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Buying a home is a significant investment, and ensuring the house is in the best condition possible is a top concern for any buyer, regardless of whether it’s your first home or investment property. It’s easy to get caught up in the excitement of buying a home, but you’ll want to make sure you include a home inspection in your list of priorities to avoid any potential issues or unforeseen costs as you get further into the homebuying process. 

A general home inspection is almost always recommended for anyone buying a home. However, savvy buyers will do their due diligence by scheduling specialty home inspections, especially if the house is older or has specific features. From the roof all the way down to the foundation, there are several specialized types of home inspections you may want to consider before sealing the deal on your dream home.

Do I need a specialized home inspection?

“When discussing the importance of any type of home inspection with a client, I find the analogy of people seeing a doctor helpful,” says Brian Wendorf of Integrated Home Inspections. “Getting a home inspection is like seeing a trusted general practitioner who will evaluate overall health and recommend seeing a specialist when there is a question or concern about something that may be a latent issue.  The things we can’t see can expose the greatest concerns to our underlying health.  Like our bodies, a house can be seen as a holistic set of systems and structures. It’s important to get a home inspection to help understand the condition, need, and overall viability of a home’s usefulness to provide a happy and healthy place to call home or a sound investment.”

Depending on the home’s age, location, or condition, you might consider special types of home inspections to investigate potential issues common in homes in your area. General home inspections are great at giving you an idea of the overall state of the house at that point in time, but they do not typically test for things like asbestos or mold. “From crawl spaces to foundations, plumbing to HVAC systems, these inspections provide peace of mind, uncover hidden issues, and ensure you’re making a wise investment in a safe and comfortable living space,” says Luis Roses, owner of MIA Inspections. “Don’t settle for uncertainty; let comprehensive inspections protect your investment and bring you lasting peace of mind.”

When it comes to buying a home, you want to make sure you know all there is to know about the property before signing on the dotted line. In fact, here are 16 different types of home inspections you should consider:

1) Roof inspection

Most general home inspections will catch obvious roof problems, such as dark streaks or stains on your ceiling or loose shingles, with a visual inspection from the ground. However, a roof inspector will conduct a more thorough inspection that may reveal issues that aren’t visible to the untrained eye. This can include checking for leaks, unsecured shingles that could allow water to enter the home, and the condition of the gutters. 

2) Chimney inspection

A chimney inspection can alert you of any potential problems in the firebox or flue, buildup, or blockages that you can bring to the homeowners to fix before closing on the home. Like all inspections, the inspector will perform a visual assessment for exterior cracks or damage in the mortar and clear the chimney of any buildup of creosote (a byproduct of burning wood) that can combust if left untreated. This type of home inspection aims to prevent chimney fires and smoke or odors from seeping inside the home when the fireplace is lit during the colder months. 

3) Attic inspection

The roof may look sound and secure from the outside, but there may be signs of structural damage in the attic that can be easily missed with a general inspection. If you’re planning to look for your dream home in Phoenix, AZ to enjoy sunny weather year-round, you can expect to have your air conditioning running day and night, which can easily add to your energy bill. An attic inspection will let you know if there’s sufficient or damaged insulation that needs to be remedied. Moreover, a trained specialist will have the equipment necessary to identify signs of mold or moisture that can compromise the foundation’s integrity.

4) Electrical inspection

Regardless if you’re looking at a new construction or an older home, making sure the wiring is up-to-date and complies with city codes will help you avoid any troubles later on. Safety, comfort, and improved energy-efficiency are a few of the benefits you will gain from having your electrical systems inspected by a professional. Wires can become frayed and damaged from regular wear-and-tear and pose a dangerous fire hazard to your home and family. 

5) HVAC inspection

A strange sound or smell could indicate an underlying issue that could affect your HVAC system, leading to increased heating and cooling costs, or worse, needing to replace it with a whole new system. An HVAC inspection provides a clearer picture of the home’s heating and cooling system, and can even give you recommendations for repairs or energy-efficient upgrades.

