With millions of Americans traumatized by the dramatic decrease in value of their homes, most are now willing to strip their new abodes of popular features from the yesterdays. For example, home theaters used to be a must-have. But right now, it is discarded in favor of smaller homes that fit changing consumer lifestyle. According to Heather McCune from the Bassenian Lagoni Architects, “The future isn’t something we’re 100% sure about…The answer for most home buyers is authenticity.”

For most American home buyers, this will mean buying smaller homes. Carol Lavender from the Lavender Design Group thinks that large kitchens, old-fashioned bathrooms, and wine grottos will become popular today. “It’s all about family togetherness – casual living, entertainment, and flexible spaces.” In this regard, the must-haves for homes include the following:

Energy-Efficient Appliance

With “green” being the byword right now, energy-efficient home is a must. This means that everything from the windows, insulation, and appliances will be scrutinized for the energy they save. The shift in attitude doesn’t mean that home buyers prefer synthetic or recycled materials though because there are good alternatives in the market.

Large Kitchens

Since most people spend a lot of time in the kitchen, it is almost a given that they would be willing to spend money on this. In fact, the tough times illustrates just how important the kitchen is. It is a place where home owners create, experiment, and have fun. Homes that contain large kitchens with an island can hold its value better than others.

Office/Study Area

A place where you can think, analyze, and strategize is important for working professionals. So it is no surprise that the office/study area is given preference when a homeowner is asked to choose between a home theater and this area. Some people even opt for a smaller dining room just to have an office/study space.

Traditionally, homes will have good value if it has a good location, near offices or within proximity of renowned schools. It also helps that homes like these are usually situation in well-maintained neighborhoods with friendly communities. However, the above-mentioned factors no longer provide homeowners with the assurance that their homes will hold its value. Why? The neighbor’s mortgage.

It is estimated that around a third of all mortgage holders are holding a loan balance that is higher compared to the market value of their property right now. They are known as “underwater” borrowers and they are unlikely to many of them are unwilling to pay more for a home that actually costs less.

The finding released by the Congressional Oversight Panel on the Troubled Asset Relief Program points out that when troubled homeowners experience further financial distress, they are likely to lose their homes due to little or no incentive to keep their properly. The resulting empty properties, especially when concentrated in certain communities, will have a dramatic adverse effect on the home prices at that area.

Home Abuse: It is Not Wanted

New developments typically look fresh and finishing touches like landscaping are usually still being added. But John Sullivan of the National Associated of Exclusive Buyer Agents report that new subdivisions are experiencing home abuse. Lawns look straggly, the paint appears dirty, and the windows are dark from dirt. These are all signs that the previous owners experienced mortgage problems.

When the mortgage debt declines 20 percent below the property value, there is a high likelihood that it will be foreclosed. Evan Feldman from ZipRealty tries to inform potential home owners about this threat. Buying a home is the single biggest investment you will make. By getting all the information about the neighborhood and the community, shock and financial losses can be avoided later on.

For decades, middleclass America has been the bastion of economic growth and activity. Today, the United States might be witnessing the fall of this segment as their debts shoot through the roof. The financial crisis has definitely hit ordinary Americans the hardest. But before you blame everything on the bankers, it should also be noted that over 100,000 middle-class families filed for bankruptcy every month since 2007.

Statistics shows that one in five Americans today is either unemployed or underemployed. One in eight is in foreclosure or default. And one in nine can’t pay the minimum repayment required on their credit cards. People who are about to retire are also facing incredible challenges because the crisis has just wiped out more than $5 trillion on their wealth (savings and pensions). The list of blogs below highlights other developments that might signal the end of middleclass Americans.

The Rebel News, in the post “US Middle Class Hit Hard by Current Economic Vows”, summarizes key findings that show the vulnerability of ordinary Americans. It also stated that classic lifesavers such as real estate ownership and higher education have lost its powers in the current condition. It has, in fact, become liabilities to the financial system.

Ronni @ Time Goes By wrote a post titled “Imagining Life without a Middle Class”. He gives readers the big picture and the small picture. In the latter, he recounted that most people are spending most of their income on necessities. If this trend goes on, there will not be enough disposable income for any other activity.

Elizabeth Warren @ Huffington Posts compiled research statistics in the post “America without a Middle Class” that demonstrate the fall of the United State’s middle market. Among the key figures that were showed include the comparison between productivity & compensation, income growth during boom times, and the median income of households.

In an effort to jumpstart real estate prices, the Obama administration has extended a key tax credit for first-time home buyers and “move-up” home buyers. The HR 3548 also offers more help for unemployed individuals as well as people struggling with mortgage delinquency. The $8,000 tax break for first time homeowners will be valid until May 1, 2010. Meanwhile, “move-up” buyers need to sign the purchase agreement before May 1, 2010 and then close the deal before July 1 for the tax credit to be valid.

It should be noted that not everyone is eligible for the tax break. For example, individuals with adjusted gross incomes of above $125,000 a year and couples with over $225,000 a year cannot get this advantage. However, the new bill still provides a better deal compared to the previous one as the latter set the incomes at $75,000 and $150,000 respectively. This means that an additional segment of the market can get assistance. The following blogs provide more details about the extended tax credit:

Bob @ Broker for You uploaded an informative article titled “Move Up Home Buyers Tax Credit”. The content is particularly beneficial for individuals who are looking to buy a better home for themselves or their families. For example, it lets you know how long you should have stayed in your current home in order to be eligible for it as well as other details.

Alexis @ BV on Money wrote the blog post “6,500 Tax Credit for Home Buyers: Owners Have Good Reasons to Buy”. It talked about the main benefits of getting the tax break. Individuals who intend to buy a house in the near future should consider the credit because it is not everyday that a deal like this is available from the government.

Jeff @ Good Financial Cents has an interesting article. The “$8,000 First Home Buyer Tax Credit is Extended and $6,500 Credit Added” post provides basic insights about what you can expect from the recently passed bill. He also cited the effects this bill will have on individual households and the economy in general.

There is good news and bad news in the mortgage industry. The good news is that the rate at which homeowners lag behind on their mortgage has slowed down for the third consecutive quarter. The bad news is, the delinquency rate has hit another record high overall.

For the third month ending September 30, it is estimated that 6.25 percent of mortgage loans within the United States were 60 days or more past the due date. Based on the TransUnion finding, the figure is up 58 percent from 3.96 percent just last year. This figure is quite alarming because being overdue for 2 moths is usually the initial step towards foreclosure since the amount of money necessary to keep up is beyond the capability of most families to save.

The increase from the second to the third quarter wasn’t as high as the 11.3 percent rise during the first to the second quarter though. In addition, it is a lot lower than the 14 percent leap in the quarter before that. The slowing rate of delinquency is seen as a positive sign. However, the fact that there are still too many foreclosures out there shows that the industry is still problematic. According to F.J. Guarrera, the TransUnion VP for financial services, the firm doesn’t expect the figure to improve until the middle part of 2010.

It is also important to note that certain areas are hit harder compared to others. For example, Nevada has the highest rate of delinquency at 14.5 percent which is up from 7.7 percent last year. Another struggling area is Florida with a delinquency rate of 13.3 percent.

There are two factors that need to be resolved before mortgage delinquency rates goes down to a manageable level: unemployment and home values. Unless these two crucial aspects are improved upon, delinquency rates will take longer to resolve.