Home staging is key to attracting home shoppers, and maybe even more so in an era where consumers are used to watching TV home-makeover shows, according to the newly released 2019 Profile of Home Staging report from the National Association of REALTORS®.
Eighty-three percent of buyers’ agents say that staging a home makes it easier for buyers to visualize a property as their future home. More than half of sellers’ agents say that staging a home decreases the amount of time it spends on the market.
Staging may also offer a higher sales price too, according to the report, which is based on a survey of about 2,000 real estate pros. Forty-four percent of buyers’ agents say that staging a home increases its value. Twenty-five percent say staging can increase the home’s value by 1 to 5 percent, and 12 percent say it increases the value by 6 to 10 percent. Twenty-nine percent of buyers’ agent say that staging had no impact on the value of the home.
Television shows about home buying may increasingly be influencing buyers’ expectations when it comes to the appearance of a home for sale. A median of twenty percent of buyers were disappointed by how homes they visit look compared with homes they see in television shows, according to the survey. Ten percent of real estate professionals surveyed said that their buyers felt homes should look the way they do on TV.
“Buying a house is more than a financial decision; it is an emotional decision as well,” says NAR President John Smaby. “Buyers aren’t just making an investment in a property, they are purchasing a place to call home; to raise their children; to begin a new chapter; or to retire to a new season of life. While every REALTOR® doesn’t use staging in every situation, the potential value it brings is clear to both home buyers and sellers.”
The real estate pros surveyed reported that the living room is the most important room in a home to stage (47 percent), followed by the master bedroom (42 percent), and then the kitchen (35 percent). Home sellers, however, agree those rooms are the most important to stage but in reverse order—citing kitchen, master bedroom, and living room for staging priorities.
Twenty-eight percent of sellers’ agents surveyed say they stage all of their clients’ homes prior to listing them. Thirteen percent of agents say they only stage homes that are difficult to sell, 7 percent stage only the homes in the higher price brackets, while 45 percent of sellers’ agents say they do not stage homes prior to listing them, according to the survey.
For those who do stage, who pays for it? The sellers’ agent most often does, according to the survey. Twenty-six percent of sellers’ agents say they pay the costs to stage a home; 18 percent of sellers will pay for staging themselves. Seventeen percent of agents say they offer home staging services themselves.
Home shoppers are finding some of the lowest mortgage rates in more than a year.
“Mortgage rates declined decisively this week amid various market reports, a strong bond auction, and further uncertainty around the Brexit deal, which all contributed to driving bond yields lower,” says Sam Khater, Freddie Mac’s chief economist. “At 4.31 percent, the average 30-year fixed mortgage rate is at its lowest since February of last year. While these low rates will certainly get the attention of prospective home buyers, the supply of homes for sale remains stubbornly low.”
Freddie Mac reports the following national averages with mortgage rates for the week ending March 14:
30-year fixed-rate mortgages: averaged 4.31 percent, with an average 0.4 point, falling from last week’s 4.41 percent average. Last year at this time, 30-year rates averaged 4.44 percent.
15-year fixed-rate mortgages: averaged 3.76 percent, with an average 0.4 point, dropping from last week’s 3.83 percent average. A year ago, 15-year rates averaged 3.90 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.84 percent, with an average 0.3 point, falling from last week’s 3.87 percent average. A year ago, 5-year ARMs averaged 3.67 percent.
Painting a room can be one of the most budget-friendly ways to makeover a space. But some commonly held myths about choosing the right paint may prevent some homeowners from finding the truly perfect hue to enhance their space.
Realtor.com® recently spoke with painting experts to address some of these common myths about painting a home. Some of those include:
Dark paint colors make a room look small.
In fact, it’s just the opposite in many cases, says Ashley Blackmore, a real estate professional with Berkshire Hathaway HomeServices Western Colorado Properties. “If you use a dark color for an accent wall, it can truly make the home look much larger by adding variation to the eye,” Blackmore told realtor.com®.
Primers aren’t necessary.
Many homeowners believe they can skip the primer step, but it’s a crucial one to ensure the paint goes on correctly, experts say. “In order for your project to look like it was done professionally, you absolutely need to use primer,” Kayla Martin, owner of Acme Home Interiors, told realtor.com®. “It helps make the paint job look smooth and allows the paint to adhere to the wall.”
You always need two coats of paint.
Don’t assume you need two coats of paint. Many times you may not. “If you apply primer and are using a quality brand of paint, you can absolutely get away with one coat of paint,” Martin says. However, it depends: Blackmore says in some cases she has seen rooms need six coats of paint, particularly where the walls weren’t properly prepped for painting or where there was a previously darker color painted.
Trim must always be white.
White trim is the most common color, but it doesn’t always have to be, Morgan McBride of Charleston Crafted told realtor.com®. She says that extending your wall color to the trim for both the top and bottom can make walls appear taller. It can also emphasize the details in the room’s moldings, she says.