6) Mold inspection

Just because you can’t see mold doesn’t mean there isn’t any lurking away in your dream home. In fact, a mold problem could indicate that the home is harboring larger issues such as water damage, leaks, or even flooding. A specialist trained in mold remediation will typically conduct a visual assessment and sample the air and surfaces in the home to determine the type of mold present. This type of home inspection may even use thermal imaging to locate damp or cold spots behind walls where mold tends to thrive. 

7) Pest inspection

Termites and other wood-loving pests can cause irreparable damage to the property that is costly to replace. A general home inspection may show areas of damage that might attract these unwanted guests, but only a trained specialist can definitively identify if there is continuing presence of pests, such as termites, carpenter ants, rodents, spiders, in your home’s exterior and interior, how large the infestation is, and how long the pest has been there. Not only will it save you a headache from dealing with a potential infestation, getting a pest inspection conducted early on will let you know you’re investing in a pest-free home.

8) Lead-based paint inspection

Older homes built before 1978 – and even some after – could contain lead-based paint and are highly recommended to be tested by a trained professional. Even low levels of lead-based paint may cause health issues and can be hazardous if you’re buying a home with young children. A specialist will check for peeling or chipped paint around the house and collect samples to be tested in a lab for the presence of lead.  

9) Plumbing inspection

A plumbing emergency is never convenient. To prevent issues like a sewer backup or a failing water heater from becoming a homeowner’s nightmare, investing in a plumbing inspection before making the down payment can bring underlying issues to light. A professional will either conduct a visual inspection or use a diagnostic camera to verify that fixtures and appliances are installed properly and check for signs of water damage under or behind appliances. 

10) Septic inspection

Like plumbing emergencies, a malfunctioning septic system can spell costly repairs (and unpleasant odors) if not caught before you’re under contract. A trained professional will locate and assess the septic tank, sludge layer, and absorption area to ensure all components are in working order and that the tank is the right size for the home. You definitely wouldn’t want to buy a home with a failed septic system, so consider a septic inspection if you’re buying a home with a septic tank.

11) Radon inspection

If you’re looking for your future home in regions where basements are common, requesting a radon test as part of the home’s overall inspection can help bring you peace of mind. Nearly 1 out of every 5 homes in the United States has elevated radon levels, and the EPA recommends that all houses be tested for radon levels during the point of sale. In most cases, you can request the seller’s previous radon test results as part of the home inspection and use that as a point of comparison. 

12) Asbestos inspection

If you’re buying a home that was built before 1975, there’s a chance asbestos may be present in one or more of its construction materials. An asbestos inspection should be conducted by a certified asbestos removal company. Keep in mind that while asbestos tests take time, the entire home is inspected to ensure no asbestos-containing materials remain in the home you want to purchase. If the inspector recommends a removal, make sure this is addressed before signing off on the contract.

13) Pool or spa inspection

A pool is a great outdoor amenity, but not inspecting the pool’s structure and equipment systems, such as its pumps, heaters, and filters, could cause many problems down the road. Beyond being leak-free and solid, the pool’s plumbing system needs to be inspected to ensure the water is draining properly, and that the safety covers and hardware are sufficient to secure the pool when not in use.

14) Soil stability inspection

The state of the soil around the property can play an important role in determining if the home’s foundation adequately supports the soil that surrounds it. After all, you don’t want part of the hill your future home is sitting on to slide away during a rainstorm. A soil analysis by a trained professional can help prepare you for the potential issues of hillside living and will test for the probability of erosion, gillies, or mudflows due to the soil shifting. 

15) Foundation inspection

Whether you’re a seasoned or first-time homebuyer, a foundation inspection can easily be overlooked when going through the types of home inspections you should consider. Large cracks in the exterior and interior walls, uneven floors, gaps between walls and the ceiling, or even doors that won’t close properly are potential warning signs that there may be bigger foundational issues that have gone unnoticed. A structural engineer can identify these problems, and you may be able to bring these up to the seller to fix during negotiations – saving you time and money by preventing the conditions from worsening. 

