Real Estate and Market Trends

With a surge in home sales in 2020, a record number of Americans packed up and moved last year, according to a new survey from Zillow.

The online real estate marketplace normally just focuses on the buying and selling of houses. But the company, inspired by the migration triggered by remote work during the pandemic, has published its first-ever Mover Report, a “data-based dive into the people and emotions driving moves this spring home shopping season.”

The first thing that popped out of the survey was this startling fact: In 2020, 11 percent of Americans moved and either bought a home or rented one. Among those recent movers, 75 percent said they didn’t have to move -- they wanted to.

Many moved to be closer to family or friends or to live somewhere they've always dreamed of. They could do it because of the new flexibility provided by remote work during the pandemic.

Moving companies likely to stay busy

With the housing market showing no signs of slowing down, moving companies are likely to stay busy for the remainder of 2021. Zillow’s researchers identified “a significant number” of homeowners who said they're more likely to move and sell their homes as a result of the pandemic. That could result in another 2.5 million real estate transactions, the company said.

A new study by Stoneside reached similar conclusions. It found that 34 percent of Americans are considering a move this year. Only 54 percent of Americans have ruled it out. 

Phoenix, Charlotte, and Austin were the top three destinations for people on the move last year. Zillow said those Sun Belt metros are expected to continue to surge in 2021. Data from North American Van Lines confirmed earlier research showing that large cities lost population during the pandemic. New York, Los Angeles, San Francisco, and Chicago were among the metros seeing the most people packing up and leaving.

"The pandemic brought an acceleration of trends we were seeing in 2018 and 2019," said Zillow’s senior economist Jeff Tucker. "More affordable, medium-sized metro areas across the Sun Belt saw significantly more people coming than going, especially from more expensive, larger cities farther north and on the coasts. The pandemic has catalyzed purchases by millennial first-time buyers, many of whom can now work from anywhere." 

What happens if remote work ends?

But what happens if these remote workers who have moved to another state are called back to the office when the pandemic ends? Another survey shows that not that many plan to return, possibly creating turbulence in the labor market.

A poll conducted for personnel staffing firm Robert Half found that a full one-third of remote workers said they would quit their jobs if forced to return to an office setting. 

"After a year of drastic change, many business leaders are eager to restore a sense of normalcy and welcome staff back to the office," said Paul McDonald, senior executive director at Robert Half. "But reopening doors will bring new obstacles for companies to navigate. Not all employees will be ready — or willing — to return to the workplace, so staying flexible and responsive to their needs will be critical."

If you’re planning a move this year, ConsumerAffairs has collected thousands of verified reviews of the top moving companies here.

The Trump administration is extending the moratorium on rental evictions that expired in late July. In an unusual twist, it's using the authority of the U.S. Centers for Disease Control and Prevention (CDC) to do it.

Under direction from the White House, the CDC has issued an order suspending the eviction of renters who have been financially impacted by the coronavirus (COVID-19) pandemic and don't have other good housing options. 

Like the moratorium on foreclosures on homes with federally-backed mortgages announced last week by the Federal Housing Finance Agency (FHFA), the eviction moratorium is extended through the end of this year.

The CDC action was taken under Section 361 of the Public Health Service Act, which gives the agency the authority to take action to protect public health. In this case, the agency cited the spread of COVID-19 as a serious public health issue and said forcing millions of people from their homes would increase the spread of the virus.

Threat to public health

Declaring that “COVID-19 presents a historic threat to public health,” the CDC said keeping people safe in their homes will reduce the spread of the virus.

“In the context of a pandemic, eviction moratoria -- like quarantine, isolation, and social distancing -- can be an effective public health measure utilized to prevent the spread of communicable disease,” the CDC said in its order.

“Eviction moratoria facilitate self-isolation by people who become ill or who are at risk for severe illness from COVID-19 due to an underlying medical condition. They also allow state and local authorities to more easily implement stay-at-home and social distancing directives to mitigate the community spread of COVID-19.”

The agency also said housing stability helps protect public health, pointing out that homelessness increases the likelihood of individuals moving into congregate settings, such as homeless shelters, which then puts individuals at higher risk to COVID-19.

Limits action by landlords

Under the order, a landlord, owner of a residential property, or “other person with a legal right to pursue eviction or possessory action,” shall not evict any covered person from any residential property in any jurisdiction to which the order applies. The order does not offer a way for landlords to eventually get paid their back rent.

The action means that whether you own a home or rent, you have protection from foreclosure or eviction through December 31, 2020. 

Protections for both groups were provided under the CARES Act, and proposed extensions were contained in renewed stimulus legislation that is currently the object of a stalemate between Republicans and Democrats.

Millennials have helped fuel the rebound in the housing market by purchasing their first homes. But a recent survey by Clever, a real estate website, finds many of these millennials wish they had kept on renting.

The survey found that the overwhelming majority of homeowners in the survey still feel good about buying a home. But when it comes to millennial homebuyers, nearly half admitted to having a case of buyer’s remorse.

Millennials appear to be feeling a lot of stress about being responsible for a home. When compared to their parents’ generation, millennials are twice as likely to stress out over homeownership.

The survey found the source of that stress is mostly financial. Two-thirds of millennial buyers put less than 20 percent of the purchase price down, resulting in large mortgage payments. In addition to paying more in interest, buyers putting down less than 20 percent also have to pay mortgage insurance.

Costly renovations

Millennials are also planning to make a lot more improvements to their homes than baby boomers. That may be due to a recent trend of first-time buyers purchasing a fixer-upper to save money.

