It’s hot to live in the country. Housing markets in less densely populated areas are seeing a surge in interest as the pandemic prompts more Americans to social distance.

Nationwide, homes in rural areas saw median sales prices increase 11.3% year over year in the four weeks ending Aug. 2, according to new data from the real estate brokerage Redfin. Suburban area home prices jumped 9.2% during that time, and urban areas also saw an increase of 6.7%.

Since April, homes in rural areas have seen higher price growth than suburban and urban areas, Redfin reports.

“We’ve been speculating about increasing interest in the suburbs and rural areas since the start of the pandemic,” Taylor Marr, Redfin’s economist, says. “Now we’re seeing concrete evidence that rural and suburban neighborhoods are more attractive to home buyers than the city, partly because working from home means commute times are no longer a major factor for some people. And due to historically low mortgage rates, interest is turning into action. There will always be buyers who choose the city because their jobs don’t allow for remote work or they place a premium on cultural amenities like restaurants and bars—which will eventually come back—but right now the pendulum is swinging toward farther-flung places.”

The increasing interest in rural areas and suburbs is likely being driven by the desire for more indoor and outdoor space and the rise in remote work, Redfin notes. Twenty-one percent of buyers recently surveyed say they want a designated place to work from home, and that same percentage also sought more outdoor space.

The typical home under contract in July in a rural or suburban neighborhood was more than 1,800 square feet versus about 1,500 square feet for the typical urban home, Redfin reports.

© Redfin

Even as mortgage delinquencies climb, foreclosure activity continues to be low. Foreclosure moratoriums ordered by federal and state governments during early phases of the pandemic likely helped to minimize the foreclosure rate, says Rick Sharga, executive vice president at RealtyTrac, a real estate data firm.

“It’s inevitable that there will be a significant increase in foreclosures once these moratoriums have expired, although it’s unlikely that we’ll see default rates reach the levels we saw during the Great Recession,” Sharga adds.

In July, 8,892 properties received a foreclosure filing, which includes default notices, scheduled auctions, or bank repossessions. That is down 83% from a year ago, RealtyTrac and ATTOM Data Solutions report. Nationwide, just one out of every 15,337 housing units had a foreclosure filing in July.

In June, distressed sales—foreclosures and short sales—comprised just 3% of sales, according to the National Association of REALTORS®.

With foreclosure moratoriums still in place, another wave of foreclosures likely won’t materialize until at least next year, after the maximum 12 months of mortgage forbearance expires for homeowners. Economists say if homeowners are able to return to work in that time, the economy won’t need to fear a foreclosure crisis. Still, some impact is inevitable once moratoriums expire, housing analysts note.

“Will there be some fallout? Of course,” Matthew Gardner, chief economist of Windermere Real Estate, told realtor.com® at the end of July. “But I don’t think it will be enough to cause [housing] prices to drop.”

According to the RealtyTrac and ATTOM Data Solutions report, the states with the highest foreclosure rates are Delaware (one in every 6,489 housing units with a foreclosure filing); South Carolina (one in every 7,328 housing units); Maine (one in every 7,542 housing units); New Mexico (one in every 8,255 housing units); and California (one in every 9,194 housing units). By metro level (areas with populations of at least 200,000), those with the highest foreclosure rates in July were Trenton, N.J. (one in every 3,445 housing units with a foreclosure filing); McAllen, Texas (one in every 3,833 housing units); Davenport, Iowa (one in every 4,038 housing units); Dayton, Ohio (one in every 4,055 housing units); and Albuquerque, N.M. (one in every 4,452 housing units).

Mortgage rates inched up slightly this week but still remained near historical lows. The 30-year fixed-rate mortgage averaged 2.96% this week, up from last week’s record low of 2.88%, Freddie Mac reports.

“Home buyer demand remains strong, especially for those in search of an entry-level home, where the improvement in affordability via lower mortgage rates has a material impact,” says Sam Khater, Freddie Mac’s chief economist. “Even with this week’s uptick, very low rates are providing a significant boost to the housing market that continues to hold up well during this time of uncertainty.”

The National Association of REALTORS® predicts that mortgage rates should continue to remain low and even drop as monetary policy keeps the benchmark Treasury yields under 1%.

Freddie Mac reports the following national averages with mortgage rates for the week ending Aug. 13:

• 30-year fixed-rate mortgages: averaged 2.96%, with an average 0.8 point, rising from last week’s 2.88% average. Last year at this time, 30-year rates averaged 3.60%.
• 15-year fixed-rate mortgages: averaged 2.46%, with an average 0.8 point, rising from last week’s 2.44% average. A year ago, 15-year rates averaged 3.07%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.90%, with an average 0.4 point, unchanged from last week. A year ago, 5-year ARMs averaged 3.35%.

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

The Federal Housing Finance Agency has announced a new mortgage refinancing fee that could cost homeowners about $1,500 extra on a $300,000 loan. The fee will apply to loans delivered to Fannie Mae and Freddie Mac starting Sept. 1, which means it could impact current refinancing applications.

The fee is “the absolute wrong policy at the wrong time,” Vince Malta, president of the National Association of REALTORS®, said in a statement Thursday. “It directly contravenes the administration’s own directives for federal agencies to do no harm to homeowners during the coronavirus crisis. It is especially troubling, since the GSEs use their profits from refinances to support home buyers in underserved markets—meaning those communities already suffering the most will be harmed the most by this action. Home values and residential real estate are a rock for the American economy right now. We should do everything we can to lower costs for households during this crisis, not make homeownership more expensive.”

