Mortgage Rates Rise

Since hitting long-time lows in June, mortgage interest rates climbed during the summer. According to Freddie Mac, fixed-rate, 30-year financing was available in late August for 6.28 percent with .8 points.

Even with the higher rates for fixed-rate mortgages, a number of interesting financing options are being offered. Fifteen-year mortgages have recently been available at less than 6 percent while ARM start rates were under 4 percent at the end of the summer. Although ARM rates will change during the term of the mortgage, their liberal qualification standards may allow borrowers to obtain larger loan amounts.

Home Sales Remain Strong

Although mortgage rates have risen since June, demand for real estate continues at high levels.

Existing home sales in the second quarter were running at the second-strongest pace on record according to the National Association of Realtors, with 36 states and the District of Columbia posting increases from a year ago.

For the first time since reporting began in 1982, NAR says home prices in the second quarter increased in all metropolitan areas for which data was available compared with the same period a year earlier.

The association's second-quarter report, covering changes in 126 metropolitan statistical areas, showed 40 areas with double-digit annual increases in median existing-home prices and no metro areas with price declines.

New home starts hit a 17-year high in July, according to the National Association of Home Builders, when the seasonally-adjusted annual rate reached 1.87 million units. This is 1.5 percent above June and, says NAHB, it's "the strongest rate of housing production since April of 1986."

National averages, of course, may differ from local patterns. For the latest community trends, consumers should speak with their local real estate broker.

Plastic Blocks Create Solid Homes

Remember those interlocking building blocks from childhood? Bigger versions are now being used to build homes nationwide.

Insulating concrete forms (IFCs) look like two squares of polystyrene separated by plastic braces. The forms fit together to form a wall and then concrete is poured into the hollow areas between the squares. The result, say advocates, is a thick concrete wall that offers several advantages when compared with traditional construction.

According to the Insulating Concrete Form Association, the combination walls are durable, rot-resistant, strong and energy efficient -- plus they reduce exterior noise by a third.

"In fire wall tests," adds the association, "ICF's stood exposure to intense flame without structural failure longer than did common frame walls. The polystyrene foam used in most ICF forms is treated so it will not support combustion." Many insurance carriers, says the group, are now offering a discount on a home owner's policy for ICF homes.

Gas Water Heaters Offer New Protections

Imagine an accident where gasoline or another flammable liquid spills out. In some situations, such vapors can be ignited if they reach a nearby water heater, thus endangering both people and homes.

Since July, however, new water heaters must include a flame arrestor. According to the Consumer Product Safety Commission, this device "prevents flashback fires by trapping and burning dangerous gas vapors inside of the heater, while preventing ignition of the vapors in the room."

Such ignitions cause nearly 800 residential fires yearly, according to Commission estimates. The fires typically occur when homeowners use flammable liquids, usually gasoline, for cleaning purposes, or when a flammable liquid leaks or is spilled near the water heater. When the vapors come in contact with the appliance's burner or pilot light, the vapors ignite, causing a fire.

"The new water heaters will save lives and property and reduce the number of terrible burn injuries that are caused by these fires," said CPSC Chairman Hal Stratton.

Because millions of gas water heaters were manufactured before the new standard took effect, Stratton warns that gasoline should never be stored or used indoors (in a basement or garage) where vapors can ignite. Gasoline should be stored in tightly-closed, properly-labeled, non-glass safety containers away from ignition sources and out of the reach of children.

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