“A foundation inspection is crucial in telling the story of a house,” says Dave Tague of Tague Home & Property Inspections. “An issue with the foundation will affect the structure above it. There will likely be angled cracking above doors and windows, and even the brick veneer on the outside of certain homes. Doors may rub and not close correctly. Supporting structures in the attic may show signs of foundation movement. A complete home inspection is always a good investment, but it all starts with the foundation.”

16) Crawl space inspection

Homes with crawl spaces in areas where there’s high humidity, like Seattle, WA, should be strong contenders for a crawl space inspection. As moisture condensates on surfaces in the crawl space, mold, wood rot, and even termite infestations can occur due to the space becoming increasingly humid. A professional will identify signs of a rotting crawl space and save you from making a costly mistake.

“It’s imperative this space is inspected,” says Richard Gaines of San Diego’s Home Inspector. “Issues such as cracked foundation walls, plumbing leaks, old electrical wiring, mold…health and safety are my main concern and all these issues directly affect the health and safety of the home and its occupants.”

17) Phase inspections

Phase inspections are a crucial aspect of the construction process for new houses. These inspections are conducted at various stages of construction, typically encompassing three key phases: pre-drywall, pre-closing, and final inspections. Phase inspections for new houses are vital to guarantee the quality and safety of the construction, providing homeowners with peace of mind and assurance that their new home meets all necessary requirements.

“Phase inspections are like checkpoints in a construction video game,” says Didya Bianchi of Bianchi Home Inspections. “By getting inspections during each phase, such as foundation, framing, and final inspections, you’ll catch any glitches or construction snafus before they become full-blown disasters.” 

18) Sewer inspections

Sewer inspections play a crucial role in ensuring the functionality and integrity of the sewer system in new homes. These inspections involve a comprehensive assessment of the sewer lines and components to identify any potential issues or defects. 

“Sewer line maintenance is often overlooked yet can be extremely expensive to repair or replace,” says Amanda Ables of Noble Property Inspections. “A sewer scope is a visual examination into the plumbing and sewer systems to identify any defects or damage. Common problems discovered during a sewer scope can include breakage, leaks, bellying, collapsing and clogs of the sewer lines.”

By conducting sewer inspections before the purchase or occupancy of a new home, potential buyers or homeowners can uncover any hidden sewer issues that may require immediate attention or future maintenance. Early detection of problems through sewer inspections helps prevent costly repairs and ensures a smooth and uninterrupted wastewater disposal system in the new home.

Are these different types of home inspections worth the investment?

While they could add up in costs and time, specialized home inspections can give you peace of mind in the long run. “Just like a good lawyer can save you thousands down the road, a thorough home inspection can save you the heartache of unexpected repairs and replacements,” says Kyler Piedra of Kore Home Inspections. “A home inspection helps mitigate your risk and inform your purchase decision.”

“While waiving a home inspection may provide a competitive advantage in a competitive housing market, it can also expose you to significant risks,” adds Stephen Roberts of Boston Light Home Inspections. “Without a professional inspection, you might miss important information about the property, which could lead to unforeseen expenses or potential safety hazards down the line.” These types of home inspections help reveal problems in-depth that a general home inspection might only highlight as a possible issue. You can notify the current owners as soon as possible to get the repairs underway in case you want to continue with the home purchase. Addressing these issues early on in the home buying process is key to saving you money down the road.

Additionally, inspections can give you an upper hand when negotiating a sale. “Buying a home is probably the most significant investment you will make,” says Jeff Longaker of Inspect Pro LLC. “Protecting it is critical. A home inspection is an essential step in the home buying process. The inspection can uncover vital information about the house’s condition, so you are making an informed decision.  Having a home inspection empowers the buyers to negotiate in certain market conditions.”

Source: redfin.com

Apache is functioning normally

It’s time for another mortgage review, this time we’ll take a hard look at “New American Funding” to see if they should be included in your home loan search.

They call themselves a family-owned business dedicated to helping other families improve their quality of life.

That sounds like they have your best intentions in mind, especially when navigating what is arguably one of the biggest life decisions, buying a home.

New American also refers to themselves as the “largest Hispanic-owned mortgage company in the United States.”

And their mission is to increase lending to underserved communities, including Black and Latino borrowers. Let’s find out more about them.