The FHFA, which regulates Fannie and Freddie, has implemented a new price adjustment for refinance transactions of 0.5% of the loan amount. The new fee, which does not affect mortgage applications for home purchases, was added “in light of market and economic uncertainty,” a bulletin from Freddie Mac notes.

As mortgage rates dip to new lows, homeowners continue to rush to refinance, accounting for 65.7% of total mortgage applications. The Sept. 1 enactment date of the new fee means some refinancings already being processed may be affected. If the refinance application is already locked in, lenders will be unable to adjust and will have to absorb the fee themselves. However, if the refinance application isn’t locked, the consumer likely will have to pay the fee, HousingWire reports.

Bob Broeksmit, CEO and president of the Mortgage Bankers Association, urged the FHFA to withdraw its “ill-timed” directive. “The housing market has been able to withstand many of the most severe effects of the COVID-19 pandemic,” Broeksmit said in a statement. “The recent refinance activity has not only helped homeowners lower their monthly payments, but it is also reducing risk to the GSEs and taxpayers. This announcement is bad for our nation’s homeowners and the nascent economic recovery.”

Buyers are finding greater selection in their house hunt as new listings increase above pre-pandemic levels, according to realtor.com®’s latest Weekly Recovery Report, reflecting the week ending Aug. 8. The increase in new listings now brings all four major components of housing activity tracked on the index—also including housing demand, asking prices, and pace of sales—above the pre-pandemic baseline of January 2020.

“Seller confidence has been improving gradually after reaching its bottom in mid-April, and now it appears to have reached an important recovery milestone,” says Javier Vivas, director of economic research for realtor.com®. “After five long months, sellers are back in the housing market; while encouraging, the improvement to new listings is only the first step in the long road to solving low inventory issues keeping many buyers at bay.”

The realtor.com® Housing Market Recovery Index reached a reading of 105.6 nationwide for the week ending Aug. 8, 5.6 points above the pre-COVID-19 baseline. The index uses 100 as its baseline period to compare the housing market’s recovery to January 2020, before the coronavirus outbreak hit the U.S.

While new listings growth has recovered to pre-COVID-19 levels, it still remains down 6% year over year, realtor.com® reports. “The small number of homes for sale has been a key limited factor for buyers in the market, so continued recovery in new listings bodes well for home sales in the coming months,” realtor.com® reports.

Meanwhile, homes are selling four days faster than a year ago, and median listing prices jumped 9.9% over a year ago, realtor.com® reports. “The combination of eager buyers, low mortgage rates, and dwindling for-sale homes set the stage for further price increases,” realtor.com® notes in its report. “But the tide could be turning as sellers come back to the market and new construction picks up. This could help price growth move back to a more normal rate of increase.”

© realtor.com

Appraisal issues can be common hangups in a real estate transaction. In June, appraisal issues were blamed for causing delays in 18% of transactions (the second highest reason behind issues related to obtaining financing) and for terminating 9% of contracts, according to the REALTORS® Confidence Index.

While appraisal issues may be unavoidable if home prices are escalating too quickly and not matching offers, homeowners can still prepare for an appraisal to help ensure their home is presented in its best possible light.

Forbes.com emphasizes three main areas of a home in preparing for an appraisal: the kitchen, bathroom, and curb appeal.

Indeed, curb appeal counts. In a new study in the Journal of Real Estate Finance and Economics, researchers found that properties with top-notch curb appeal tended to sell for 7% more than similar properties in the same area that had poor curb appeal.

“Expand your hardscape,” Mike Fitzpatrick, vice president of U.S. Lawns, told Forbes.com. “If it’s within your budget, create an additional living space outside by expanding your stone or brick patio. However, be sure to consider if the higher valuation will exceed the added investment.”

Lower-cost ways to boost curb appeal: Mulch around trees, shrubs, and plants and add pops of color, such as flower pots at the door. The key is to set the right first impression that the house is well cared for, from the outside in.

Inside, mid-range to upscale bathroom remodels tend to recoup around 60% return on investment, according to Leah Tuttleman, interior designer for Re-Bath. A bathroom redo may not be in the budget, but even simple projects can make a difference to the appearance. First off, address any caulking or other glaring problems before cosmetic issues. While appraisers won’t be judging your decor, you can show that the house is well-cared for and up-to-date. For example, update vanity lights and faucets so that they match; matte black and brass are trending. Also, Tuttleman told Forbes.com that light, neutral-colored bathrooms can help make spaces feel larger and calming. Also, a simple fix: Replace low-wattage bulbs with a higher watt LED bulb and use dimmers if possible, she suggests.

Kitchen remodels can be costly, but they can get you around 77.6% return on investment, says Lisa Seeger, design trend expert at N-Hance Wood Finishing. “Sometimes all it takes to revamp the entire kitchen is a simple cabinet color change,” Seeger told Forbes.com. “Some trending looks include all-white cabinets, black cabinetry, jewel-toned, two-toned cabinets, and gray.” Updated hardware on the cabinets and lighting can go a long way in upgrading a space too. Read more: The Jewelry in Your Kitchen Design and Decor Details: Choosing the Right Cabinet Hardware