Just how critical are pollinators to the success of a garden? Very, since butterflies, birds, bees, and bats all help maintain habitats. But pollinators are in danger, and that poses a major risk for everybody. One out of every three bites of food we consume is attributed to the help of pollinators. Honeybees usually get the greatest attention; their population has been on the decline since the late 1990s and one-third of our food supply depends on their pollination.
But there’s good news to cheer—and it might be something your clients want to be a part of. The National Pollinator Garden Network, headquartered in Washington, D.C., released a report February 26, that says its four-year “Million Pollinator Garden Challenge” has registered more than 1 million gardens that have increased habitats, which, in turn, have helped pollinators thrive. Urban and suburban individual residences compose 85 percent of the registered gardens. The group’s goal now is to convince more homeowners, community organizations, and cities to choose pollinator plants, herbs, vegetables, fruits, and flowers—and when possible, those that bloom in multiple seasons.
Here are tips you can pass on to your garden-loving homeowner clients who want to do more.
Vote with your wallet. Some garden centers and big-box stores with plants for sale are reducing and even phasing out production of flowering plants treated with neonicotinoids, or insecticides resembling nicotine. Research has confirmed that they harm pollinators. Go to the stores that don’t stock them. If you don’t know, ask what they carry and, if they carry plants with neonicotinoids, suggest they might switch.
Help spread the ripple effect. Planting flowers, herbs, and fruits not only helps pollinators but also leads to a better food supply. Increase awareness among those around you—encourage your local community leaders and city councils to adopt pro-pollinator pledges and policies. For example, all 50 governors have already made pollinator proclamations, 39 states have 109 policies in place to help pollinators, and 20,000 schoolyards have new or enhanced pollinator gardens.
Wildlife benefits, too. A report from the National Wildlife Federation states that one-third of the country’s wildlife is at risk of extinction. They, like people, rely on pollinators as a major source of their food supply.
Plant a pollinator or, better yet, two or three. The NPGC is asking gardeners to plant at least three new plants—one each for spring, summer, and fall to provide three seasons of pollen and nectar to nourish pollinators. Three top favorites are milkweed, coneflowers, and coreopsis, but choose plants that thrive in your region.
Get your community on board. The top five metro areas active in the pollinator network are New York City, Washington, D.C., Chicago, Miami-Ft. Lauderdale, Fla., and Philadelphia-Camden, N.J. Put yours on the map. To track the outcome of this movement, the NPGN encourages everyone to participate in projects that help pollinators; visit scistarter.org/pollinatorgardens to learn more.
Home interiors are softening up with lighter neutrals and more casually designed modern spaces, according to PulteGroup’s in-house team of interior designers that furnish model homes nationwide.
“Much like a change to spring weather, warm natural elements are brightening up homes this season, in combination with a clean, modern approach that does not sacrifice comfort,” says Angela Nuessle, national director of interior design for PulteGroup. “Color is also playing a big role in design as we see a shift from cool-toned gray palettes to light, brown-based tones. Layering these warm neutrals and combining them with vibrant accents will be key to making homes fresh and stylish for spring.”
PulteGroup highlights several interior fads:
Spring home design trends
Light wood tones: “Lighter wood grains can be dressed up for a classic upscale feel or down for a more comfortable and casual look. Incorporating these elements through cabinetry, flooring, and furniture selections is easy and trend forward,” PulteGroup notes.
Natural materials:Raw materials are gaining popularity, inspired by soft, organic shapes that are shown in furnishings, home accents, and artwork. This trend strays from the hard, geometric designs that have dominated over the last few years. For example, natural stone featured in coffee tables, sculptures, and lighting are adding a unique visual interest to furniture pieces or home accents. Also, faux animal hide rugs and textiles are adding subdued texture and visual interest to spaces.
Casually modern aesthetic:Design is straying from being too “matchy-matchy,” and instead has a more eclectic vibe that infuses multiple design styles. “Interiors are streamlined and uncluttered, but do not sacrifice comfort and livability,” PulteGroup notes.
Color trends
Layered neutrals with some colorful accents are among the top home design trends for the season, PulteGroup notes. The PulteGroup designers offer their take on the trending colors for 2019:
Taupe: Transitioning from the popularity of gray palettes, home designs are now warming up their interiors with more brown-based tones.
Warm whites: Soft whites are brightening up space while also adding “a touch of warmth and yield a multidimensional ability,” PulteGroup designers say.
Variations of green: Green is popping up in more interiors in a multitude of shades. “Green serves as a warm grounding neutral, with added complexity, that makes for a versatile and serene look,” the designers note.
Blue: Blue has proven itself as a popular accent color over the last few years, but now it’s being added more as a neutral color within design. Blue can blend in with other colors and is popping up on everything from home accessories to kitchen cabinetry.