New American Funding Fast Facts

  • Retail direct-to-consumer mortgage company with 180 branches nationwide
  • Launched in 2003, headquartered in Tustin, California (Orange County)
  • Started by husband and wife team Rick and Patty Arvielo
  • Originally a 40-employee call center, workforce now close to 5,000
  • Offers home purchase financing and refinance loans
  • Licensed to do business in all states except Hawaii
  • Funded $31.5 billion in home loans during 2021 (nearly a top-25 lender nationally)
  • Services more than 200,000 loans worth approximately $54 billion
  • Ranked #1 loan servicer by J.D. Power in the 2022 study

New American Funding got started back in 2003, which was around the time the housing market was booming.

Just a few short years later, the subprime mortgage crisis hit, and hundreds of lenders didn’t survive.

So I suppose that’s a testament to the resolve of New American Funding, which is a DBA of parent company Broker Solutions, Inc.

Despite being a young company at the time, they were able to get through the Great Recession and become a mortgage powerhouse just a decade later.

As noted, they are a family company, with husband and wife team Rick and Patty Arvielo the founders. Rick is currently CEO, while Patty is the president.

The direct lender is based out of Tustin, California, which is in the heart of Orange County, home to scores of mortgage lenders and related real estate companies.

The pair grew New American Funding from a 40-employee call center into one of the largest mortgage lenders in the country in less than 20 years.

Today, they count 4,700 individuals as employees, have nearly 200 branches nationwide, and maintain a loan servicing portfolio consisting of over 200,000 loans worth about $54 billion.

Last year, the company funded more than $30 billion in home loans, which puts them very close to the top-25 mortgage lenders nationally.

Roughly two-thirds of their business consisted of refinance loans, with the remainder home purchase loans.

Note: They do not lend in the state of Hawaii at this time.

New American Is the #1 Hispanic Mortgage Lender

As noted, New American is on a mission to increase homeownership for underserved communities, especially Black and Latino borrowers.

Last year, 36% of their home purchase loans went to minority borrowers, compared to just 25.5% for all lending institutions, based on 2020 HMDA data.

They are also the #1 lender to Hispanic borrowers, with a larger percentage of their loans going to Hispanic borrowers versus any other lender in the top-25.

Additionally, their share of purchase lending to Black borrowers was 85% higher than the industry average, a result of their “New American Dream” initiative launched in 2016.

They are also committed to lending $25 billion in new mortgages to Hispanic borrowers by the year 2024, and $20 billion to Black borrowers over the next seven years.

When it comes to diversity at the company itself, 23% of the company’s workforce is Hispanic, 45% of the company’s employees are minorities, and 60% are women.

What Loan Types Does New American Funding Offer?

  • Home purchase financing
  • Home renovation loans
  • Refinance loans: rate and term refi, cash out refi, and streamline refis
  • Conventional loans: Conforming and jumbo
  • Government loans: FHA, VA, and USDA loans
  • ARMs: 5/1, 7/1, 10/1 varieties
  • Fixed mortgages: 30-year and 15-year options
  • Choose your own term mortgages
  • Renovation loans and Energy Efficient loans
  • Non-QM loans (self-employed borrowers)
  • Interest-only mortgages
  • HELOCs
  • Buydown Loans (such as a 3-2-1- buydown)

One great thing about New American Funding is that you can get pretty much any type of home loan under the sun.

This includes home purchase loans, home renovation loans, rate and term refinances, cash out refinances, and streamline refinances.

They are a Fannie Mae, Freddie Mac, and Ginnie Mae direct lender, seller, and servicer, so they’ve got all the conforming and government loan options you can think of.

That includes the usual suspects like conforming mortgages, FHA loans, USDA loans, and VA loans. But that’s not all.

They also offer interest-only mortgages, jumbo loans, non-QM loans, reverse mortgages, and some proprietary offerings like the “I CAN Mortgage.”

So what is an I CAN Mortgage you ask? Well, it’s simply a choose your own term mortgage, that allows for custom terms ranging from 8 to 30 Years.

For example, if you’re 7 years into a 30-year fixed and want to refinance your mortgage to take advantage of today’s low mortgage rates, you could go with a 23-year term instead of restarting the clock.

