More and more people are interested in investing in real estate properties. In what could be seen as a sign of renewed faith on the housing industry, a recent survey suggested that interest in real estate as an investment has more than tripled in the past 12 months. The Move Homeownership survey indicated that 17.2% of potential home buyers today plan to purchase a house in the near future purely as an investment. The figure is more than triple the 5.6% rate recorded in March last year.

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Investing in real estate in California, Nevada, Florida, and Arizona might not be a good idea for the next ten years, if a new report is to be believed. According to financial services provider Fiserv, housing markets that registered the highest inflation in home values, such as the four aforementioned states, will not see a return of peak-level property prices before 2025.

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It seems that there’s no end to the lingering foreclosure crisis anytime soon. If any, distressed sales will continue to make up a huge chunk of home sales in the coming months, if not years. A recent report released by real estate data firm First American CoreLogic revealed that distressed sales, including short sales and sales of bank owned homes, made up 29% of total home sales in January.

The report suggests that the foreclosure crisis continues to rear its ugly head, even though there are occasional drops in foreclosure filings due to government programs aimed at addressing the crisis. However, economists and critics of government efforts argue that the programs are only delaying the inevitable. They also claim that these programs are keeping home prices depressed, and thus further deepening the crisis.

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The Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association, popularly known as Freddie Mac and Fannie Mae, respectively, will be restructured into government-chartered, non-shareholder owned authorities if the National Association of Realtors (NAR) will have its way. Speaking before Congress’ House Financial Services Committee, NAR vice-president Vince Malta said that restructuring the two government-sponsored enterprises is essential to ensuring the availability of capital in the mortgage market.

“We want to ensure a flow of capital into the mortgage market regardless of the state of the market or economy,” he said. “The new Fannie and Freddie must ensure there is always mortgage capital available for creditworthy buyers and that taxpayer dollars are protected.” However, Malta stressed that the federal government should not move in too quickly in restructuring Freddie Mac and Fannie Mae, saying that the housing recovery is still “too fragile” and any sudden changes in the marketplace would be “harmful.”

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You can now say goodbye to record-low mortgage rates.

As of Wednesday, the Mortgage Bankers Association placed the national average for a 30-year fixed-rate mortgage, the most widely used loan, at 5.31%, up from 5.04% just a week earlier. The figure is way above the 4.78% rate in the same period last year, as well as the record low of 4.71% in December last year.

The rise in mortgage rates means that houses are now less affordable to potential home buyers. According to the National Association of Realtors, between 300,000 and 400,000 prospective home buyers are forced to abandon their plans to buy new homes in a given year for every one percentage point increase in mortgage rates. The usual rule of thumb states that a buyer’s purchasing power is reduced by around 10% for every one percentage point rise in mortgage rates.

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The real estate industry has received another shot in the arm after the National Association of Realtors (NAR) announced that pending sales of previously owned homes surged in February. The NAR said that its Pending Home Sales Index, an index that shows deals that have been signed but not yet completed, jumped by 8.2% in February to 97.6 from a downwardly revised 90.2 in January.

The increase, the highest surge since 2001, far exceeded the forecasts of economists, who estimated the forward-looking index to remain essentially unchanged. NAR chief economist Lawrence Yun said the surge indicates a possible increase in home sales in spring. “The rise in buyer contact activity may signal the early stages of a second surge of home sales this spring,” he said.

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Landlords apparently breathed a little easier in the first three months of the year. A report by real estate research firm Reis showed that rent prices rose 0.1% to $1,027 per month in January through March after dropping by a record 2.3% last year. The modest quarterly growth ended five straight quarters of record declines.

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Home buyers are racing against time to avail of the government’s tax credit program. Buyers have until the end of this month to sign a purchase contract and close the transaction before July 1, 2010 to avail of up to $8,000 in tax credit. Industry analysts expect a mad rush this month as home buyers try to beat the deadline for the federal program that is widely credited for helping the housing market recover from its worst slump in decades.

Lawrence Yun, the National Association of Realtor’s chief economist, said the stimulus program has increased the number of potential home buyers to 900,000. “It is laying the foundation for more normal housing market conditions … and helping assure that we have a sustainable economic recovery as homeowners don’t see further destruction of their wealth,” he said, adding that the extended program has helped stabilize house prices.

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It might be a good time for real estate investors to master the art of closing short sales. Housing market analysts expect the number of short sales to increase in the coming years after the federal government launched a new effort to expedite the short sale process.

The Home Affordable Foreclosure Alternatives Program (HAFA), which was launched on Monday, provides banks and borrowers incentives to agree on a short sale if a loan modification is no longer an option. Under the new program, the Obama administration will provide $3,000 in moving expenses to homeowners and $1,500 for administrative and processing costs to lenders if a short sale is completed instead of a property owner going into foreclosure.

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