Repair requests after a home inspection often are the last major hurdle to clear on the way to settlement for home sellers. Sometimes the inspection report can leave buyers uncertain about what inspection repairs truly need to be fixed and what’s up for negotiation.

Many buyers over the last few months had been waiving home inspections to better compete in a bidding war. Twenty-one percent of home buyers waived the inspection contingency in September, according to the REALTORS® Confidence Index Survey from September, a survey of real estate professionals conducted by the National Association of REALTORS®.

But that is lessening, and home inspections are again a common request among buyers before completing a sale. Home inspections have long had the reputation of jeopardizing housing deals. And they still are: 10% of contracts in September were delayed due to a home inspection or environmental issue; 9% of contracts were terminated altogether for those reasons, according to the REALTORS® Confidence Index Survey.

Real estate professionals often find themselves helping their clients sort out what needs to be fixed from a home inspection report, what’s up for negotiation, and what buyers may want to let go of.

Sellers don’t have to fix everything that a home inspection turns up. No house is perfect, after all.

Lenders may require some fixes to fund buyers’ loans. Those usually involve any defects uncovered with any structural elements of the home, building code violations, or safety issues.

Inspectors often carefully evaluate the condition of the septic system, heating, electrical systems, roof, plumbing lines, and HVAC system. Problems with any of these housing elements will likely result in a fix from the home seller or a credit to the buyer, according to a recent article at realtor.com®.

“As a seller, you should never sign an inspection contract until you fully understand its obligations, particularly where it concerns your responsibility for fixing things,” Michele Lerner, author of Homebuying: Tough Times, First Time, Any Time: Smart Ways to Make a Sound Investment, told realtor.com®.

Cosmetic issues and normal wear and tear uncovered by a home inspector aren’t mandatory to fix. “Some inspection contracts will expressly state that the buyers cannot request any cosmetic fixes to be made and can only ask that structural defects, building code violations, or safety issues be addressed,” Lerner told realtor.com®.

Some home sellers are offering a home warranty to help ease buyers’ concerns from items that turn up on a home inspection.

It’s trendy to paint a brick house white. Some homeowners are jumping on the bandwagon painting their more dated red brick, for example, a more contemporary white. But others have strong views that you should never paint over original brick.

Painting a house can offer a modern update to the exterior of a home and boost its curb appeal, according to a 2021 report on the exterior and interior color trends by Clever Real Estate. “Going with a trendy color is a great way to maximize your home’s appeal—but don’t get lost in the crowd” so the home’s exterior looks the same as every other house on the block, the report notes. Exterior color schemes usually change every 10 to 20 years. Some of the trendiest exterior colors for 2021 include whites, grays, or darker slate tones, according to Consumer Reports.

To get the white house look, homeowners are painting over their brick. An advantage to painting the original brick is that it can offer some protection to the home, notes a recent blog post at Redfin on the pros and cons of painted brick. Original brick can deteriorate over time and water can be trapped within the pores. Painting the brick could offer a layer of protection.

Painted brick can also be easy to maintain. Use a hose to simply remove dirt and debris from the home. However, pressure washing could damage the paint, Redfin’s article warns.

But one of the biggest cons to carefully consider before painting the brick: “Getting back to the look of the original brick is nearly impossible once it is painted,” Redfin’s blog post warns. “Not only is it difficult to retrieve the authentic look, but painting with the wrong paint can trap existing moisture and cause damage.” The home will likely never be restored to how it looked before.

Also, after a few years, the paint will begin to peel. A new coat of paint will likely need to be applied every three to five years.

Housing in Infrastructure Bill

Leaders from the National Association of REALTORS® and other housing groups went to the U.S. Capitol on Wednesday to urge lawmakers to preserve the affordable housing provisions in the infrastructure bill Congress is debating. Lawmakers are whittling down the package—which invests in various programs such as health care, paid family leave, affordable housing, and education—from its current $3.5 trillion price tag. President Joe Biden hinted Tuesday that the final bill could be closer to $2 trillion, and media reports last week suggested housing provisions could be scaled back or eliminated.

“NAR’s 1.5 million members serve consumers in every U.S. ZIP code to ensure a fair and equitable housing market,” NAR CEO Bob Goldberg said during Wednesday’s visit to Capitol Hill. “But making sure everyone has a place to call home isn’t just the foundation of our economy. It’s the fabric of our communities, our families, and each of our lives.”

An NAR report in the spring found that America faces a housing shortage of about 6 million units, which should be an impetus for Congressional action, Goldberg added. “As a nation, we have to find ways to close this shortfall. Doing so will be particularly meaningful for lower-income households, millennials, and households of color.”

Senate Banking, Housing and Urban Affairs Committee Chair Sherrod Brown (D-OH) and House Financial Services Committee Chair Maxine Waters (D-CA) joined Goldberg and other housing leaders at a press conference near the Senate steps. Officials from a wide range of real estate industry groups were present, including Habitat for Humanity, the National Association of Hispanic Real Estate Professionals, the National Association of Home Builders, the National Fair Housing Alliance, the National Housing Conference, and the National Low Income Housing Coalition.