This also works for new purchases, so you can just start with a 24-year fixed instead of the standard 30-year fixed to save some dough and own more of your home sooner.

Their so-called Self Employed Mortgage, which may be considered non-QM, allows for the use of bank statements, asset depletion, or just one-year of tax returns to qualify.

They also offer HELOCs, including fixed-rate, adjustable, and hybrid options for those looking to tap equity, along with renovation loans such as the FHA 203k refinance loan and Fannie Mae Homestyle.

New American also operates both a builder and real estate lending division, so they may be a good fit for someone buying a brand-new home or building a home (new construction).

Lastly, they offer Energy Efficient Loans for those looking to finance a home that is already energy-efficient or to make an existing property simply greener.

Pathway to Homeownership Initiative

In February 2023, NAF launched its “Pathway to Homeownership” initiative to help customers purchase their first home in designated areas throughout the country.

It provides up to $8,000 in assistance that can be used for down payment or other closing costs. And best of all it doesn’t need to be paid back.

There are no income limitations, and it can be combined with other down payment assistance programs.

To qualify for Pathway, you must be a first-time home buyer with a minimum credit score of 620. And the property must be a one-unit, single-family home.

Down payments as low as 3% are acceptable. Be sure to inquire with your NAF loan officer to determine if you’re eligible.

NAF also recently partnered with Uqual, “a full-service loan readiness company,” to help prospective home buyers make the leap from renting.

It seeks to turn a loan denial into an approval by improving an applicant’s credit, lowering their debt, and increasing their savings.

Those who complete the loan readiness program and use NAF for their mortgage needs are eligible for a $500 lender credit.

Exclusive Mortgage Provider for Patch

In late February 2023, New American Funding announced that it became the exclusive mortgage provider for “hyper-local news” website Patch.

The partnership will result in NAF placements on the mortgage and real estate hub on each of Patch’s community websites.

And the lender will feature in Patch’s weekly newsletters in over 1,200 communities nationwide.

The link up makes sense because NAF is licensed in all 50 states and has loan officers located throughout the country.

Applying for a Mortgage with New American Funding

  • They have a short form you can fill out on their website to get started
  • Then a loan officer will call you to go over your loan scenario and options
  • You can also call them directly or use their branch/loan officer directory to find someone specific in your area
  • Loan process appears to be somewhat digital, allowing for document uploading and loan tracking online

New American Funding a direct-to-consumer retail mortgage lender, meaning you work directly with the company to close your loan.

At one time, they ran a wholesale division, but chose to close it in 2016 to focus on their growing retail operations.

They say you can get pre-approved for a mortgage in as little as 24-48 hours, which is a bit slower than some fully digital lenders that can do the same in minutes, such as Rocket Mortgage or Better Mortgage.

But they do offer the ability to apply online or over the phone. If you get started via the website, you basically fill out what amounts to be a lead form. Then someone will contact you by phone.

You can also look up specific loan officers via the branch directory on their website if you want to ensure you get someone local and highly recommended.

Once your loan is submitted, they offer a digital process that includes uploading necessary loan documentation, along with the ability to track your loan progress online via the borrower portal.

You also get a dedicated loan officer that will help you along the way, which differs from some of the startups that only provide assistance as needed.

New American Funding’s Mortgage Rates

I’m all about transparency, and fortunately New American is too when it comes to their mortgage rates.

They openly advertise them right on their website for all to see. You can check rates daily for the 30-year fixed, 15-year fixed, FHA 30-year fixed, and VA 30-year fixed.

It should be noted that their rate assumptions are very tough, calling for a 740+ FICO score, 60% LTV, primary residence, with up to one discount point on their standard 30-year fixed mortgage.

In other words, if you have a lower credit score, less equity in your home, need cash out, or don’t occupy the property, the interest rate could be substantially higher.

The good news is their advertised rates appear to be quite low, so if you are a good borrower, they might be quite competitive.

As always, take the time to check out the rates of other lenders to ensure you do your due diligence.

