But despite financial woes, a decline in home prices (down 4.6% in May 2011 year over year, according to NATIONAL ASSOCIATION OF REALTORS®' stats), and a ludicrous legislative attack, a new poll suggests that the dream of owning a home is still alive and well in the United States. According to research (http://www.cbsnews.com/8301-503544_162-20075544-503544.html?tag=cbsnewsLeadStoriesArea) conducted by CBS News and The New York Times, a whopping nine out of 10 Americans say home ownership is still an important goal. More than half of those surveyed described it as "very important." Did you hear that, Congress?

 With so much enthusiasm for home ownership, it's tough to understand how some lawmakers are blatantly disregarding their constituents and proposing legislation that would further cripple the market. According to the CBS/NYT poll, almost half of Americans believe the government should be doing more to improve the housing market. But the hard reality is that some in Washington are putting the American dream out of reach.

Federal regulators, for instance, in an attempt to tighten lending standards, have put forth a proposal that would punish home buyers who put down less than a 20% downpayment by hiking their interest rates almost two percentage points. The proposal would create a high downpayment hurdle for first-time and low-income home buyers and make refinancing much more expensive for credit-worthy home owners.

If you agree that 20% down is just too high for hard-working, creditworthy Americans, send a message to the U.S. Department of Housing and Urban Development, which is accepting comments until Aug. 1.

Another important revelation from the poll is that nine in 10 of those surveyed say it's important to maintain the mortgage interest deduction; six in 10 call the MID "very important." Yet the President and some members of Congress have suggested repealing the longtime tax credit (http://www.houselogic.com/blog/taxes/home-owners-have-good-reason-hide-uncle-sam-wants-more/), which would mean an annual hit of more than $3,000 to the average itemizing home owner. So why is the government ignoring the voices of those they were elected to represent?

 America has spoken: The government needs to take note, advance home ownership, and abandon proposals that would hinder the housing market. If our representatives won't listen, the 2012 elections are a great opportunity to find some who will.

By: Matt Dornic

 What do you think of the various federal efforts to tighten downpayment rules and reduce home owner tax breaks?

Today's home improvement trends show that we like our houses to work harder and smarter for the money we spend maintaining and improving their value.

          •We no longer want bigger; instead, we want space that's flexible, efficient, and brings order to chaos.

          •We're watching our wattage with monitors and meters, and guarding our weekends with maintenance-free exteriors.

Here's a look at 7 hot home improvement trends that improve the way we live with our homes.

Trend #1: Maintenance-free siding

We continue to choose maintenance-free siding (http://www.houselogic.com/articles/siding-guide-options/) that lives as long as we do, but with a lot less upkeep. But more and more we're opting for fiber-cement siding, one of the fastest-growing segments of the siding market. It's a combination of cement, sand, and cellulosic fibers that looks like wood but won't rot, combust, or succumb to termites and other wood-boring insects.

At $5 to $9 per sq. ft., installed, fiber-cement siding is more expensive than paint-grade wood, vinyl, and aluminum siding. It returns 80% of investment, the highest return of any upscale project on Remodeling magazine's latest Cost vs. Value Report (http://www.remodeling.hw.net/2010/costvsvalue/national.aspx).

Maintenance is limited to a cleaning and some caulking each spring. Repaint every 7 to 15 years. Wood requires repainting every 4 to 7 years.

Trend #2: Convertible spaces

Forget "museum rooms" we use twice a year (dining rooms and living rooms) and embrace convertible spaces that change with our whims.

Foldaway walls turn a private study into an easy-flow party space. Walls can consist of fancy, glass panels (http://www.nanawall.com/Support/Brochure.aspx) ($600 to $1,600 per linear ft., depending on the system); or they can be simple vinyl-covered accordions ($1,230 for 7 ft. by 10 ft.). PortablePartions.com sells walls on wheels ($775 for approximately 7 ft. by 7 ft.).

A Murphy bed pulls down from an armoire-looking wall unit and turns any room into a guest room. Prices, including installation and cabinetry, range from $2,000 (twin with main cabinet) to more than $5,000 (California king with main and side units). Just search online for sellers.