While most boomer buyers appear satisfied with their homes the way they are, millennials are planning 49 percent more renovations. They’re also three times as likely to finance the work with a personal loan and twice as likely to use a credit card -- both very expensive types of loans.

Finally, many first-time buyers may be discouraged by the chores that homeownership brings Forty-three percent admitted to being surprised by the cost of maintaining their homes.

For sale

Perhaps because of all these things, more homeowners have decided to sell. A Harris Poll conducted for NerdWallet found just over 12.1 million homeowners — 16 percent of U.S. homeowners — plan to put their home on the market within the next 18 months.

The reasons are varied, but some sellers point to a changing market. About 44 percent of those planning to sell point to recent shifts in the housing market that are prompting them to sell  sooner than initially planned.

“Homeowners can see that we’re moving away from a strong seller’s market in many areas. So their feelings and motivations are shifting, too,” said Holden Lewis, NerdWallet’s home expert.  “Also, selling your home is an emotional decision as well as one of dollars and cents, so it’s unsurprising that people have a variety of motivations and sentiments.”

Selling a home and moving back into a rental is not always a recipe for saving money. The median rent is now over $1,500 a month and has become increasingly unaffordable for most recent college graduates.

Findings from the largest indoor allergen study to date showed that over 90 percent of homes had three or more allergens, and 73 percent of homes had at least one allergen at elevated levels.

After looking at levels of eight common allergens in homes, researchers from the National Institutes of Health found that several factors -- including the presence of pests and pets in the home and the type of housing -- had a major influence on allergen levels.

Specifically, the researchers say certain types of homes -- including mobile homes, older homes, rental homes, and homes in rural areas -- were more likely to have elevated levels of multiple allergens. Homes in rural settings were also more likely to have higher levels of cat and dust mite allergens compared to urban settings.

Health impact

Indoor allergens can trigger asthma and cause a number of other adverse effects on health, including itchy, watery eyes, runny nose, sneezing, coughing, and wheezing. In order to reduce your risk of experiencing these symptoms, it’s important to know which allergens you are most affected by.

In an interview with ConsumerAffairs, Dr. Susan LeLacheur, a primary care clinician and infectious disease expert, explained that allergens come from a variety of sources depending on the individual's specific allergy.

“Common respiratory allergies in homes are from animals, both the welcome kind (pet dander from dogs and cats) to the unwelcome (cockroaches are highly allergenic),” she said. “Allergies are basically an excessive or abnormal immune response to an external thing.”

Reducing allergens in your home

Fortunately, there are several things consumers can do to reduce their exposure to indoor allergens and irritants.

To minimize common household respiratory allergens, LaLacheur recommends keeping things as clean as possible. Vacuum carpets and upholstered furniture and wash sheets and blankets in hot water every week to kill allergy-triggering dust mites and their eggs.

For some allergy sufferers, it may be best to avoid having pets altogether -- but for others, pet ownership may still be in the cards. LeLacheur recommends consulting an allergist for help determining if you have a specific pet allergy. If you are only allergic to cats, for example, you may be able to share your home with a dog.

Pet owners should keep pets off of furniture and bed linens. Letting pets curl up in your bed isn’t a good idea, experts say; pet dander that settles on bed linens becomes a food source for dust mites. Special allergen-impermeable mattress and pillow covers can be purchased to help keep your bedroom free of dust mites and other allergens.

To keep bugs at bay, seal any possible entry points and remove their food and water sources. Never eat on the floor or on furniture since crumbs can attract cockroaches.

To make your home less hospitable to mites and mold, use a dehumidifier in bedrooms and other areas to keep humidity at 50 percent or less. For more tips on boosting your indoor air quality, click here.

Millennials are dominating the housing market for the fourth consecutive year, according to research from the National Association of Realtors (NAR). However, 49 percent of Millennials don’t have the necessary funds set aside to cover a $500 emergency expense.

An unforeseen expense can be a crushing blow to a budget. That’s why homeowners — especially first-time Millennial buyers — should take steps to protect themselves from the unexpected.

Unanticipated expenses are almost guaranteed to occur. As David Bach writes in his bestseller "The Automatic Millionaire" -- "No matter how well you plan or how positively you think, there are always things out of your control that can go wrong."

Protecting your home and budget

A FedEx truck might accidentally back into your house, leading to a $900 gutter repair bill. The air conditioner or washing machine could break. You may discover that your neighborhood is prone to power outages, so you’ll need to invest in a pricey backup generator.

Unexpected costs like these can wreak havoc on a budget, but preparing for them can go a long way toward protecting yourself. Here are a few steps first-time buyers should take in order to help keep their budget intact.

• Determine how your house fits into your budget. When figuring out how much of your income you can comfortably afford to put toward mortgage payments, think about what might happen in the future. What if you become a parent, buy a car, or lose your job? To ensure you're not “house poor” if any of these things happen, the U.S. Census Bureau recommends that borrowers spend no more than 30 percent of their income on housing.

• Shop around for homeowners insurance. Your lender will require you to buy homeowners insurance, which can help protect your home and possessions in the event of accidents, disasters, fires, theft, and more. However, be sure to look closely at what is and isn’t covered in the policies. Going with a less-expensive policy means fewer protections and more out-of-pocket expenses if you file a claim.