Onyx elements: More home interiors are welcoming bolder, darker colors. “Onyx can be styled as bold or casual to bring high contrast and an elevated elegance to any space in the home,” PulteGroup designers note. “The color remains a timeless and beautiful go-to that will make a big wave in design this season.”
Home equity continued to increase in the fourth quarter of 2018, with more homeowners profiting over rising home prices. U.S. homeowners with a mortgage saw their equity rise by 8.1 percent year over year in the fourth quarter of 2018, according to CoreLogic’s Home Equity Report, released Thursday.
The average homeowner has gained $9,700 in home equity between the fourth quarter of 2017 and the fourth quarter of 2018, the report showed. Western states saw some of the most significant annual gains. Nevada homeowners, for example, saw an increase of $29,400 in home equity over the past year, and Hawaii homeowners saw gains of about $26,900.
“As home prices rise, significantly more people are choosing to remodel, repair or upgrade their existing homes,” said Frank Martell, president and CEO of CoreLogic. “The increase in home equity over the past several years provides homeowners with the means to finance home remodels and repairs. With rates still ultra-low by historical standards, home-equity loans provide a low-cost method to finance home-improvement spending. These expenditures are expected to rise 5 percent in 2019.”
The number of homes with a mortgage in negative equity—where the homeowner’s loan balance is higher than the home’s current worth—was at 2.2 million, or 4.2 percent of all mortgaged properties in the fourth quarter.
However, with predictions of a 4.5 percent increase in home prices over the next year, about 350,000 homeowners could be lifted from being underwater and restored to positive equity, says Frank Nothaft, CoreLogic’s chief economist.
Despite recent declines in home sales, sluggish growth in single-family home construction, and mounting affordability concerns, first-time buyers are outperforming other segments of the market, according to a new report released by Genworth Mortgage Insurance. “The first-time home buyer market has been more resilient during the [housing] slowdown compared to repeat buyers,” writes Tian Liu, chief economist at Genworth Mortgage Insurance.
About 482,000 first-time buyers purchased homes in the fourth quarter of 2018. Though that’s 3 percent lower than a year ago, it bests the 7 percent year-over-year decline in repeat buyer activity, according to the report. “This is a reminder that first-time home buyers differ from other buyer groups in terms of why they buy,” Liu notes. “Their purchase decisions are more likely driven by the fact that many are starting families and reaching peak homebuying ages. Even when they face common challenges such as falling affordability, first-time home buyers and repeat buyers may respond differently, as demonstrated by first-time home buyers’ outperformance.”
First-time buyers accounted for 56 percent of mortgage borrowers in the fourth quarter of 2018 and 39 percent of buyers in the overall home sale market, according to the report. They made 2.07 million home purchases in 2018—higher than their pre-recession level.
Home buyers are still increasingly concerned about affordability and rising home prices. However, sales of lower-priced homes reportedly grew nationwide in the fourth quarter as buyers looked for more affordable options, the report notes. “Looking at the full year and the longer term for the first-time home buyer market provides more reason for optimism,” Liu notes. “There remains a large number of ‘missing’ first-time home buyers who have not returned to the market in the aftermath of the housing crisis, and many young people are reaching their peak homebuying ages now, leaving them poised to buy over the coming years.”
After weeks of declines, mortgage rates reversed course, but are still lower than a year ago.
“While mortgage rates very modestly rose to 4.41 percent this week, they remain below year-ago levels for the fourth week in a row,” says Sam Khater, Freddie Mac’s chief economist. “In late 2018, mortgage rates rose over a full percentage point from the prior year, which was one of the main reasons that weakness in home sales continued into early 2019. However, the impact of recent lower rates and a strong labor market has led to a rise in purchase mortgage demand as we start the spring home-buying season.”
Freddie Mac reports the following national averages with mortgage rates for the week ending March 7:
30-year fixed-rate mortgages: averaged 4.41 percent,with an average 0.5 point, rising from last week’s 4.35 percent average. Last year at this time, 30-year rates averaged 4.46 percent.
15-year fixed-rate mortgages: averaged 3.83 percent, with an average 0.4 point, rising from last week’s 3.77 percent average. A year ago, 15-year rates averaged 3.94 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.87 percent, with an average 0.3 point, rising from last week’s 3.84 percent average. A year ago, 5-year ARMs averaged 3.63 percent.
You may be wondering if there are tax deductions when selling a home. And the answer is: You bet!
But there’s also a new tax code—aka the Tax Cuts and Jobs Act—causing quite a bit of confusion this filing season. Rest assured that if you sold your home last year (or are planning to in the future), the tax deductions may amount to sizable savings when you file with the IRS.
You’ll want to know all the tax deductions (as well as tax exemptions or other write-offs) at your disposal. So here’s a rundown.