In terms of lender fees, it’s unclear if they charge a loan origination fee or separate fees for underwriting and processing. Be sure to inquire when speaking with your loan officer.

New American Funding 14 Business Day Close Guarantee

If you happen to be buying a home, the company has a “14 Business Day Close Guarantee” to ensure you get to the finish line quickly, especially in a competitive market.

They say they have industry leading turn times because they’re an “all-inclusive mortgage banker.”

Their operations staff, including loan underwriters, doc drawers and funders, work under one roof, enabling them to close loans fast.

They offer 24-hour credit approval by senior underwriters and 24-hour underwriting turn times on conditions.

The 14-day window begins when your initial application package is complete and you have authorized credit card payment for your home appraisal.

If they fail to perform as agreed, a credit of $250 will be applied toward closing costs. While it’s not much money, the fact that they can close purchase loans in just two weeks is pretty attractive.

New American Funding and EasyKnock

In late January 2023, New American Funding and EasyKnock announced partnership “to offer innovative solutions to underserved communities.”

It’s unclear exactly what those solutions are, but my assumption is that the lender will offer home loan programs to EasyKnock customers.

These will allow borrowers ” to access their home equity through credible and non-traditional means,” which in turn helps keep them in their local communities and schools.

This tells me it might be a home equity product, such as a HELOC.

EasyKnock allows homeowners to sell to EasyKnock but remain in the properties as renters.

New American Funding Reviews

New American has a 4.87-star rating out of 5 on Experience.com from around 180,000 reviews.

Yes, nearly 200,000 customer reviews and a near-perfect rating. That’s truly impressive.

They also have a 4.91-star rating out of a possible 5 on Zillow from 8,500+ customer reviews.

Many of their reviews on Zillow indicate a lower interest rate and/or lower closing costs than expected.

Similarly, they have a 4.9/5 rating on LendingTree from nearly 60,000 reviews, with 99% of customers saying they’d recommend them to others.

Lastly, the company boasts an A+ Better Business Bureau rating and has been accredited since 2004.

So they appear to be very well-liked, though experiences can always vary based on individual circumstances, especially at a large company.

Tip: You can view the ratings of specific loan officers near you if you go the branches tab on their website, select a location, then scroll down to “Meet the Team.”

This allows you to see the staff who work in a particular office, along with their individual ratings as loan officers.

If you like what you see, you can apply for a home loan directly with that individual, or simply get in touch if you have questions.

Pros and Cons of New American Funding

The Good:

  • Offer virtually every home loan type imaginable including reverse mortgages and HELOCs
  • Can select your loan officer from an online directory and/or visit a physical branch
  • Direct lender, seller, and loan servicer with quick turn times and fast closings
  • Appear to offer competitive mortgage rates
  • Excellent customer reviews across all ratings websites
  • A+ BBB rating, accredited company since 2004
  • 14 Business Day Close Guarantee for home purchase loans
  • Can manage your funded loan with the New American Funding My Mortgage App
  • They service their own loans instead of transferring them
  • Free mortgage calculators, mortgage glossary, and market update on their website

Potential Bad:

  • You must speak to a loan officer before you can apply
  • Not available in Hawaii

New American Funding vs. AmeriSave

AmeriSave New American Funding
Digital application Yes Yes
Branch locations No Yes
Loan types offered Conventional, FHA, USDA, VA, jumbo Conventional, FHA, USDA, VA, jumbo, reverse, HELOC
Minimum FICO score 600 580
Application fee n/a n/a
Will service your loan? Yes Yes
Loyalty program No Yes
Licensed to do business in… 49 states and D.C. All 50 states and D.C.
BBB rating A+ A+
Zillow rating 4.68/5 from 2,400 reviews 4.91/5 from 8,800 reviews

(photo: Cristian Ramírez)

Source: thetruthaboutmortgage.com

Apache is functioning normally

With its rich history, vibrant cultural scene, and warm Southern hospitality, Birmingham, Alabama is a great place to call home. Whether you’re moving to Birmingham or are a Birmingham resident, then you may be considering if you want to rent versus buy a home in the area. Even in today’s real estate market, there are pros and cons to consider if you’re renting or buying a home in Birmingham, making it that much harder to decide what fits your goals. 