• Consider getting a home warranty. Not to be confused with homeowners insurance, a home warranty covers repairs and replacements on systems and appliances due to normal wear and tear. It is an optional purchase, but you can rest assured that your budget won’t be destroyed if your heating and cooling system, electrical system, plumbing system, or one of your appliances breaks down. The older your home, the greater the odds are that something will break -- and the more helpful a home warranty might be.

• Decide if you need flood insurance. If your new home is in a flood-prone area, you may want to buy separate flood insurance. Flood damage isn’t covered by homeowners insurance.

• Get help if needed. If you're having trouble combing through the fine print, consider letting an experienced agent help guide you through the process of figuring out which policy will provide the best protection for your household.

From decluttering your home to having it professionally staged, there are a number of ways to potentially decrease the amount of time it spends on the market -- and not all of them need to cost an arm and a leg.

Kitchen remodels are one such improvement that should be kept simple and cost-effective. Sellers should aim to enhance the visual appeal of their kitchen without going overboard, real estate experts say.

According to Cedric Stewart, team leader of Entourage RG in the Washington D.C. area, sellers shouldn't spend more than 10 percent of their home's value on a kitchen remodel.

Avoid overdoing it

“Making improvements to increase the home’s value is a delicate process,” Stewart told Quicken Loans’ ZING blog.

“Fully renovated kitchens with high-end appliances and finishes usually get folks excited and a nod of approval from appraisers, but one must be careful not to ‘overdevelop’ the home," he said, adding that "clean, modern, functional kitchens sell faster in today’s market.” 

To help your home sell faster, real estate experts like Stewart recommend focusing on projects that will enhance the visual appeal of your kitchen. These can help make a good first impression on potential buyers, making them more likely to make an offer.

Ways to boost visual appeal

In its blog, Quicken Loans names several kitchen upgrades that can enhance the look of your kitchen without driving up costs.

• Backsplashes. Installing a bright, clean backsplash won’t cost you a fortune, but it will make your kitchen look more luxurious.
• Appliances. New appliances appeal to buyers who are on the hunt for a move-in ready home. For sellers who are considering upgrading their appliances, New York-based realtor Don Stevens has a piece of advice: skip black and white options and go for stainless steel instead. Stevens says he’s confident these appliances help sell a home faster.
• Cabinets. Because most buyers aren’t interested in having to upgrade cabinets as soon as they move into a home, new cabinets can be a big selling point. Although this upgrade typically doesn’t allow sellers to recoup their investment, new cabinets can do wonders for the look and feel of a kitchen.
• Little details. “Thoughtful ideas can pique a buyer’s interest,” said Stewart, who recommends adding small-yet-appreciated features like built-in wine racks, lazy Susans, soft-close drawers, pot fillers, pot racks, USB outlets, and built-in speakers.

When evaluating whether it makes sense to buy a house or rent your home, you need to look at all the expenses that go into both choices.

When renting, the monthly rent check you write each month is pretty much the extent of your cost. It's different when you own a home.

Real estate marketplace Zillow has broken down the costs and estimates homeowners spend an average of $9,080 a year in extra expenses that go into owning and maintaining a home. However, a large portion of that goes into taxes and insurance, which are usually paid as part of the monthly mortgage payment.

The analysis shows homeowners pay $6,059 a year to cover taxes, insurance, and utilities. Most renters, however, also pay utilities separate from the monthly rent.

That leaves us with the money homeowners spend each year to maintain and improve their homes. The most common expenses, according to Zillow, are carpet cleaning, yard work, gutter cleaning, HVAC maintenance, house cleaning and pressure washing.

Regional labor costs

How much all of that costs will depend on labor costs where you live. Zillow found Seattle homeowners might have to pay as much as $4,052 a year on average to complete those six projects, but homeowners in San Antonio pay just $1,962 on average.

"Determining how much a home will ultimately cost you each year and what you can afford is one of the most challenging aspects of home buying, especially for first-time buyers," says Svenja Gudell, Zillow's chief economist.

That's why the extra costs need to be factored into any homebuying decision. It's one thing to have enough cash to make the down payment, it's another to keep up and maintain the property.

And unless you are a skilled do-it-yourselfer, many home improvements are best left to professionals. Unless they are done properly, and to local building codes, they may not add the value to your home that you think they will.

For that reason, purchasing a newly-built home may turn out to be more economical, since fewer improvements or repairs should be required in the first few years of ownership.

Buying a home can be a good investment. It can be a rewarding experience for you and your family.

But the fact is, it isn't right in every situation and it only works if the buyer is financially prepared. As we saw during the housing crisis, buying a house when you aren't ready can lead to disastrous results.

How can you tell if you're ready? The experts at real estate marketplace Trulia suggest asking yourself some questions.

The first has to do with income. Does your household earn enough money to make the monthly payment on a home, pay for insurance, pay the taxes, and cover maintenance and repairs?

When you rent your home, all of those costs are baked into the monthly rent. If the water heater goes bad, that's the landlord's problem, not yours.

It's true that, with low interest rates, a mortgage might be the same, or even less than rent in some markets. But you can't overlook the other costs of owning a home.

Debt-to-income ratio

What about your debt? If you have outstanding student loans and rising credit card balances, you might not be ready to take on a mortgage. In fact, that could be one thing that might disqualify you.

Lenders look at a borrower's debt-to-income ratio. If the ratio is too high, it reduces the amount you can borrow. In most cases, a lender will want your debt to be no more than 36% of gross income.

When looking at your savings, don't just think about how much you need for a down payment. If the down payment takes all your ready cash, you'll have nothing left to cover those expenses that almost always crop up in the first year of home ownership.