And don't forget area rugs that easily define, and redefine, open spaces.

Trend #3: A laundry room of your own

Humankind advanced when the laundry room arose from the basement to a louvered closet on the second floor where clothes live. Now, we're taking another step forward by granting washday a room of its own.

If you're thinking of remodeling, turn a mudroom or extra bedroom into a dedicated laundry room (http://www.houselogic.com/articles/laundry-room-storage-5-naked-truths/) big enough to house the washer and dryer, hang hand-washables, and store bulk boxes of detergent.

Look for spaces that already have plumbing hookups or are adjacent to rooms with running water to save on plumbing costs.

Trend #4: Souped-up kitchens

Although houses are trending smaller, kitchens are getting bigger, according to the American Institute of Architects' Home Design Trends Survey (http://www.aia.org/practicing/AIAB088157).

Kitchen remodels (http://www.houselogic.com/articles/7-smart-strategies-for-kitchen-remodeling/) open the space, perhaps incorporating lonely dining rooms, and feature recycling centers, large pantries, and recharging stations.

Oversized and high-priced commercial appliances-did we ever fire up six burners at once?-are yielding to family-sized, mid-range models that recover at least one cabinet for storage (http://www.houselogic.com/articles/low-cost-kitchen-storage-cheap-stress-reduction/).

Since the entire family now helps prepare dinner (in your dreams), double prep sinks have evolved into dual-prep islands with lots of counter space and pull-out drawers (http://www.houselogic.com/articles/pull-out-shelves-gliding-hardworking-kitchen/).

Trend #5: Energy diets

We're wrestling with an energy disorder: We're binging on electronics-cell phones, iPads, Blackberries, laptops--then crash dieting by installing LED fixtures and turning the thermostat to 68 degrees.

Are we ahead of the energy game? Only the energy monitors (http://www.houselogic.com/articles/energy-monitors-seeing-believing-and-saving/) and meters know for sure.

These new tracking devices can gauge electricity usage of individual electronics ($20 to $30) or monitor whole house energy (http://planetgreen.discovery.com/tech-transport/pick-home-energy-monitor.html) ($100 to $250). The TED 5000 Energy Monitor ($240) supplies real-time feedback that you can view remotely and graph by the second, minute, hour, day, and month.

Trend #6: Love that storage

As we bow to the new god of declutter, storage has become the holy grail.

We're not talking about more baskets we can trip over in the night; we're imagining and discovering built-in storage in unlikely spaces (http://www.houselogic.com/slideshows/7-storage-solutions-you-didnt-know-you-had/) --under stairs, over doors, beneath floors.

Under-appreciated nooks that once displayed antique desks are growing into built-ins for books and collections. Slap on some doors, and you can hide office supplies and buckets of Legos.

Giant master suites, with floor space to land a 747, are being divided to conquer clutter with more walk-in closets.

Trend #7: Home offices come out of the closet

Flexible work schedules, mobile communications, and entrepreneurial zeal are relocating us from the office downtown to home.

Laptops and wireless connections let us telecommute from anywhere in the house, but we still want a dedicated space (preferably with a door) for files, supplies, and printers.

Spare bedrooms are becoming home offices and family room niches are morphing into working nooks. After a weekend of de-cluttering, basements (http://www.houselogic.com/articles/evaluate-your-house-basement-finishing/) and attics (http://www.houselogic.com/articles/attic-bedroom-top-features/) are reborn as work centers.

Lisa Kaplan Gordon is a HouseLogic contributor and homebuilder.

WASHINGTON (AP) – Jan. 25, 2011 – The Consumer Confidence Index rose in January to its highest level in eight months with Americans growing a little more confident about the job market and business conditions.

The Conference Board said Tuesday its Consumer Confidence Index climbed to 60.6 this month, up from 53.3 in December. While that reading was better than economists had expected, confidence is still far from the 90 level that signals a healthy consumer mindset.

The January figure was the highest since last May’s 62.7. At that time, consumer attitudes were improving as economic growth seemed to be taking off. However, the economy stalled in the summer, and so did confidence.

