Best case scenario exactly what airqual says - it's a sealant/caulking issue - you can recaulk the entire area and deal with the mold. If you have to tear out the tile work it gets more expensive quite a bit. I don't know what to advise with plaster walls - don't have those around here but I still think you probably have no choice but open up the wall to let it dry and get mold out. One thing I might try - if you can get the baseboards off the wall you could cut a hole in the wall at the lower level and see what is in the wall cavity perhaps this way (depending how high your trim goes, remember there is a baseplate). You could then patch with drywall as it's going to be hidden. but if you're not the DIY type at all, probably best to just call someone in. You have to pull the carpet out no matter what and padding and get everything away from that wall. If you do that and can identify which area looks "wettest" then that would give a clue where to start looking and I'd do that before anything else. Give servpro or other type business a call to come out and see the issue. They'll give you an estimate, I have no idea what they charge but they have all kinds of mold abatement sprays that will kill the stuff without having to totally destroy the wall. Sorry can't give you more help - I'm sure it's incredibly disappointing and stressful.

Check above the rooms (under the roof) for dead animals in the attic. Squirrels and mice are common invaders. If you have a chimney on an outside end-wall of the house and the chimney goes though the peak of the roof, that may be an entry point. Builders may frame the house and roof before the chimney is built (full brick chimney). After the chimney is built, there may be a gap where the eave box meets the chimney and the top side is bridged by roofing shingles, but underneath, the eave box does not meet the chimney. This is were squirrels entered my house. They got inside the eave box, moved down to the soffet (where the rain gutters are) and now had a lateral run the length of the house. They could enter the attic anywhere they pleased.

I've copied & pasted a comment I made 20 minutes ago! haha Well... I could probably write 3 pages worth of nonsense, which would seem "tainted" because I'm in the business of manufacturing hardwood flooring. But the short version is... over the years, we've provided hardwood flooring for a number of clients, and have NEVER had anyone comment that it was the wrong decision. The consensus USED to be that carpet was preferable, because it was "warm & soft", however the test of time has proven that wood flooring is: A} "environmentally friendly" (being a product of nature...) B} Provides excellent insulation C} Much easier to maintain than carpet D} With the little bit of care needed, it will outlast carpet for DECADES, and with a bit of attention to product appearance/choice, it will remain "in style" almost indefinitely. E} MOST importantly... hardwood flooring is a stable product, which will not "SHED" all of the nasty acrylic/nylon/petroleum based fibers into the air, which is what we BREATH... (that which isn't sucked up by the vacuum cleaner). Most people attribute "dusty furniture" to DIRT... when it's a known fact that DUST is mainly particulates which have been collected by, or shed by CARPET. Okay... I'm done! haha

Hi, Abhish, Stucco can indeed wick up moisture as Kevin notes above. You should ensure the perimeter of your home is properly graded to ensure rain water is directed away from the foundation. The code in our area requires 6 inches of fall in 10 ft or a 5% grade; yours may be different. Hopefully, that's the only issue and grading fixes the problem. In the event it's not, keep in mind that wicking of moisture is not the only way moisture can get into a wall assembly with stucco cladding and you may need to do something else to mitigate it. Since your home was constructed around 1950 (assuming no remodeling of the exterior stucco) I assume you have a traditional, 3-coat cementitious stucco installed over metal lath installed over asphalt-saturated felt (a.k.a., tar paper.) Best practice is to use two layers of 15 lb. felt to create some drainage channels between the layers, but a single layer of 30 lb. felt was a permitted alternative when I built a home with cementitious stucco 22 years ago. Traditional cementitious stucco is a "reservoir cladding" meaning it has the capacity to store water. Cementitious stucco, once wetted, would dry both to the exterior and to the interior of your home, albeit at different rates depending on interior and exterior conditions and the properties of the felt. Exterior conditions that may increase wetting include orientations more susceptible to wind-driven rains, and walls which dry more slowly due to shading. The condition of the stucco (e.g., cracks) can also contribute to increased wetting. Just like us, (wives aging like fine wines being the notable exception) asphalt-saturated felt deteriorates over time. Homes I've remodeled which were constructed in the 1950s generally have pretty thin felt and it's usually pretty brittle (for the record, 70 years of service life is more than you should expect from many synthetic materials, too.) The deterioration changes the properties of the felt and allows more moisture to move to the interior side. That can increase the relative humidity in the wall cavities and the adjacent living areas since it is drying to the interior. In the event it is, you'll want to get things dried out before mold/mildew becomes an issue. Running a dehumidifier is a good idea. Another way to deal with the deteriorating felt layer is to reduce water absorption by the stucco by painting it. You'll need to use a vapor-permeable paint (permeance greater than 10) which will slow absorption, but still allow drying to the exterior. Best wishes for a successful fix.