Two important factors

Before considering a home purchase, you also need to make sure you will qualify for a mortgage. Two factors could keep that from happening.

First, you need to have been on the job, or employed in the same industry, for at least two years. Lenders want to see that employment consistency before they'll consider funding your home purchase.

Second, you need a reasonably good credit score. While it is true you might qualify for a subprime mortgage with a marginal credit score, there could be some real disadvantages to being lumped into the subprime sector.

Having a better credit score -- 720 or better -- will get you a better interest rate, in most cases. So it might be wise to spend some time trying to raise your credit score before considering a home purchase, and the easiest way to get started on that is to simply pay all of your bills on time.

Finally, give some thought to the future. If you purchase a home, you'll need to live in it for a while before you can sell it without losing money. The experts at Trulia suggest three to five years is the minimum length of time you'll need to live in it before selling.

If you think there's a good chance you'll be relocating in a couple of years, the prudent thing to do is keep renting.

With shortages of homes for sale, sellers are finding it is a little easier to sell their homes. That is, if they happen to live in one of the hot housing markets where homes sell in days rather than weeks.

If you happen to live in a market where there's a bit more competition, you might have to work a little harder, not only to generate traffic but also get a signed contract sooner.

Trulia, the online real estate marketplace, recently offered several tips to sellers who want to sell their homes faster. Most are simple steps that involve little, if any expense.

First on the list is to rent a nearby storage unit. Nearly every home is full of stuff that accumulates into clutter. Getting rid of the clutter, along with family photographs and other highly personal effects, will make your home show better.

Rather than getting rid of stuff, just get it out of sight. A storage unit accomplishes that nicely and allows you to stage your home.

Get help staging your home

Here, you might spend a few dollars for some help. There are people who stage homes for a living. Ask them to view your property and suggest ways to put it in the best possible light.

Once it's perfectly arranged, have it photographed. Often the person who stages the home will also provide a photography service as well. Nice photographs of a staged home will increase traffic. A professional photographer can make a small condo like the one pictured here look open and spacious. 

Next, find the right real estate agent. First, they need to know your area, including your neighborhood.

Next, they need to be sellers, not just listers. Find an agent who spends his or her weekends showing homes in your area, and has a track record of closing the deal.

Once you've listed your home, don't just leave it up to your agent. There are plenty of ways you can market your home as well. Use social media to let your friends and contacts know you have a great house for sale.

Small upgrades

Consider small upgrades but don't go overboard, because you aren't likely to get back the cost in your sale price. Instead, consider any upgrade expense a marketing cost, much like hiring someone to stage your home. In fact, the stager might also have suggestions where money would be well spent.

When the house is being shown, there needs to be as much light as possible, both from natural sources and from light fixtures. Make sure all the bulbs in all fixtures are working and are of the highest possible wattage. Remove heavy curtains from windows so the light shines in and gives the place a light, airy feel.

There may be plenty of things inside your home that need attention, but don't neglect the outside. Curb appeal is, and always has been, a very important factor. Shrubs should be trimmed and the lawn raked to remove any leaves or other debris.

Consider hiring a lawn service to reseed and fertilize the lawn to fill in any bare spots to give it a full, lush appearance.

Finally, Trulia recommends putting your house on the market at just the right time. Spring and summer are usually best. It may not only sell faster, it might sell for closer to your asking price.

You've put your home on the market and weeks have gone by without an offer. Plenty of people have looked at your property but have walked away. What could be the problem?

Real estate marketplace Trulia outlines a number of common turn-offs that cause prospective buyers to pass on your home, even if it has an attractive price. It starts with the roof.

Home buyers increasingly want homes that are “move-in ready,” meaning they don't even want to do cosmetic touch-ups. They especially don't want to immediately have to sink money into making improvements.

An asphalt shingle roof will last about 25 years. If your roof is getting close to that age, many buyers will be leery, since replacing a roof is very expensive. If the roof is already leaking, that's even more troubling.

Turning a negative to a positive

Replacing the roof yourself before you sell will be costly to you, and you probably won't get anywhere close to all your money back. But if you need to sell your home in a hurry, a new roof will turn a big negative into a big positive, perhaps resulting in a much faster sale.

If your gutters are old, clogged with debris, and in disrepair, this will also turn off potential buyers. It suggests your home hasn't been well maintained and may prompt a much closer look at the siding and foundation for signs of water damage.

New gutters, meanwhile, send just the opposite message. They also improve your home's curb appeal.

Your home's heating and air conditioning system could also be a red flag for buyers, if it is approaching the end of its life cycle. A new heat pump, on the other hand, is another strong selling point, because it tells buyers they don't have to worry about replacing the system for many years.

Outdated appliances

Outdated appliances in the kitchen can also send prospective buyers running. Yes, buyers can purchase new appliances to their liking, but that usually isn't enough to overcome the bad impression an avocado green refrigerator or harvest gold stove makes when your house is shown.

Unfortunately, none of these issues are inexpensive to address, which is one reason they are such a turn-off for buyers. If you make these improvements, expect to write a big check.

There are other options, including lowering the price of the house to compensate for the needed improvements. But that's often not that attractive to a buyer, who may be using all of his or her cash to cover the down payment and closing costs.

Discuss your options with your real estate broker. If you need your home to sell quickly in a competitive market, it may be necessary to spend some money first.

Scanning the real estate horizon for a larger home? The extra square footage might cost more than you think.

According to a recent study by Zillow, families moving from a two-bedroom to a three-bedroom home in the same zip code can expect to spend an additional $447 per month ($5,364 per year) on their mortgage.