1. Selling costs
Good news! These deductions are still allowed under the new tax law as long as they are directly tied to the sale of the home and a married couple—or a single taxpayer—lived in the home for at least two out of the five years preceding the sale. Another caveat: The home must be a principal residence and not an investment property.
“You can deduct any costs associated with selling the home—including legal fees, escrow fees, advertising costs, and real estate agent commissions,” says Joshua Zimmelman, president of Westwood Tax and Consulting in Rockville Center, NY.
Just remember that you can’t deduct these costs in the same way as, say, mortgage interest. Instead, you subtract them from the sales price of your home, which in turn positively affects your capital gains tax.
2. Home improvements and repairs
Score again. The new tax law left this deduction as well. If you renovated a few rooms to make your home more marketable (and so you can fetch a higher sales price), now you can deduct those upgrade costs as well. This includes painting the house or repairing the roof or water heater.
But there’s a catch, and it all boils down to timing.
“If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing,” says Zimmelman.
3. Property taxes
This deduction is still allowed, but your total deductions are capped at $10,000, Zimmelman says.
If you were dutifully paying your property taxes up to the point when you sold your home, you can deduct the amount you paid in property taxes this year up to $10,000.
4. Mortgage interest
As with property taxes, you can deduct the interest on your mortgage for the portion of the year you owned your home. However, the rules have changed slightly from last year.
Just remember that under the new tax code, new homeowners (and home sellers) can deduct the interest on up to only $750,000 of mortgage debt, though homeowners who got their mortgage before Dec. 15, 2017, can continue deducting up to the original amount up to $1 million, according to Zimmelman.
Note that the mortgage interest and property taxes are itemized deductions. This means that for it to work in your favor, all of your itemized deductions need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly doubled to $12,200 for individuals, $18,350 for heads of household, and $24,400 for married couples filing jointly (for comparison, it used to be $12,700 for married couples filing jointly).
5. But what’s up with capital gains tax for sellers?
Lawmakers tried to change the capital gains rule, but it managed to survive—so it’s still one home sellers can use. It isn’t technically a deduction (it’s an exclusion), but you’re still going to like it.
As a reminder, capital gains are your profits from selling your home—whatever cash is left after paying off your expenses, plus any outstanding mortgage debt. And yes, these profits are taxed as income. But here’s the good news: You can exclude up to $250,000 of the capital gains from the sale if you’re single, and $500,000 if married. The only big catch is you must have lived in your home at least two of the past five years.
However, look for the rules of this exemption to possibly change in a future tax bill.
Ralph DiBugnara, president of Home Qualified and vice president at Residential Home Funding, says lawmakers might push to change this so that homeowners would have to live in the property for five of the past eight years, instead of two out of five.
More Americans are becoming homeowners. The national homeownership rate increased slightly to the highest level since 2014 in the fourth quarter of 2018, reaching 64.8 percent, the U.S. Census Bureau reported this week. The homeownership rate has been gradually increasing since reaching an all-time low of 62.9 percent in the second quarter of 2016.
Researchers at data analysis firm CoreLogic attribute the housing market’s “healthy path of recovery” to three main factors: An uptick in homeownership that has been persistent “despite the existence of low housing affordability and inventory;” household formation that has been on the strongest streak in more than a decade; and an increase in the rate at which young households—who represent the largest pool of potential buyers—are entering homeownership.
The homeownership rate of young adults ages 34 to 44 rose 1.2 points year over year to reach 61.1 percent in the fourth quarter, the largest gain of any age group.
“American households, especially young households, are becoming confident enough in their financial and familial circumstances to take the plunge into homeownership, despite rocky outcrops of affordability and sparse inventory,” says Ralph McLaughlin, deputy chief economist at CoreLogic. “This is good news for proponents of homeownership in the United States since young households represent the largest pool of potential homebuyers since their parents, the baby boomers, came of homebuying age over three decades ago. The future of homeownership in this country indeed looks bright.”
Young adults are increasing their stake in the housing market, but it’s not happening everywhere. Millennials are buying homes at the highest rates in more affordable areas, and they’re buying homes at the lowest rates in the priciest pockets, such as coastal California and Florida. Millennials comprise the largest share of purchase mortgage applicants in Pittsburgh (57 percent); Provo, Utah (56 percent); and Rochester, N.Y. (55 percent). However, they make up the lowest share of mortgage applicants in Sarasota, Fla. (24 percent); Cape Coral, Fla. (30 percent); and Ventura, Calif. (32 percent), according to CoreLogic research.
Overall, the Census Bureau data shows that in the fourth quarter of last year, owner-occupied households rose by more than a million, to 1.7 million new owner households. Also, the number of new renter households is decreasing, which suggests that some households are switching from renting to owning, according to CoreLogic.