Confidence has been depressed by unemployment that surged during the country’s worst recession since the 1930s and has stayed stubbornly high even though the downturn ended in June 2009. Confidence has not been above 90 since the recession began in December 2007.

However, moods may be lifting a bit. A new survey from the National Association for Business Economics reported Monday that the number of firms expressing positive hiring plans was at its highest level in 12 years.

In the Conference Board survey, the percentage of people surveyed who felt jobs were hard to get fell slightly to 43.4 percent from 46 percent in December. The share who expected to see more jobs six months from now rose to 16 percent from 14.2 percent.

While confidence has stayed weak since the recession ended in summer 2009, consumer spending has been picking up. During the 2010 holiday shopping season, sales increased at the fastest rate in six years.

Economists are hoping that consumer confidence will keep improving in 2011 as the economy begins to show greater signs of strength and unemployment declines.

The jobless rate fell to 9.4 percent in December from 9.8 percent in November, but the economy added only 103,000 jobs. Employers added 1.1 million jobs for all of 2010, or about 94,000 a month. The nation still has 7.2 million fewer jobs than it did in December 2007, when the recession began.

But many economists expect the nation will create twice as many jobs this year as it did last year. They note that people who still have jobs are not as worried about losing them as they might have been a year ago, and that people are spending more.

Economists expect that a tax cut which took effect in January – reducing the amount taken out of workers’ paychecks to pay for Social Security – will also lead to greater spending in the new year.

WASHINGTON (AP) – Jan. 24, 2011 – Industry economists say the U.S. economic recovery is gaining strength, with more firms expressing positive hiring plans than in over a decade.

A new survey from the National Association for Business Economics (NABE) finds that economists are more hopeful about overall economic growth, the job market and demand for companies’ products and services by many measures than they have been since the start of the Great Recession.

The survey found that business decisions are now “being driven by the fundamentals of an improving economy,” said Shawn DuBravac, an economist with the Consumer Electronics Association who analyzed the findings.

The quarterly survey includes the views of 84 economists for private companies and trade groups who are NABE members. The data are reported by broad industry groups. Many results are expressed as Net Rising Index, or NRI – the percentage of panelists reporting better outlooks minus the percentage whose outlook is bleaker.

The number of economists who saw hiring by their firms increasing over the next six months was 42 percent, compared with 7 percent who expected to lay off workers. The NRI of 35 was the highest in the 12 years that the question has been asked.

However, more layoffs were expected in the transportation, utility, information and communications sectors.

That optimism followed increased hiring by the economists’ firms during the quarter ended Dec. 31. About one-third of those surveyed said hiring had improved at their companies, compared with 6 percent who said workers were laid off. The NRI of 28 represented a 10-point increase over the previous quarter.

All major industry groups saw more demand for their products and services, the sixth straight quarter of positive results. Demand grew by slightly less than in the previous quarter, but has held relatively steady since last spring, the NABE said.

Eighty-two percent of the economists expected the nation’s economy to grow by two to four percent in 2011, up from 54 percent in October. The latest government data had the economy growing at a 2.6-percent annual rate in the July-September quarter.

Economists who saw their companies’ profits grow in the final quarter of 2010 outpaced those who saw margins shrink by an NRI of 21 percent – the largest spread since 2005.

Only 6 percent expected their firms to cut back on capital spending, the long-term investment that creates crucial demand for big-ticket manufactured items. Most expected to invest more in the next 12 months.

More than half of those surveyed said they were selling to overseas markets. Within that group, 97 percent said foreign sales were increasing or unchanged.

The survey was conducted between Dec. 17 and Jan. 5.

By: G. M. Filisko

Published 2010-02-10 11:24:53

By doing your homework before you buy, you’ll feel more content about your new home.

Follow these steps to ensure your home search is fun and productive.

Most potential homebuyers are a smidge daunted by the fact that they’re about to agree to a hefty mortgage that they’ll be paying for the next few decades. The best way to relieve that anxiety is to be confident you’re purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.

1. Decide how much home you can afford

Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.

2. Develop your home wish list

Be honest about which features you must have and which you’d like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top-five must-haves and top-five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.