Leaving a one-bedroom home for a two-bedroom home will cost buyers an extra $192 per month, while upgrading from three to four bedrooms will cost $612 more per month. And move-up buyers may face even higher costs in pricey housing markets, such as those along the California coastline.

Cost varies by location

Trading up to a larger home comes with the highest price tag in San Jose, California. The study found that moving from a two-bedroom home to a three-bedroom home in this city costs families an additional $2,224 per month.

Upgrading from two bedrooms to three in San Francisco could potentially cost buyers an extra $1,600 per month. In Los Angeles, the same upgrade typically costs buyers an extra $1,033 in housing costs.

“Those in hot, coastal markets could expect to spend upwards of $500 more per month,” the report stated. “In the notoriously expensive California markets of Los Angeles, San Francisco, and San Jose, high and rapidly growing home values likely weighed heavily on the cost of moving up.”

The cost of moving up isn’t usually as steep for buyers in the Midwest, South, and Southwest. In Chicago, Cincinnati, and St. Louis, families can expect to spend just $150 more on their monthly mortgage when upgrading from a two to a three-bedroom home.

Cost of an extra bathroom

Buyers on a quest for an additional bedroom might also desire another bathroom. However, a home's bathroom count can also impact its price.

In its Cost of Moving Up Analysis, the real estate listings website noted that upgrading to a house with the same number of bedrooms, but with one extra bathroom, can cost buyers between $386 and $838 more per month.

"While deciding whether to move is a personal choice, understanding how certain characteristics like size, location, or number of beds and baths, can impact a home's price can be hugely important when determining if a particular home is the right fit for you and your family," said Svenja Gudell, Zillow chief economist.

When tax refunds and warmer temperatures converge, the possibilities are endless. With a little extra money, consumers can tackle a range of home improvement projects.

In its blog, real estate marketplace Trulia notes that many home projects can be accomplished for under $1,000. From sprucing up your home’s exterior to updating key elements of the home’s interior, here are a few projects that don’t come with an especially high price tag.

Revamp your ceiling

Consumers can use their tax refund check to improve their home’s existing ceilings. If your popcorn ceilings are an eyesore, consider hiring a professional to scrape them smooth.

To further enhance the look of your room, look for DIY projects like installing crown molding or box beams or adding a coat of fresh paint.

Boost curb appeal

Beyond looking lovely, homes with curb appeal may be worth more. Adding a new front door adds nearly 97% of the amount you spent to the value of your home, according to Remodeling magazine.

Adding a new mailbox, some flower boxes, new house numbers, outdoor lighting, and shrubs can also boost your home’s appeal, says Trulia. For another simple, cost effective improvement, repaint the trim around windows and other features.

Rejuvenate your baseboards

“The top of the baseboard where the molding meets the wall gets really dirty over time,”  Sarah Roussos-Karakaian, co-owner of Nestrs, a construction, design, and organizing company, told Trulia.

But caulking and giving your baseboards a fresh coat of paint can bring your walls back to life, she says. Do-it-yourselfers are likely to spend less on this project, since contractors and painters usually charge between $2.50 to $6 per linear foot depending on the size of the baseboards.

Upgrade your water heater

While it may not add instant aesthetic appeal like some of the aforementioned projects, using your tax refund to upgrade from a standard water heater to a tankless model (which heats the water only as needed) will save energy and money.

Add a new rug

Area rugs add comfort while bringing all the elements of a room together. Best of all, purchasing a new one won't take a huge bite out of your tax refund.

However, it's important to choose a rug that's the right size. Rugs that are too small may cost slightly less, but they won't do any favors for your space. 

To keep your room from looking out of scale, be sure to choose an appropriately sized rug. In smaller rooms, the outer edges of the rug should be around 6 inches from each wall. In larger rooms, the outer edges can be up to 18 inches from the walls. 

Consumer advocates and the real estate industry are struggling to understand President Trump's first official action. Trump, who has vowed to fight for working-class Americans, signed an order during his first hour in office blocking an Obama initiative that would have cut the cost of mortgages for millions of home buyers.

Democrats and consumer advocates denounced the move. "In one of his first acts as president, President Trump made it harder for Americans to afford a mortgage," Senate Minority Leader Charles Schumer (D-N.Y.) said in a statement. "What a terrible thing to do to homeowners."

The Obama measure would have reduced the premium on Federal Housing Administration-backed loans by 0.25 percent. That would have saved someone buying a $200,000 home about $29 a month.

The FHA insures about 16 percent of new mortgages in the U.S. under a long-standing program to make home ownership more affordable for middle-class consumers.

First-time homebuyers who might have trouble qualifying for a private mortgage can often get an FHA-insured loan because taxpayers are guaranteeing the loan. This adds a monthly insurance premium to the loan payment but often enables the homebuyer to qualify for a mortgage they might not be able to get otherwise.

GOP blames Obama

There wasn't much in the way of an explanation for Trump's action, although Republicans had called the 0.25 percent reduction "hasty" and said that while it might help consumers, it threatened the stability of the FHA.

At his confirmation hearing as Secretary of Housing and Urban Development, Ben Carson said he was "surprised to see something of this nature (the premium reduction) done on the way out the door, which of course has a profound effect."

Carson said he would work with financial experts to "really examine that policy."

Consumer groups were taken by surprise.