If you’re considering buying a home in Birmingham, it’s important to know the median sale price for a home is $255,000. The average rent for a 1-bedroom apartment in Birmingham is $1,060 and $1,300 for a 2-bedroom apartment. For many residents of Birmingham, this means it may cost less to rent a home than buy a home in today’s market. It’s important to know that there may be a variety of reasons why buying a home may be best for you this year.

At the end of the day, the decision between renting or buying a home in Birmingham is personal and depends on many factors. Whether that’s having flexibility in where you live or your financial goals, there are numerous factors that can help you make the decision. We’ll guide you along the way as you decide between renting vs buying in Birmingham. That way, you can determine the right option that best meets your goals. 

Advantages of buying a home in Birmingham

Affordability

One of the main advantages to buying a home in Birmingham is that home prices are affordable right now, especially compared to other markets. In 2022, the average home price was around $300,000 and today the median sale price is around $255,000. The area offers competitive salaries and relatively low living costs, too. Greater Birmingham consistently ranks among America’s most desirable places to work and earn a living. There are several factors that make Birmingham a favorable place for property investors too, such as its affordable home values, passive income potential, and overall market stability over the last few years.

Building equity

Owning a home provides a unique opportunity to build equity over time. Equity represents the difference between the market value of your property and the remaining balance on your mortgage. As you make regular mortgage payments, a portion goes towards reducing the principal amount owed, effectively increasing your equity. Additionally, as property values typically appreciate over the long term, your home’s market value can increase, further bolstering your equity. 

Stable monthly payments

One of the biggest advantages to buying a home in Birmingham with a fixed-rate mortgage is that you’ll have the same monthly mortgage payment throughout the duration of your mortgage. Although your other monthly expenses may vary, your mortgage payments will remain the same, providing you peace of mind and stability.

Disadvantages of buying a home in Birmingham

Lower supply of move-in ready homes

There are several areas around Birmingham where most of the homes are older and have not been well maintained or are distressed. So, if you’re looking for a new construction or move-in ready home, you won’t necessarily find what you’re looking for in every neighborhood of Birmingham. 

Maintenance costs

With homeownership comes the added responsibility of maintaining your home and property. Regular maintenance duties, such as cleaning, landscaping, and minor repairs, help ensure the longevity and functionality of the home. Additionally, periodic inspections and maintenance of systems like HVAC, plumbing, and electrical are essential for their proper operation and to prevent potential issues. While some maintenance tasks can be handled through DIY efforts, others may require professional assistance, leading to additional costs.

Large upfront costs

Keep in mind that there are more costs associated with buying a home than just the down payment. When saving up to buy a home in Birmingham, you’ll need to factor in additional costs such as closing costs, home inspection fees, and appraisal fees. But by diligently planning, exploring available assistance programs, and relying on the expertise of your agent, you might find that your dream of becoming a homeowner can happen sooner than you initially thought.

Determining if you are ready to buy a house in Birmingham

Whether or not you’re ready to buy a home in Birmingham depends on a variety of factors. Below are some of the key factors for you to consider to decide if it’s a good time for you to buy a home:

  1. Financial stability: Before you begin your homebuying journey, it’s important to have a good credit score and a stable income. Make sure you set aside some additional funds for down payment, closing costs, and additional expenses that go into the homebuying process. You’ll also want to build an emergency fund in case of any unanticipated expenses. 
  2. Housing market conditions: The housing market in Birmingham is somewhat competitive, so it’s important to know how much you can afford in today’s market.  
  3. Long term commitment: Buying a home is a more significant time and financial investment, unlike renting. So, if you’re not sure you’ll be living in Birmingham for more than a few years, it may be better to continue renting vs buying a home.
  4. Personal goals: Finally, you’ll want to assess your priorities and discuss your personal goals before making the step into the homebuying process. Are you looking for a home with certain amenities – a pool, chef’s kitchen, indoor-outdoor living space? Do you want to be close to public transit or something further from the city? Determine what’s important to you during your home search and if buying a home meets those goals.

