So are things getting better or worse? We ask because the latest data on existing-home sales fail to provide a definitive answer. Sale were up once again, increasing 4.3 percent to a 4.57 million annualized rate in January, which, in turn, dropped supply to 6.1 months, the lowest inventory level in three years.The fact that existing-home sales are rising is good news. The not-so-good news is that sales appear to be driven by discounting. The national median price fell 4.6 percent to $154,700, while the national average price dropped 4.0 percent to $201,200.

In short, existing-home sales are trending higher, but the trend is being fueled in part by price discounting – at least at the national level.We're always quick to point out that all real estate is local. National numbers – averages in particular – strip local data of their individuality and meaning. That's why we are always more interested in locally produced data, which nearly always differs from what the national numbers say.

For example, data from Pro Teck Valuation Services and Collateral Analytics show significant improvement in South Florida, which a few years ago was one of the leading bubble markets. On the flip side, their data show significant weakness in a few Connecticut burgs, which mostly endured the post-2007 sell-off unscathed.

The bottom line is markets aren't homogenous: The country has experienced varying degrees of price corrections and sales volumes since the market peaks of 2006 and 2007. These degrees are often smoothed away in aggregated national numbers, thus limiting their usefulness.

The mortgage market, on the other hand, has seen few degrees of variability of late. Mortgage rates have held a bottom achieved a couple months ago. The consensus among mortgage pundits is that this bottom will hold for 2012.

It's difficult to argue with the consensus when you consider the Federal Reserve has openly stated it intends to hold the fed funds rate – the influential short-term rate – at zero through 2014. On the long-end of the interest-rate spectrum, the Fed has stated it will continue to purchase longer-term Treasury securities and mortgage-backed assets to keep mortgage rates low.

This doesn't mean that mortgage rates can't get more expensive, though. The FHA recently announced it was raising premium fees on its forward mortgages by 10 basis points on conforming loans and 25 basis points on jumbo loans. These costs must be recouped from the borrower.

It's also worth keeping in mind that the Federal Reserve isn't omniscient. Market forces – such an unexpected spike in inflation or economic growth – will move rates higher, regardless of what the Fed does. So take the consensus for what it is – an opinion and not a guarantee.

Courtesy of Jessica Regan.

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