The Fed Funds Rate has been near zero percent since December 2008.

For the third consecutive month, the Fed Funds Rate vote was nearly unanimous. Just one FOMC member dissented in the 9-1 vote, objecting only to the language used in the Fed's official statement.

In its press release, the Federal Reserve noted that the the U.S. economy has "expanding moderately" since its last meeting in December 2011, adding that the growth is occurring despite "slowing in global growth" -- a reference to ongoing economic uncertainty within the Eurozone.

The Federal Reserve expects moderate economic expansion through the next few quarters but is wary of "strains" from global financial markets, and these three threats to the U.S. economy :  

1. The housing sector remains "depressed"
2. The unemployment rate remains "elevated"
3. Fixed business investment has "slowed"

On the positive side, the FOMC said that household spending is rising and inflation remains in-check. The group also believes that employment will gradually improve nationwide going forward.

The Federal Reserve neither introduced new economic stimulus, nor discontinued existing market programs.

Immediately following the FOMC's statement, mortgage markets rallied, pressuring mortgage rates to fall. 

Mortgage rates remain near all-time lows and, for homeowners willing to pay points plus closing costs, conventional, 30-year fixed rate mortgages can be locked at below 4 percent. If you're in the process of buying or refinancing a home in Washington , it's a good time to lock a mortgage rate with your lender.

The FOMC's next scheduled meeting is a one-day event slated for March 13, 2012.

The housing market finished 2011 with strength, and is carrying measurable momentum into 2012. 

According to data from the National Association of REALTORS®, on a seasonally-adjusted, annualized basis, December's Existing Home Sales climbed by 120,00 units overall from the month prior on its way to an 11-month high.

An "existing home" is a home that's been previously occupied; that cannot be considered new construction.

After 4.61 million existing homes were sold in December, there are now just 2.38 million homes for sale nationwide. The last time the national home supply was this sparse was March 2005.

At today's sales pace, the complete, national home inventory would be exhausted in 6.2 months -- the fastest pace since before the recession. A 6.0-month supply is believed to represent a market in balance. 

The December Existing Home Sales report contained noteworthy foreclosure and short sale statistics, too :

• Foreclosures sold at an average discount of 22% to market value
• Short sales sold at an average discount of 13% to market value
• Together, foreclosures and short sales accounted for 32% of all home sales

Clearly, "distressed homes" remain a large part of the U.S. housing market.

Furthermore, in its report, the real estate trade group also noted that one-third of homes under contract to sell nationwide succumbed to contract failure last month. That's up from 9% one year ago.

Contract failure occurs for a multitude of reasons, most notably homes appraising for less than the purchase price; the buyer's failure to achieve a mortgage approval; and, insurmountable home inspection issues. December's high failure rate underscores the importance of getting pre-approved as a buyer, and of buying homes in "good condition".

For today's home buyer , December's Existing Home Sales figures may be construed as a "buy signal". Home supplies are dropping and buyer demand is rising. This is the basic recipe for higher home prices ahead.

If your 2012 plans call for buying a home, consider that home values throughout Washington and Idaho are expected to rise as the year progresses. The best values of the year may be the ones secured this winter.

Data was strong across all categories last week.

• Home Resales :Existing Home Sales rose 5%
• New Homes : Single-Family Housing Starts rose 4%
• Builders : Home Builder Confidence rose to a 5-year high
• Jobs : Jobless claims fell to lowest level since April 2008
• Inflation : CPI remained in balance

In addition, European leaders moved closer to a final resolution on the Greek sovereign debt default situation.

Overall, the action gave investors reason for optimism in the U.S. economy, and economies abroad. This drew money away from the U.S. mortgage bond market, which caused mortgage rates to rise.

Freddie Mac reports the average 30-year fixed rate mortgage slipping 0.01 percentage points to 3.88% nationwide, with an accompanying 0.8 discount points and complete set of closing costs. These costs are slightly higher as compared to the week prior.

1 discount point is equal to one percent of the borrowed loan size.

Freddie Mac's weekly mortgage rate survey puts the conforming 30-year fixed rate mortgage under 4 percent for 7 consecutive weeks.

This week, mortgage rates may rise; the week is anchored by a 2-day Federal Open Market Committee meeting. Whenever the FOMC meets, mortgage rates can be volatile.

The Ben Bernanke-led FOMC is not expected to raise the Fed Funds Rate from its current target range near 0.000 percent, but it's not what the Fed does that can change mortgage rates as much as it is what the Fed says. 

After its 2-day meeting concludes Wednesday, the FOMC will issue its customary statement to the markets, to be followed by a press conference led by Chairman Bernanke. Wall Street will watch the press release and conference for clues about the Fed's next steps and its outlook for the U.S. economy.