"I think we were surprised by how quickly this was something that they wanted to look at," said Sarah Wolff of the Center for Responsible Lending, according to a USA Today report. "I think it unfortunately signals that they don’t place as great an emphasis as we would hope on access and affordability of mortgage credit.

Sen. Pat Toomey (R-Pa.) had pressed Carson about the solvency of the FHA fund that backs mortgages at his confirmation hearing, saying it was only 16% above the minimum required by law, which he characterized as "very little buffer" while noting that FHA had needed a bail-out as recently as 2013, during the Great Recession.

Toomey has long been concerned with the FHA's financial health. He introduced legislation in 2012 that would have increased FHA premiums. The measure passed the House but died in the Senate.

The FHA insures more than $1.1 trillion worth of mortgages on more than 7 million loans.

Before buying your home, you might have asked your real estate agent a few questions about the history of the house. But while you may have been told the age of the property or clued in on other structural details, you probably weren’t told if a person ever died in your future home-sweet-home.

DiedInHouse lets home buyers and renters know if a particular home was ever the setting of a suicide, a murder, or the scene of another gruesome crime. It does so using data from over 130 million police records, news reports, and old death certificates.

'Carfax' for home history

“I went online to find a ‘Carfax’ of sorts for deaths in homes and I didn’t find anything, but I did find pages and pages of people asking if there’s a way to find out if their house is haunted,” Condrey told Forbes.

“The realtor is trying to sell, so they won’t disclose if they don’t have to,” he said. But those who are curious can find out for themselves on DiedInHouse.com.

The national average value of homes in the U.S. is likely to drop further before rebounding, according to a report by the financial service, Moodys Economy. The report predicts the housing market will not begin to recover until 2010. Another report finds a record number of homes in foreclosure and delinquencies continuing to rise.

At its most dire, the report, co-authored by Mark Zandi, chief economist, and Celia Chen, director of housing economics, suggests housing markets will crash in some of the hardest-hit markets. For example, the authors say prices in Punta Gorda, Florida and Stockton, California could plunge 30 percent from their peaks.

Nationwide, the price of the average home is forecast to fall 13 percent from their 2005 peaks through early 2009. The report says further incentives may be required to sell some property, pushing the average decline to as low as 15 percent.

The report also goes into detail about the reasons for the housing market woes, and not all are tied to the subprime mortgage fiasco, which is only now beginning to be addressed by the U.S. government.

The report says the sudden withdrawal of investors in some areas and over-building by some home builders have also contributed to the glut of homes on the market, which in turn has led to slower sales and more foreclosures, creating a vicious cycle.

Effect on the economy

It remains to be seen how the declining housing market impacts the overall economy.

At the height of the real estate boom, housing was a huge contributor to the economy, accounting for nearly a full point of Gross Domestic Product. The authors predict the current recession in the housing market will remove more than a full point from this years GDP and perhaps a point and a half in 2008.

Moodys areas of greatest predicted price declines closely match regions of the country where foreclosure rates have so far been the greatest. The most significant loss of home value is predicted for California, Florida, Arizona, and Nevada states where speculators were particularly active.

While falling home prices may be painful for homeowners, many economists say the price declines may be the only real cure for the housing market. Even the Moodys report sees the large and increasing inventory of unsold homes as the root cause of the problem. Once prices dip enough to attract new homebuyers, the market will rebound.

New York Attorney General Andrew M. Cuomo today announced that he is suing one of the nations largest real estate appraisal management companies and its parent corporation for colluding with the largest savings and loan in the country to inflate the appraisal values of homes.

In a scheme detailed in numerous e-mails, eAppraiseIT (EA), a subsidiary of First American Corporation, caved to pressure from Washington Mutual (WaMu) to use a list of preferred Proven Appraisers who provided inflated appraisals on homes.

The e-mails also show that executives at EA knew their behavior was illegal, but intentionally broke the law to secure future business with WaMu, Cuomo's suit charges.

The independence of the appraiser is essential to maintaining the integrity of the mortgage industry. First American and eAppraiseIT violated that independence when Washington Mutual strong-armed them into a system designed to rip off homeowners and investors alike, said Attorney General Cuomo.

The blatant actions of First American and eAppraiseIT have contributed to the growing foreclosure crisis and turmoil in the housing market," Cuomo said. "By allowing Washington Mutual to hand-pick appraisers who inflated values, First American helped set the current mortgage crisis in motion.

As First American acknowledged in its 2006 annual report, appraisal fraud can damage the entire housing market, including consumers and investors alike.

Consumers are harmed because they are misled as to the value of their homes, increasing the risk of foreclosure and hindering their ability to make sound economic decisions. Investors are hurt by such fraud because it skews the value and risk of loans that are sold in financial markets.

Pressure applied

In April 2006, EA began providing appraisal services for WaMu, which became EAs biggest client. Within weeks, WaMu began complaining to EA that its appraisals were not high enough. WaMu pressured EA to employ exclusively a new panel of appraisers that WaMu hand-selected as Proven Appraisers.

This set of appraisers was chosen by WaMu specifically because they inflated property appraisals, the suit alleges. WaMu profited from these higher appraisals because they could close more home loans, at greater values. Over the course of their relationship, between April 2006 and October 2007, EA provided approximately 262,000 appraisals for WaMu.

Attorney General Cuomos investigation uncovered a series of e-mails between executives at EA, First American, and WaMu that he said show EA officials were willingly violating state and federal appraisal independence regulations to comply with WaMus demands:

• On February 22, 2007, in response to a description of the WaMu Proven Appraiser program as one in which we will now assign all Wamus work to Wamus Proven Appraisers [and] Performance ratings to retain position as a Wamu Proven Appraiser will be based on how many come in on value, eAppraiseITs president told senior executives at First American: we have agreed to roll over and just do it...