3. Select where you want to live

Make a list of your top-five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR® to help you identify three to four target neighborhoods based on your priorities.

4. Start saving

Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies.

However, the lower your downpayment, the higher the loan amount you’ll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get.

Finally, if your downpayment is less than 20%, you’ll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.

5. Ask about all the costs before you sign

A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area—including home inspections, attorneys’ fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.

6. Get your credit in order

A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 for a home mortgage.

You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn’t up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.

7. Get prequalified

Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.

If you’re self-employed, you’ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.

More from HouseLogic

Learn how Fannie Mae and Freddie Mac mortgages can help you save on financing

Learn more about the costs of homeownership

Other web resources

Homebuyer counseling resources

Get a free credit report from each of the three credit reporting bureaus

G.M. Filisko is an attorney and award-winning writer who has thrice survived the homebuying process. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Before you put your home up for sale, use the right comparable sales to find the perfect price.

A house is comparable to yours in price if it's in the same neighborhood, on a similar street, and in the same school district. How much can you sell your home for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home.

Knowing how much homes similar to yours, called comparable sales (or in real estate lingo, comps), sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?

Your best comparable sale is the same model as your house in the same subdivision—and it closed escrow last week. If you can’t find that, here are other factors that count:

Location: The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.

Home type: Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.

Amenities and upgrades: Is the kitchen new? Does the comparable sale house have full A/C? Is there crown molding, a deck, or a pool? Does your community have the same amenities (pool, workout room, walking trails, etc.) and homeowners association fees?

Date of sale: You may want to use a comparable sale from two years ago when the market was high, but that won’t fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sales sweeteners: Did the comparable-sale sellers give the buyers downpayment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents can help adjust price based on insider insights

Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or a basement office—is one of the ways real estate agents add value.

An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.

More ways to pick a home listing price

If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen to him without taking the criticism personally).

Next, put your comparable sales into two piles: more expensive and less expensive. What makes your home more valuable than the cheaper comparable sales and less valuable than the pricier comparable sales?

Are foreclosures and short sales comparables?

If one or more of your comparable sales was a foreclosed home or a short sale (a home that sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.

A foreclosed home is usually in poor condition because owners who can’t pay their mortgage can’t afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.

Short sales are typically in good condition, although they are still distressed sales. The owners usually have to sell because they’re divorcing, or their employer is moving them to Kansas.

How much short sales are discounted from their market value varies among local markets. The average short-sale home in Omaha in recent years was discounted by 8.5%, according to a University of Nebraska at Omaha study. In suburban Washington, D.C., sellers typically discount short-sale homes by 3% to 5% to get them quickly sold, real estate agents report. In other markets, sellers price short sales the same as other homes in the neighborhood.

So you have to rely on your REALTOR’s® knowledge of the local market to use a short sale as a comparable sale.

More from HouseLogic

What You Must Know About Home Appraisals

6 Reasons to Reduce Your Home Price

Other web resources

New York State: “How Estimates of Market Value are Determined for Residential Properties”

What’s the Value of a View? Research from Texas Christian University

Carl Vogel, a freelance writer and former editor of The Neighborhood Works magazine, lives in a home in Chicago that is not typical of those nearby, so he appreciates a savvy comp.

Image: Tetra Images/Getty Images

If you believe your real estate assessment is too high, you can always appeal it and possibly save on your property tax bill. Tax planning for homeowners should start well in advance of the April 15 filing deadline each year. If you delay until the last minute, it might be too late to maximize tax credits and tax deductions. These tax tips for homeowners looking ahead to 2010 returns explain some of the things you can do now that’ll pay off later on your 1040.

Take a day to formulate a tax plan for the year. Depending on your circumstances, you might want to take advantage of energy tax credits or max out your vacation home deductions. The “What’s New in 2010” section of IRS Publication 17 offers a sneak peek at tax changes that might affect homeowners.

Claim remaining energy tax credits

It’s time to get cracking if you didn’t exhaust your full allotment of residential energy tax credits during 2009. Although tax credits for big projects like residential wind turbines and solar energy systems have no upper limit and are good through 2016, energy tax credits capped at $1,500 expire at the end of 2010. Eligible capped projects include new windows and doors, insulation, roofing, water heaters, HVAC, and biomass stoves.

