Natural disasters from tornados, hail, winds, and floods caused widespread damage throughout the country in 2011, and more home owners may soon see their homeowner's insurance premiums rise because of it. 

The insurance industry has faced heavy losses in recent years from natural disaster, and insurers may be forced to raise costs of premiums, particularly in the Southeast and Midwest, Robert Hartwig, president of the Insurance Information Institute, warns. 

"We've had record losses for four straight years," Hartwig told USA Today. "My sense is that premiums will probably rise 4 percent to 5 percent."

The average annual cost of homeowner's insurance in 2008 was $791 and increased to $807 in 2010, according to data by the Insurance Information Institute. Hartwig told USA Today that he predicts the average premium for 2011 will be about $840. 

Source: “Home Insurance Rates Likely to Go Higher,” USA Today

For nine consecutive weeks, the 30-year fixed-rate mortgage has been hovering at or below record lows of 4 percent, pushing housing affordability for home buyers even higher. 

But will these low rates stick around much longer? 

The Federal Reserve has vowed to keep rates low through 2013 so rates likely will hang around for a few more months, at least, but whether mortgage rates will stay at the current record-lows, many experts say it’s unlikely. 

The 30-year fixed-rate mortgage is expected to inch up to an average 4.5 percent for 2012 and increase to 5.4 percent in 2013, according to Freddie Mac economists’ forecasts. 

While that forecast means rates are expected to move higher in the coming months, the rates will still be low by historical standards, economists told the Los Angeles Times. For comparison, 30-year rates averaged more than 16 percent in 1981 and 1982. What’s more, until 2000, rates typically were above 8 percent, Freddie Mac notes. 

Despite the drop in rates, however, many home buyers have been unable to take advantage of the low rates. Lenders’ tightening of their underwriting standards for loans in the recent years following the housing crisis has shut some buyers who have poor credit, low down payments, or unsteady employment from securing a loan at today’s low rates. Freddie Mac had predicted home-purchase applications to comprise two-thirds of all mortgage applications by the end of 2011. But the Mortgage Bankers Associations says that instead about 80 percent of the mortgage applications came from home owners who wanted to refinance.  

Source: “Low Mortgage Rates Likely to Continue Through 2012, Experts Say,” Los Angeles Times 

Lenders are increasingly becoming more accepting over short sales as they seek more solutions to help struggling home owners avoid foreclosure, according to a recent article at MSNBC.com. 

"Foreclosure sales are pretty devastating," Faith Schwartz, executive director of Hope Now, a resource for cash-strapped home owners, told MSNBC.com. "We'd much prefer a [loan] modification, but if [home owners] don't quality, then the next best alternative is deed-in-lieu or short sales." 

Short sales and foreclosures increased in 2010, but in 2011, short sales continued to climb even more (increasing 26,000 nationwide) while foreclosures dropped by 255,000, according to Hope Now data. 

Banks are realizing that a short sale is far more preferable than a foreclosure in most cases. For one, banks tend to make more money off of a short sale vs. foreclosure: The average price of a foreclosed home in the second quarter of 2011 was $164,217 compared to $192,129 for a short sale. Also, foreclosures tend to be more costlier to a lender in legal and administrative resources too. 

Neighborhoods also tend to benefit more from a short sale than a foreclosure because short sales tend to sell for less of a discount and, unlike a foreclosure, they don’t often sit vacant, which can make them prime targets for vandalism and depressing nearby property values, housing experts say. 

Source: “Increase in Short Sales Give Market a Little Breathing Room,” MSNBC.com

The worst for the housing market may finally be over, according to housing experts in a recent article in Kiplinger. After median home price have dropped nearly 40 percent nationwide, a rebound is taking shape -- although, housing experts say, the market may stay flat for awhile before gradually ticking up. 

According to housing experts in a recent Kiplinger article, here are some predictions for the real estate market in the coming year:

Home prices stabilize: Mark Zandi, chief economist at Moody's Analytics, predicts that home prices nationwide may still drop another 3 to 5 percent in 2012, but the new year will most likely finally bring a leveling off of home prices before gains start to take shape in 2013. When markets do begin to stabilize in the new year, “price appreciation tends to spread unevenly, creating a lot of confusion about where the recovery is occurring and when,” David Stiff, chief economist at Fiserv Case-Shiller, told Kiplinger. “Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.”

Housing affordability high: Housing affordability -- the ratio of median home prices to median family income -- will likely remain at record levels in 2012. Homes in many cities are “substantially undervalued,” the Kiplinger article notes. That may even lead to a mini bubble with double-digit spikes in prices, such as an increase of 10 to 15 percent in a given year in some markets, housing experts say.  

Low mortgage rates: Helping to keep affordability high, low mortgage rates are expected to continue on in 2012 -- at least the first part of the year, economists predict. The 30-year fixed-rate mortgage, the most popular among home buyers, has been hovering under a 4-percent average the past few weeks, staying in record low territory. Rates are expected to stay between 4 to 5 percent in 2012, predicts Guy Cecala, publisher of Inside Mortgage Finance, an industry publication. 

Sales increases: The National Association of REALTORS^® has already been showing a tick up in sales taking shape with increases in existing-home sales during the summer and early fall of 2011. High inventories of homes continue to flood the market but a drastic slowdown in new-home building the past three years is “gradually easing the surplus,” the Kiplinger article notes. 

