Housing Starts Dropped 14.6 Percent

The pace of U.S. home construction sank last month as a glut of unsold homes kept builders at bay, hinting economic growth will remain tepid and keeping hopes alive for interest-rate cuts.

The Commerce Department said housing starts dropped 14.6 percent in October to an annual pace of 1.486 million, the lowest level in more than six years.

At the same time, building permits, which offer a signal on future construction plans, fell 6.3 percent to a 1.535 million unit pace, the weakest in nearly nine years.

The report, which showed starts off an eye-catching 27.4 percent from October of last year, was much weaker than economists on Wall Street had expected.

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ABC's of Borrowing

When buying real estate, a lender will typically use the letters of the alphabet to rate borrowers. The letters rank the level of risk the lenders perceive:

"A"
signifies prime borrowers, those who always pay bills on time and whose debt-to-income ratio is within acceptable limits;

"B"
borrowers are those who have been 30 days late on a charge or mortgage payment within the past year;

"C"
denotes a riskier credit profile, with several 30-day or 60-day late payments; and

"D"
indicates serious credit problems such as a long-term delinquency or a bankruptcy in the past.

The level of risk determines the interest rate available to the home buyer. A home buyer with a B, C, or D rating could end up paying a significantly higher interest rate on a mortgage than someone with an A credit rating.

3 Most Expensive Home Equity Loan Mistakes

Home equity loans are undoubtely a great source of credit, but choosing the right home equity loan should not be a reckless decision. Here are three of the most common and  most expensive mistakes when taking out an equity loan:

1. Choosing a bad home equity lender

The home equity market is very competitive. At the moment, home equity lenders offer the lowest interests rates ever. Nonetheless, before deciding on a home equity lender, it is good to shop around and compare the offers on the market. The things you should be interested in when comparing the offers are: interest rates, loan terms and conditions, closing costs and lending fees.

2. Borrowing too much money

The amount of money you borrow is the amount of money you will have to pay back later. It seems to be the obvious thing, but very often homeowners borrow too much money and they can’t afford to pay it back which results in losing their houses.

3. Missing payments

Missing payments is the most common and the worst mistake among the three. If you fail to make your payments for a few months the balance you owe may become so high that it could be difficult to ever pay it back. In some cases, if you miss too many payments the bank could seize your house. Therefore, before deciding upon a home equity loan, be sure to read carefully the terms and conditions of the loan and ask your lender what happens when you miss a payment.

Products for an Odor-Free Home

The battle against bad smells is moving to a new front.

For years, makers of room deodorants and plug-in air fresheners were the big players in the home-odor-fighting business. But lately, textile manufacturers have entered the fray. They've taken some of the home's most odor-absorbent materials, re-engineered them, and created a host of new products that promise to neutralize bad smells. Among the latest technologies: fabrics treated with bacteria-killing silver ions, upholstery its maker says is woven so tightly that smells can't get in, even drapery embedded with the same sort of enzymes found in yogurt.

In July, Home Depot introduced a new line of carpeting, Puresque, which has salts that are chemically bonded to its fibers. The retailer says the salts "act like magnets to trap and destroy odors." Manufactured by Beaulieu of America, the carpet sells for $1.77 to $3.22 a square foot, uninstalled, about the same price as non-odor-eating carpets. Last year, textile giant Milliken & Co. started putting odor-fighting ions in all of its carpeting and fabric. And Interface's FLOR carpet tiles, introduced in 2003, have antimicrobials the company says inhibit the growth of smelly bacteria.

Researchers say the market is ripe for such products. Americans are more obsessed with sanitation and personal hygiene than many other cultures, says chemist Craig Warren, a visiting scholar at the University of California in San Diego and the science adviser to the Sense of Smell Institute in New York.

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Home Sales Pace to Coast in 2007

U.S. home sales should "coast" at a somewhat lagging pace next year and prices should remain flat as the sector works through its current downturn.

Overall home price gains should be modest in 2007 while sales will hold steady, David Lereah, the association's chief economist said in a statement from the NAR annual meeting in New Orleans.

In September, existing home sales slipped for the sixth straight month to their slowest rate since January 2004, when a multiyear housing boom was underway.

Despite the slowdown, Lereah said, 2006 is expected to be the third-strongest year of the nation's housing market on record, behind only by 2004 and 2005.

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