Here’s how it works with capped federal credits: You can earn energy tax credits worth 30% of the cost of qualifying improvements, but the total tax credits can’t exceed $1,500 combined for 2009 and 2010. So if you only took, say, $700 worth of capped energy credits on your 2009 tax return, you’re still due for another $800 in credits in 2010. Some projects include the cost of installation—a furnace, for example—while others, such as insulation, are limited to the cost of materials.

Max out tax benefits of a vacation home

Use a vacation home wisely, and it’ll provide a break from taxes as well as the hustle and bustle of everyday life. The rules on tax deductions for vacation homes can get a bit tricky, but understanding and adhering to them can yield many happy tax returns.

If your vacation home is truly a vacation home meant for your personal enjoyment, as opposed to a rental-only income property, you can usually deduct mortgage interest and real estate taxes, just as you would on your main home. You can even rent out the home for up to 14 days during the year without getting taxed on the rental income. Not bad.

Now, let’s say you want to rent out your vacation home for more than 14 days in 2010, but also use it yourself from time to time. To maximize the tax benefits, you need to keep tabs on how many days you use your vacation home. By restricting your annual personal use to fewer than 15 days (or 10% of total rental days, whichever is greater), you can treat your vacation home as a rental-only income property for tax purposes.

Why is that a big deal? In addition to mortgage interest and real estate taxes, rental-only income properties are eligible for a slew of other tax deductions for everything from utilities and condo fees to housecleaning and repairs. Deductions are limited once personal use exceeds 14 days (or 10% of total rental days), so get out your calendar now to strategically plot your vacations.

Take advantage of tax breaks for the military

In salute to members of the armed forces serving overseas who want to purchase a home, the IRS is extending a lucrative tax perk for military personnel. If you spent at least 90 days abroad performing qualified duty between Jan. 1, 2009, and April 30, 2010, you have an extra year to earn a homebuyer tax credit. In addition to uniformed service members, workers in the Foreign Service and in the intelligence community are eligible.

Thanks to this extension of the homebuyer tax credit, qualifying military personnel have until April 30, 2011, to sign a contract on a new home. The deal must close before July 1, 2011. Just like non-military buyers, first-time homebuyers can earn a tax credit worth up to $8,000, and longtime homeowners can earn a credit of up to $6,500. The same income restrictions and $800,000 cap on home prices apply.

Military personnel can also get a break if official duty calls and they’re forced to move for an extended period. Normally, the homebuyer tax credit needs to be repaid if you sell your home within three years, but this requirement is waived for uniformed service members, Foreign Service workers, and intelligence community personnel. The new extended duty posting doesn’t need to be overseas, but it must be at least 50 miles from your principal residence.

Challenge your real estate assessment

You can’t do much about the rate at which your home is taxed, but you can try to do something about how your home is valued for taxation purposes in 2010. The process varies depending where you live, but in general local governments conduct a periodic real estate assessment to determine how much your home is worth. That real estate assessment figure is used to calculate your property tax bill.

You can usually appeal your real estate assessment if you think it’s too high. Contact your local assessor’s office to find out the procedure, and be prepared to do some research. There’s often no charge to request a review of your assessment.

Look for errors. You probably received an assessment letter in the mail, and many local governments provide the information online as well. Make sure the number of bedrooms and bathrooms is accurate, and the lot size is correct. Also check the assessed value of comparable homes in your area. If they’re being assessed for less than your home, you might have a case for relief.

Even if your assessment is accurate and comparable homes are being taxed at the same rate, there might be another route to tax savings. Ask your assessor’s office about available property tax exemptions. Local governments often give breaks to seniors, veterans, and the disabled, among others.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

Mike DeSenne is Online Managing Editor for taxes, finances, and insurance at HouseLogic.com, and the former Executive Editor of SmartMoney.com. He likes to do his taxes by hand, much to the dismay of his accountant.

Read more: http://www.houselogic.com/articles/tax-tips-homeowners-looking-ahead-2010-returns/#ixzz18fvHze3E