say it’ll stay the same. Fannie Mae’s Monthly National Housing Survey shows an increasingly positive attitude toward the housing market and the broader economy among surveyed Americans. The results of the survey found a six percent jump in the number of people who say the economy is on the right track and a four percent spike in the number of participants who expect home prices to increase in the next year. Doug Duncan, vice president and chief economist at Fannie Mae, said there’s been a marked improvement in consumer sentiment regarding the direction of the economy, personal finances, and future home price expectations following the fourth-quarter pickup in the economy. On average, Americans say they expect home prices to rise by 0.8 percent in the next 12 months, up from 0.2 percent in November. Also, 71 percent of Americans say it is a good time to buy a home, which is a 3 percent increase from the month before. More here and here.

The U.S. Census Bureau and the Department of Housing and Urban Development’s New Residential Sales report for November shows sales of new single-family homes rose 1.6 percent over October’s pace to a seasonally adjusted annual rate of 315,000. The improvement puts new-home sales 9.8 percent above last year’s estimate of 287,000. There were 158,000 new homes for sale at the end of the month, which represents a six-month supply at the current sales pace. The median price for a new house in November was $214,000; the average price was $242,900. More here.

A panel of industry analysts, insiders, and experts brought together for a recent mortgage-banking conference expressed hope for the housing market but cautioned that the rate of recovery will vary greatly depending on location. Eric Fox, vice president of statistical and economic modeling for Veros Real Estate Solutions, said price-to-rent ratios, demographic trends, and affordability combined with other variables such as schools and neighborhoods will determine the pace of recovery for local real estate. But, despite the number of factors affecting individual markets, the gathered analysts said now is a great time to buy a home due to high affordability and mortgage rates near record lows. More here.

 The S&P/Case-Shiller Home Price Indices shows the U.S. National Home Price Index up just 0.1 percent from the second quarter. But, though the national index registered a drop of 3.9 percent from the third quarter of last year, the rate of decline improved over the year-over-year decrease seen in the second quarter. In September, the annual rate of change improved from August in 14 of the 20 cities covered by the index. David Blitzer, chairman of the index committee at S&P Indices, said the plunging collapse of prices seen in 2007-2009 seems to be over, though a stronger economy would be needed for any sustained recovery. The Federal Housing Finance Agency also found prices relatively flat in the third quarter. Their index recorded a 0.2 percent increase. Andrew Leventis, FHFA’s principal economist, said most regions of the country saw relatively stable home values during the third quarter. More here and here.

According to Lawrence Yun, chief economist for the National Association of Realtors, the best affordability conditions since 1970 combined with a significant level of pent-up demand will lead to an improvement in home sales and the overall housing market in 2012. Yun believes existing-home sales will rise nearly five percent next year and new-home sales, which have been hurt by excess inventory of previously owned homes, will increase 23 percent. Increasing sales and falling inventory should positively effect home prices, which Yun believes will rise in 2012. Yun said home prices have shown a definitive stabilization pattern in most areas which should lead to moderate appreciation next year. More here.

Data released by the U.S. Census Bureau shows homeownership rose between the second and third quarter of this year, increasing to 66.3 percent from 65.9 percent the previous quarter. Homeownership peaked in 2004 at nearly 70 percent, though it stayed between 64 and 65 percent for much of the 40 years prior to the housing boom. The new data finds the homeownership rate for adults under the age of 35 at 38 percent, down from 42 percent in 2007. The rate for people between the ages of 35 and 44 was also down, dipping from 65.2 percent last year to 63.4 percent now. John McIlwain, a senior fellow for housing at the Urban Land Institute, said the data suggests there is still a desire to own, though future buyers may wait until they’re in their mid to late 30s before purchasing a home. The Midwest had the highest rate of homeownership at 70.3 percent, followed by the South and Northeast. Homeownership was lowest in the West. More here.

The Federal Housing Finance Agency is easing the terms of the Home Affordable Refinance Program in order to help the estimated 11 million homeowners who have been making their mortgage payments but are unable to refinance because their loans are worth more than their homes. The HARP program has helped more than 890,000 homeowners since its launch but has been criticized for inefficiency. The changes hope to streamline the program and include allowing homeowners that owe more than 125 percent of the market value of their home to get new loans. Edward DeMarco, acting director of the FHFA, said the goal is to create refinancing opportunities for borrowers while bringing some stability to the housing market. More here and here.