If the Fed indicates that the economy is growing, mortgage rates are likely to rise. Conversely, if the Fed indicates that the economy is slowing, mortgage rates are likely to fall.

Other factors influencing mortgage rates this week include the President's annual State of the Union address (Tuesday), the Pending Home Sales Index (Wednesday) and New Homes Sales data for December (Thursday).

Mortgage rates remain low but may not stay that way. If you're looking for the best rates of the year, this week may be your chance.

Homebuilder confidence is soaring.

For the fourth straight month, the National Association of Homebuilders reports an increase in its Housing Market Index. The index climbed 4 points to 25 this month -- its second four-point gain since October.

With home sales activity increasing across all four regions, the monthly HMI has now nearly doubled in value since June 2011.

The HMI is now at a 55-month high. 

The Housing Market Index itself is a composite reading; the result of three home builder surveys sent by the National Association of Homebuilders to its members monthly. Home builders report back on current single-family home sales volume; projected single-family home sales volume for the next 6 months; and current buyer "foot traffic".

The NAHB then results compiles the surveys into a single reading.

In January, home builders reported improving sales conditions across all three categories :

• Current Single-Family Sales : 25 (+3 from December)
• Projected Single-Family Sales : 29 (+3 from December)
• Buyer Foot Traffic : 21 (+3 from December)

The Housing Market Index corroborates recent U.S. government data that suggests housing is mending in Washington. Both Housing Starts and New Home Sales have out-performed expectations of late, it's been shown, and the stock of new homes for sale nationwide is dwindling.

All of this, of course, is happening as demand from buyers heats up.  Foot traffic through builder homes is higher than it's been in more than 3 years, say the builders -- a time period that includes the duration of the 2010 home buyer tax credit.

It's no surprise, therefore, that builders expect a strong 2012.

Jobs data is improving, mortgage rates remain low, and housing momentum is building. For home buyers , however, it may spell higher home prices ahead. Big demand and small supply creates scarcity and scarcity correlates to rising prices.

If you're shopping new homes, the best "deal" may be the one you find today.

Freddie Mac just released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates finishing the year near their all-time historic lows helping to keep homebuyer affordability high. Averaging 3.95%, the 30-year fixed has been at or below 4.00% for the past nine consecutive weeks and only twice in 2011did it average above 5.00%.

30-year fixed Rate:   Last year at this time, the 30-year FRM averaged 4.86%.

 15-year fixed Rates: This week averaged 3.24% with an average 0.8 point. A year ago at this time, the 15-year FRM averaged 4.20 percent.  

Mortgage markets made little change last week for the fifth time in as many weeks.

As Wall Street watched both the Eurozone and the U.S. regain their respective footing, expectations for a new Fed-led stimulus increased, which prevented mortgage rates from rising.

According to Freddie Mac, the average 30-year fixed rate conforming mortgage rose just 2 basis points last week to 4.00% nationwide with an accompanying 0.7 discount points. 

1 discount point is equal to 1 percent of your loan size.

For every $100,000 borrowed at 4.00 percent, therefore, today's Idaho mortgage applicant should expect to pay $700 in "points". Mortgage rates for "zero-point loans" are higher than Freddie Mac's published, average value.

This week, with few economic releases set for release, last week's big stories should carry over into the current one -- the biggest of which was a worldwide, coordinated central bank effort to increase system liquidity.

The European Central Bank, Bank of England and U.S. Federal Reserve were joined by the central banks of Japan, Canada and Switzerland in the effort. Stock markets rallied on the news.

Another of last week's big stories was the sharp drop in the U.S. Unemployment Rate.

After hovering near nine percent since April, the Unemployment Rate broke out of range, dropping to to 8.6% in November. This is the lowest national Unemployment Rate since March 2009, a milestone achieved via the combination of new jobs created (+192,000 in November with revisions) plus a smaller U.S. workforce.

The U.S. economy has added 1.9 million jobs in the last 14 months.

Lastly, last week's New Home Sales and Pending Home Sales Index releases support the growing belief that the U.S. housing market is in recovery. Both reports showed strong growth for October, corroborating what home builders have been saying -- the housing market is improving and buyer ranks are growing.

Home supplies are lower in many U.S. markets.

This week, rate shoppers should be on alert. Market momentum changes quickly, and rates are currently anchored by the expectation of new Federal Reserve stimulus. The Fed meets December 13, 2011. As that date approaches, expectations could change, causing rates to rise.

Mortgage rates remain near all-time lows. It's a good time to lock a rate.