• On April 4, 2007, eAppraiseITs executive vice president stated in an e-mail to First American: we as an AMC [Appraisal Management Company] need to retain our independence from the lender or it will look like collusion eAppraiseIT is clearly being directed who to select. The reasoning is bogus for many reasons including the most obvious the proven appraisers bring in the values.

• On April 17, 2007, eAppraiseITs president wrote an e-mail to First American explaining why its conduct was illegal: We view this as a violation of the OCC, OTS, FDIC and USPAP influencing regulation.

• E-mail evidence also shows that WaMu pressured EA to inflate appraisals as a condition for doing future business together:

• On September 27, 2006, First Americans vice chairman reported that a WaMu executive told him: if the appraisal issues are resolved and things are working well he would welcome conversations about expanding our relationship

Attorney General Cuomos lawsuit seeks to end the illegal relationship between First American and EA and WaMu. It also seeks penalties and disgorgement from First American and EA.

The lawsuit alleges that First American and EA violated appraiser independence laws, which regulate the conduct of real estate appraisers. The lawsuit was filed in the Supreme Court of New York, New York County.

One major consequence of the sub-prime mortgage implosion is the difficulty many consumers with limited or impaired credit will have in obtaining mortgages.

But if suddenly tougher lending standards result in slamming doors at banks and mortgage companies, the venerable Federal Housing Administration loan might look much more inviting.

The long-established FHA loan has always been designed to help the first-time buyer purchase a home of their own. However, it fell out of favor in recent years as its natural constituency was attracted to the exotic mortgages offered by sub-prime lenders.

As a result, many consumers ended up with loans -- and houses -- they really couldnt afford.

At the urging of some in Congress, the U.S. Department of Housing and Urban Development is looking at modernizing the FHA loan to give consumers, who in the past would have obtained sub-prime mortgages, a better alternative.

Assistant Secretary for Housing Brian Montgomery urged a Senate Appropriations Subcommittee last week to pass legislation that enhances the FHA's government-insured mortgage products and "provides lower-income families safe, secure homeownership opportunities."

"Many first-time and minority homebuyers face significant challenges when trying to purchase a home. In recent years, such difficulties have resulted in many of these individuals assuming risky, adjustable-rate, sub-prime loans. The impact on African American and Latino borrowers has been particularly profound," Montgomery said.

According to 2004 HMDA (Home Mortgage Disclosure Act) Data, 40 percent of African-Americans and 23 percent of Hispanics pay an interest rate three percent higher than the market rate. The Center for Responsible Lending reports that 51 percent of refinancing transitions in African American neighborhoods are sub-prime loans.

"There needs to be a mortgage alternative which will qualify a wide swath of borrowers and simultaneously provide them with the loan options they require. Everyone should have access to a safe, affordable mortgage product; and this should not change just because that person is a first-time homebuyer, a minority homebuyer, or a homebuyer with troubled credit history," Montgomery added.

FHA was created in 1934 to stimulate the housing market during the Depression. Over its long history it has financed more than 34 million homes. But as lending practices have evolved and modernized, critics have charged the FHA has been slow to adapt, and reforms are necessary to adapt the program to today's marketplace.

Specifically, critics would like to see changes that reflect the recent escalation of home values, allowing home-buyers to make smaller down payments and take out larger loans, as long as they can qualify. Currently there are limits on the sizes of FHA mortgages.

Rep. Barney Frank (D-MA) would like to see additional changes. He introduced legislation in 2006 to allow FHA greater leeway in financing manufactured homes, which are more affordable than conventionally build houses.

These proposed changes, however, buck a significant trend. Banking regulators are busy tightening rules on sub-prime lending, virtually doing away with nothing-down, interest only loans that were in vogue as little as a year ago. Currently, FHA rules require the homeowner to put at least three percent down, and loans are limited to roughly $363,000.

But unlike sub-prime loans, FHA mortgages are not traded on Wall Street and subject to market panic attacks.

Instead, they are backed by U.S. Government bonds. But because they are administered by a government agency, they can be slow, cumbersome and bureaucratic. As a result, FHA loans fell out of favor with many realtors, who heavily influence where their clients turn for financing.

While not falling into the same sinkhole as the sub-prime lending industry, FHA is trying to become more flexible and consumer friendly. Its proposed modernization plan would create a new, risk-based insurance premium structure that would match the premium amount with the credit profile of the borrower. It would replace the current structure, in which there is standard premium amount for all borrowers.

As a result of excesses within the sub-prime mortgage industry, it will likely be harder for consumers of modest means to purchase a home. But the FHA says, with some retooling, it could provide a safe alternative for many of these would-be homebuyers.

Whether there is a housing "bubble" is becoming as popular a topic of conversation as how much the house down the block sold for. But beneath all the froth is an ominous undertow -- high foreclosure rates in some of the country's hottest markets.

The number of new properties in foreclosure increased nationwide for the second month in a row, with 64,057 in April compared to 62,422 in March, although the rate eased off somewhat in May, possibly indicating the March increase was a temporary spike.

According to data released today by online foreclosure listing service, Foreclosure.com, 22,734 new foreclosed residential properties were listed for sale in the U.S. during May 2005. The number represents a decrease of 17 percent from April 2005. The total number of U.S. residential foreclosure properties available for sale in the U.S. during the month of May was 74,011, a decrease of nearly 4 percent from March.