Foreclosures: Foreclosures remain the problem and still plague many markets. After a slowdown with lenders processing the paperwork, foreclosures have began to pick up once again. About 1.84 million home loans are 90 days or more delinquent and 2.17 million have finished the foreclosure process but aren’t up for sale yet, according to RealtyTrac data. Alex Villacorta, director of research and analytics at Clear Capital, told Kiplinger that he predicts regardless of the downward price pressure caused from foreclosures, overall home prices won’t fall as long as lenders bring additional foreclosures to the housing market at a steady pace. 

Source: “What’s Ahead for Home Prices in 2012,” Kiplinger

A survey of 109 economists released this week by Zillow Inc. forecasts that U.S. home prices may fall further under the weight of foreclosures, bouncing back no sooner than 2013 even with mortgage rates at historic lows.

Zillow researchers say U.S. home values probably registered their smallest drop in four years in 2011, with prices expected to hit bottom in late 2012 or the first quarter of 2013 and begin rising by 3 percent a year through 2016.

"Negative equity, unemployment, and low consumer confidence remain the key factors delaying a true recovery," Zillow Chief Economist Stan Humphries says.

Source: “Foreclosures Weighing on Prices May Push Housing Rebound to 2013," Bloomberg

The “shadow inventory” -- properties that are in foreclosure limbo and have not yet come to light on banks’ balance sheets -- has fallen slightly over the last year. Shadow inventory as of October 2011, the latest data available, stood at 1.6 million units or a 5-month supply. In October 2010, shadow inventory was at 1.9 million, or a seven-month supply, CoreLogic reports. A one-month supply of shadow inventory is considered more healthy for the housing market, a level that hasn’t been seen in years.

“The shadow inventory overhang is a large impediment to the improvement in the housing market because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults,” Mark Fleming, chief economist for CoreLogic, said in a statement.

The states with the largrest inventories are Florida, California, and Illinois, which have more than a third of the nation’s shadow inventory, according to CoreLogic. 

Source: CoreLogic

About 76 percent of home owners believe their home is worth more than their agent’s recommended listing price -- that’s up from 73 percent last year, according to a new survey conducted by HomeGain of real estate professionals and home owners. 

On the other hand, 68 percent of home buyers say homes are overpriced, with 32 percent saying homes are overpriced by more than 10 percent. 

“Home buyers and sellers continue to remain apart as to home valuations with the vast majority of home owners thinking their homes are worth more than their agents and the market are telling them,” Louis Cammarosano, general manager of HomeGain said in a statement.

Source: “Three Quarters of Owners Continue to Overvalue,” RISMedia

More “accidental” landlords are surfacing as home owners turn their underwater homes into rentals to try to come up with some extra cash. But some of these accidental landlords are still unable to keep up with their mortgage payments and may become delinquent on their mortgage. So what’s this mean for the person renting their property? 

Some renters may suddenly be served with an eviction notice when they discover the property they are renting is being foreclosed upon, and only having days to vacate. 

One new Web site, CheckYourLandlord.com, allows renters to check rental properties in the U.S. to see if there are any notices of default filed against the property.

Renters, or real estate professionals who represent them, can also stop at the county recorder’s office to check the status of a property. 

Source: “Renters Can Search Their Home for Foreclosure Notices for Free at CheckYourLandlord.com,” Marketwire

Home prices have fallen to 2002 levels and mortgage rates are at record lows — so why are the number of first-time home buyers decreasing instead of increasing?

First-time home buyers used to account for about half of all housing sales, but over the past year, they’ve made up only about a third of buyers, according to a recent New York Times article. 

"The obstacles facing first-time buyers are big, and it's changing the way they look at home ownership," Dan McCue, research manager at Harvard University's Joint Center for Housing Studies, told The New York Times. 

Higher downpayment requirements, job insecurity, and tougher credit standards may all be holding back first-time home buyers — which tend to be dominated by young professionals. The median down payment for a single-family home in 2002 was 4 percent in nine major metro areas, but now stands at 22 percent, according to Zillow.com. 

What’s more, while mortgage rates are hovering at record lows, fewer buyers are able to qualify. About one-third of households have credit scores that aren’t good enough to qualify for a mortgage. The median required credit score from FICO Inc. has increased from 720 in 2007 to 760 currently, according to The New York Times article. 

Source: “Home Market Being Held Back by Wary First-Timers,” The New York Times

The Occupy movement, which has sparked protests across the country over the past few months on a multitude of economic and social issues , is waging protests against foreclosures this week.

On Tuesday, hundreds of former home owners, along with supporting Occupy protesters, re-entered their homes that had been foreclosed upon by banks in a national day of action that the Occupy Movement called “Occupy Our Homes.” The protest over foreclosures occurred in about 25 cities across the country, including Minneapolis, Los Angeles, Denver, Atlanta, New York, and Miami, Inman News reports.

The protesters are blaming the banks for the foreclosure crisis and for not stepping in to do more loan workouts for home owners who lose their jobs or face medical hardships and can no longer afford their homes. 

“Banks would rather let houses deteriorate than renegotiate loans with those who make them homes and build our communities,” a press release by the Occupy movement stated. 

One Riverside, Calif., protester re-entered his June 2011 foreclosed home on Tuesday joined by other Occupy Los Angeles supporters: "The bank is either going to work with me on loan modification or it will have to get the police to throw me out," the former home owner told Inman News. 

Source: “Occupy Movement Focuses on Foreclosures,” Inman News and Occupy Together