National Mortgage News reported Treasury Secretary Timothy Geithner warned that the Treasury must cease all borrowing Aug. 2 unless legislators raise the ceiling

David Min, associate director of the Center for American Progress, wrote in a CAP publication that an already delicate housing market would be shocked by an FHA shutdown. He also noted 40 percent of the federal budget must be cut if the government reaches the debt limit. Once the government makes essential payments such as issuing Social Security and Medicare checks and payments to the troops, Min said little money will be left. He predicted most administrative activities would shut down.

However, Fannie Mae and Freddie Mac will apparently remain unharmed in the possible shutdown, but the shutdown will affectthe Social Security Administration and the Internal Revenue. In his article, Min went on to state that a debt ceiling impasse could cause a cease in activities for many federal agencies. Furthermore, potential homebuyers could be turned down for mortgages or have significant delays in receiving approvals.

The median square footage of production homes was 2,100 square feet in 2009, according to the survey. The median size of contractor-built homes has also declined. In 2007 and 2008, more than 9 percent of the homes started were 4,000 square feet or larger; but in 2009, that number dropped to 7.3 percent, Custom Home Online reported Nov. 4.

Economic troubles and concerns about high energy costs are the two main reasons for the size decline, according to Custom Home Online.

While some of the features homeowners require – such as number of bedrooms – haven't changed during the recession, luxury amenities are another story, according to the survey. Fewer new single-family homes include three-car garages, fireplaces, patios and decks. Although the number of patios and decks has decreased, the survey showed that the number of homes with porches has increased to 63 percent in 2009 from 54 percent in 2005.

The two-story foyer is a luxury feature that remains consistent in new homes. In 2009, 35 percent of all single-family homes started included two-story foyers. This feature is common in more expensive homes, as shown by the survey: Of the homes started in 2009 that included two-story foyers, 58 percent were priced in the $500,000 to $999,000 range, while nearly 71 percent were in the $1 million or higher range, Custom Home Online reported.

As for framing systems, 95 percent of new single-family homes started in 2009 used wood as the primary framing material, no matter the size, price or construction method, according to the survey. In terms of siding, vinyl was most common in 2009, used by 36 percent of new homes, Custom Home Online reported.

The survey showed that the Market Composite Index, which measures mortgage loan application activity, jumped 15.5 percent on a seasonally adjusted basis from the previous week. On a non-adjusted basis, the index increased 16.1 percent from the previous week. The four-week moving average for the Market Index rose 2.7 percent on a seasonally adjusted basis.

The Refinance Index increased 17.2 percent from the previous week. Refinancing made up 65.5 percent of applications, up from 64.9 percent the previous week, while adjustable-rate loan activity nudged up 0.5 percent to 6 percent. The four-week moving average for the Refinance Index rose 3.6 percent on a seasonally adjusted basis.

The MBA’s March 4 Purchase Index increased 12.5 percent from the previous week on a seasonally adjusted basis. On a non-adjusted basis, the index rose 14.3 percent from the previous week, down 14.3 percent from a year ago. The four-week moving average for the Purchase Index increased 1.2 percent on a seasonally adjusted basis.

The average rate on a 30-year fixed loan increased from the prior week’s 4.84 percent to 4.93 percent, while points, including origination fees, fell from 1.29 to 0.87 for 80 percent loan-to-value ratio loans, according to the MBA. The average rate on a 15-year fixed loan remained steady at 4.17 percent, while points, including origination fees, inched up from 1.07 to 1.15.

While December foreclosures were the lowest since June 2008, filings that were halted in the fourth quarter are likely to proceedin 2011, leading RealtyTrac to predict that 2011 will be the worst year for foreclosure filings since the housing crisis began in 2006.

RealtyTracreported one in 45 houses received foreclosure filings in 2010, up 1.67 percent from the previous year. There were 3,825,637 foreclosure filings, including default notices, scheduled auctions and repossessions on U.S. properties last year. Of those filings, RealtyTrac reported that 257,747 were filed in December. That is a decrease of almost two percent from November and 26 percent from December 2009. RealtyTrac reported that 799,064 homeowners received foreclosure filings in the fourth quarter,

Many major lenders temporarily halted foreclosure proceedings in the fourth quarter “triggered primarily by the continuing controversy surrounding foreclosure documentation and proceedings,” James. J. Saccacio, chief executive officer of RealtyTrac, said in the release.

After allegations that evictions were being handled improperly, banks stepped back on filings to review their processes and temporarily halted taking action against borrowers behind in payments. To date, RealtyTrac reported that about 5 million borrowers are at least two months behind on mortgage payments.

Saccacio estimated as many as a quarter million filings may have been stopped in late 2010, and will likely be re-started in 2011. Altogether, RealtyTrac predicts as many as 1.2 million homes will be repossessed this year.

Factors that will promote the continued rise in foreclosure filings include high unemployment, strict credit standards for those wishing to refinance, and a decrease in home values. Rick Sharga, senior vice president at RealtyTrac, told The Associated Press thathe expects home values to fall another 5percent this year before hitting bottom. That will push borrowers even further underwater on their mortgages. One in five homeowners already owes more on their homes than they are worth.

New surveys of consumer preferences presented on Jan. 13 at the International Builders’ Show in Orlando, Fla., indicate that today’s homebuyers want smaller residences with more open spaces, according to coverage by BuilderOnline.com.

National Association of Home Builders Assistant Vice President for Survey Research Rose Quint reported that home sizes continued trending downward in 2009. The average size of American homes completed in 2009 was 2,377 sq. ft.; whereas, in 2008, the average size was 2,438 and in 2007, it was 2,570. She added, however, that the average size of homes put under construction in 2009 was actually up at 2,400 sq. ft.

American household size is shrinking, too. According to BuilderOnline.com, one- and two-person households now represent more than 63 percent of U.S. households with married couples representing less than 50 percent of the market. But with population growth on a steady rise, Quint said she expects housing demand to remain strong. The U.S. population is projected to grow to 322.4 million by 2015.

Builders are responding to the new market. BuilderOnline.com reported that 52 percent of builders surveyed by NAHB say they will be building smaller homes in 2011, and three-fifths of those builders also expect to be building less expensive residences. Builders say homebuyers want larger family rooms, more combined living spaces, low-E windows and programmable thermostats. They also expect more and more homes to be Energy Star rated.

Despite the emphasis on smaller houses, Jill Waage, editorial director of Better Homes & Gardens’Home Content Core, told attendees that her surveys show 40 percent of current homeowners expect their next home to be larger, BuilderOnline.com reported. Homebuyer priorities include more efficient HVAC systems and appliances, more outdoor living spaces, low-maintenance exteriors, and private backyards.

The homeownership rate fluctuated between 63.5 percent and 65.1 percent from 1985 through 1995. It climbed dramatically during the Clinton and Bush administrations, hitting a peak of 69.2 percent in the fourth quarter 2004 at the height of the housing boom. But since the housing bubble burst, the rate has been declining gradually.

For the third quarter 2010, the homeownership rates were highest in the Midwest (71.1 percent) and lowest in the West (61.3 percent). The homeownership rates in the South and West were lower than a year ago, while rates in the Northeast and Midwest were not statistically different from their corresponding third quarter 2009 rates.

The number of vacant homes – defined as houses and apartments – has skyrocketed over the past four years from about 16 million at the start of 2006 to around 19 million by the fourth quarter 2008, where it has lingered since, according to The Associated Press’ analysis. There are around 131 million housing units nationwide, according to the Census Bureau.