In Florida, which had the highest rate of foreclosure in the previous two months -- there was one property in foreclosure for every 719 households. Texas is close behind. Both states' foreclosure rates were more than 2.5 times the national average.

"April continues a trend we've seen over the last few months where Texas and Florida have consistently produced an above average number of properties in some stage of foreclosure," said James J. Saccacio, chief executive officer of RealtyTrac.com.

The rising foreclosure rate in Texas, Florida and other prime real estate country may be the early warning signs of an implosion, or they may be just a blip. But whatever the big picture turns out to be, any foreclosure is an unmitigated tragedy for the family that loses its home.

In Texas, homeowners are fighting back. Class action lawsuits against Ameriquest, Option One, Washington Mutual and Long Beach Mortgage allege that their adjustable rate home equity loans written between 1998 and 2003 violate a critical provision of the Texas Constitution.

The Texan homeowners aren't the only ones who are irate about their variable-rate mortgages. Economists are worried too.

Not long ago, the typical homebuyer took out a fixed-rate, 30-year mortgage. Everyone knew upfront what the payments would be and lenders conducted reasonable due diligence to ensure the borrower would be able to pay.

Such staid financing instruments have come to seem as old-fashioned as an oboe. Today as many as two-thirds of home buyers are taking out variable rate mortgages, gambling that interest rates won't rise faster than their ability to pay.

Lenders, meanwhile, are rushing to write paper for nearly anyone who has a pen with which to sign on the dotted line. "No document mortgages" -- which are based largely on the value of the property rather than the borrower's credit worthiness -- have been at record levels. Even headier are the interest-only mortgages that are allowing eager buyers to snap up property they could otherwise not afford.

Of course, interest-only means you never pay off your house. In fact, you don't even make a dent in the original debt and therefore don't build any equity except for that which results from prices that rise faster than the interest rate. While that may be happening now, there's no guarantee it will continue.

"Foreclosure inventory in 2005 has reflected the current volatility and geographic variations of the overall housing market. The tendency for homeowners to enter into adjustable-rate mortgages, no-down payment loans and other low initial cost loan options has resulted in an atmosphere where slight changes in interest rates or economic conditions have a dramatic effect on ownership," said Brad Geisen, president and CEO, Foreclosure.com.

"In areas of the country where the housing market is strong, homeowners facing foreclosure are still able to sell their home to pay their mortgage. But, in areas of the country where the market is flat or slipping, homeowners are left with very few options and foreclosure inventory remains high," he said.

The national median existing-home price for all housing types is expected to rise 8.8 percent in 2005 to $201,500, while the typical new-home price should increase 5.7 percent to $233,600. A rising tide of this sort might continue to lift all boats, but national averages can be misleading and a house that might increase 100 percent in value in a decade in San Francisco might very well show no increase or even a loss in Detroit, St. Louis or other markets that have lost a lot of high-paying jobs.

Home Equity Loans

As troubling as the new styles of financing is the willingness of homeowners who have built up equity in their homes to borrow against that equity, putting their home at risk to pay off credit cards, put their kids through college or go on an extended vacation. Economy.com estimates that Americans borrowed some $705 billion against their homes last year, up from $266 billion in 1999.

Many consumers who've borrowed against their homes were enticed by low interest rates and tax provisions that, in some cases, allowed them to deduct the cost of the loan from their income tax.

What consumers sometimes didn't consider carefully was what would happen if they were unable to pay the loan back. If a consumer falls behind on a car loan, the car may be repossessed. A bad credit card debt can bring annoying collection efforts and damage to one's credit rating. But fall behind on your home equity loan and you can lose your house.

As the foreclosure rate demonstrates, this is not a theoretical problem. But it's not fair to put all the blame on consumers -- lenders have been very aggressive in making loans without pointing out the risk and, often, without adequately vetting the borrower's ability to make the payments.

"No one is doing serious due diligence and underwriting," Diane Thompson, a housing and consumer unit attorney with Land of Lincoln Legal Assistance Foundation Inc. in East St. Louis, told the Belleville News-Democrat recently. "There is not documentation to support income or assets. Clients are never offered a choice."

Thompson said this has forced the foreclosure rate in St. Clair County to more than double in the past decade. Most of the loans that have gone bad are what the industry calls "subprime."

Subprime Loans

Subprime loans are those issued at a higher than standard interest rate to those whose credit rating prohibits them from otherwise securing a home loan. With interest rates ranging between 5 percent and 6 percent in recent years, subprime rates can reach as high as 12 percent.

Thompson said she has seen cases where subprime rates topped 20 percent. She blames Wall Street for the problem.

Clients are being pushed into these loans because of the demand for income from Wall Street, she said. Brokerage houses are making a lot of capital available for high-interest loans and are using "push marketing" tactics.

"It's extremely profitable," Thompson said. "Most of my clients were not actively shopping for homes for refinancing. They don't shop around. They don't know of those that are around, and they get steered to disadvantaged loans."

Hot Spots

On the other hand, there are parts of the country -- like Los Angeles -- where foreclosures are not much of a problem. During April, Los Angeles County had the lowest foreclosure rate of the nation's top five metropolitan areas, according to RealtyTrac.com.

Credit the price of housing, which continues to climb, though not at the super-heated pace of a year ago. Houses are so expensive that: a.) low- and middle-income homeowners are rare; and b.) anyone who gets into financial trouble often can quickly sell their home, probably at a profit.