The real estate industry accounted for 18%—or $3.83 trillion—of America’s gross domestic product in 2020, according to NAR data. Each home sale injects roughly $94,000 into a community’s economy. View this NAR fact sheet:

©National Association of REALTORS®
Reprinted with permission

The housing market will likely remain hot, even as mortgage rates and home prices continue to rise, say economists at the government-sponsored enterprises Fannie Mae and Freddie Mac, who remain bullish on housing’s outlook.

The GSEs predict continued high levels of homebuyer demand and growth in purchase originations in 2022.

“Despite some obvious headwinds, the housing market remains strong as the economy grows,” Sam Khater, Freddie Mac’s chief economist, says. “Even as mortgage rates are expected to increase and home prices continue to rise, homebuyer demand remains steady as inventory issues have slightly improved.”

Khater expects that in 2022 strong home price growth will lift home purchase mortgage originations by more than $500 billion from 2020.

Freddie Mac and Fannie Mae economists predict that home prices will grow by nearly 17% overall for 2021 and then slow to about 7% growth in 2022. They predict the 30-year fixed-rate mortgage—which likely will end the year averaging about 3%—will inch up to 3.5% in 2022, a projection similar to expectations by National Association of REALTORS® economists.

Fannie Mae economists say that new single-family construction remains in high demand but continues to be hindered by ongoing supply constraints in materials and skilled labor. Also, economists expect inflation to run higher and suggest that the Fed’s tightening of its monetary policy, first by tapering its asset purchases, will likely impact housing.

Still, “even a modest tightening of monetary policy would of course impact housing, but we expect the effects to be largely muted given current market conditions,” says Doug Duncan, Fannie Mae’s chief economist. “Mortgage rates may rise in response to the tighter environment, but we expect the severe shortage of homes for sale to remain the primary driver of strong house price appreciation through at least 2022, limiting interest rate effects on home sales and home prices.”

Millions of people are reevaluating where they want to live as remote work options grow and the pandemic prompts lifestyle changes. Livability.com analyzed more than 1,000 small to mid-sized cities while factoring in safety, affordability, economic stability, outdoor recreation, accessibility, community engagement, and more.

The cities that topped this year’s list “offer the exact things so many of us are craving right now: connection, affordability, and the space and opportunity to grow,” according to Livability.com.

The 20 places that topped Livability’s list for 2021 are:

1. Madison, Wis.
2. Ann Arbor, Mich.
3. Overland Park, Kan.
4. Frederick, Md.
5. Charlottesville, Va.
6. Quincy, Mass.
7. Hillsboro, Ore.
8. Roseville, Calif.
9. Colorado Springs, Colo.
10. Vancouver, Wash.
11. Corvallis, Ore.
12. Raleigh, N.C.
13. Omaha, Neb.
14. Rochester, Minn.
15. Columbia, Md.
16. Franklin, Tenn.
17. Plano, Texas
18. Lincoln, Neb.
19. Asheville, N.C.
20. Sioux Falls, S.D.

View the full list of the top 100 at Livability.com.

Nearly half of U.S. households who heat their homes with natural gas can expect higher bills this winter—an average of 30% higher compared to last year, the Energy Information Administration warns.

It could be even higher: If the winter is 10% colder than average, homeowners can expect heating bills that top 50% higher than a year ago.

Even if the winter is 10% warmer than average, heating bills are still expected to be 22% higher than last year.

Natural gas home heating bills are expected to average $746 from Oct. 1 to March 31. That is up compared to $573 during the same period a year ago, The Wall Street Journal reports.

“We are very concerned about the affordability of heat this winter for all customers, but in particular those who struggle every day to afford their utility services,” Karen Lusson, a staff attorney for the National Consumer Law Center, told The Wall Street Journal.

Homeowners may want to take some steps before winter. For example, make sure heating systems are operating correctly and efficiently. Improper installation of heating, ventilation, and air conditioning systems can lead to 30% higher energy use, according to the National Institute of Standards and Technology.

Also, homeowners may want to seek affordable options like “door pillows” to plug spaces under the doors and take steps to weatherize their homes to reduce expenses. Read more: Is Your Home Winter-Proof?

Also, for those struggling to keep up with bills, some states offer programs—like the Low Income Home Energy Assistance Program—that provide discounted payment plans for those eligible (often people whose incomes don’t exceed 60% of their state’s median pay).

The 30-year fixed-rate mortgage rose sharply this week, averaging 3.05%. That marks the highest average since April, according to Freddie Mac’s mortgage market survey.

“As inflationary pressure builds due to the ongoing pandemic and tightening monetary policy, we expect rates to continue a modest upswing,” says Sam Khater, Freddie Mac’s chief economist. “Historically speaking, rates are still low, but many potential home buyers are staying on the sidelines due to high home price growth. Rising mortgage rates combined with growing home prices make affordability more challenging for potential home buyers.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 14:

• 30-year fixed-rate mortgages: averaged 3.05%, with an average 0.7 point, rising from 2.99% last week. A year ago, 30-year rates averaged 2.81%.
• 15-year fixed-rate mortgages: averaged 2.30%, with an average 0.7 point, increasing from last week’s 2.23% average. A year ago, 15-year rates averaged 2.35%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.55%, with an average 0.2 point, increasing from last week’s 2.52% average. A year ago, 5-year ARMs averaged 2.90%.

Freddie Mac reports average commitment rates along with points to better reflect the total upfront cost of obtaining a mortgage.