If you’re undecided on whether now is the right time to buy, consider speaking with a real estate agent or your financial advisor to understand your options.

Is it competitive to buy a home in Birmingham?

The Birmingham housing market is currently somewhat competitive. Some properties that are move-in ready and well maintained are still getting multiple offers, and this is where most of the competition is. On average, homes in Birmingham are selling within 41 days and for about 2% below list price.

Advantages of renting a home in Birmingham

Flexibility

One advantage of renting vs buying a home is that one can move or relocate relatively easier and faster than if they own a home. When a renter’s lease is up, they can easily pick up and move to another neighborhood or city, whereas homeowners may not have this luxury.

Less expenses

Another advantage is not having to pay for homeowners insurance, which can be costly. In comparison, renter’s insurance is very affordable. Renters also don’t have to account for potential HOA dues or maintenance costs, which are typically the landlord’s responsibility. 

Lower upfront costs

When renting a home in Birmingham, there are two upfront costs to keep in mind: first month’s rent and a security deposit. Sometimes a landlord may require last month’s rent, but this can vary. In comparison to the upfront costs associated with buying a home, these tend to be much lower.

Disadvantages of renting a home in Birmingham

Rent increases

Rent prices have been steadily increasing at higher rates than interest rates in Birmingham. Depending on your rental agreement, your landlord could increase your monthly rent when it comes time to renew your lease. 

Not building equity

Another very important disadvantage of renting vs buying to consider is that the individual is not gaining any equity when they’re paying rent rather than a mortgage. Renting requires making regular payments to the landlord, but these payments do not directly contribute to building equity or financial security; rather, they solely grant you the use of a living space without any long-term financial benefits.

Less freedom of the living space

Whether you’re renting an apartment or a home, your ability to personalize your living space is limited since you’re living in someone else’s space. For example, you might not have the ability to paint walls or cabinets, install new finishes, or make permanent improvements without the approval of your landlord. On the other hand, a homeowner has the freedom to make minor cosmetic changes or take on larger improvement projects.

Renting vs buying in Birmingham: A real estate agent’s final thoughts

In my opinion, it ‘s always a good time to buy in any market as long as you find the right property and are in the financial situation to do so.

Whether you choose to rent or buy, the Birmingham area is an amazing place to call home. If you’re just starting the homebuying process, make sure you’ve done a thorough look into your finances to understand what you can afford now and in the future. Be sure to  estimate your mortgage payment with an online mortgage calculator and see what homes fit your budget with a home affordability calculator.

Source: redfin.com

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Home to fabulous live music, acres of outdoor recreation, and an unmistakably eclectic vibe, Austin is an amazing place to live. If you’re considering moving to Austin, then you may be wondering whether to rent versus buy a home in the area. With Austin’s real estate market conditions, there are pros and cons to both sides of the debate, making it that much harder to decide between renting or buying a home.

If you’re looking to buy a home in Austin, the current median sale price for a home is $468,000 as of July. According to a new Redfin study, the average rent price in Austin is $2,951, while the estimated median monthly mortgage cost is $3,801. For many, this means that renting a home costs less than buying a home in today’s market. However, there are still plenty of reasons why buying a home may be the right choice for you this year. 

At the end of the day, making the decision between buying a house or renting an apartment in Austin depends on a variety of factors. From financial benefits and long-term plans to flexibility and what Austin neighborhood you want to live in, there are plenty of factors to consider. We’ll help guide you through the debate of renting vs buying in Austin so you can make the best decision for your goals.

Advantages of buying a home in Austin

Decreased competition

One of the main advantages of buying a home in Austin today versus possibly next year, is that competition is down. As interest rates have increased, investors and those without a real need to buy a home have left the housing market, easing the competition for other homebuyers. Less competition gives potential homebuyers more of an opportunity to find a home they love rather than just finding somewhere to live and having to compromise on location or size. 

Rising home values

Homes in Austin have gone up in value every year since 2010 and currently show no signs of stopping. If you rent for a year, and wait to buy, you’ll most likely be dealing with more competition and higher home costs. Buying gives you the opportunity to create equity you can use later, to move up, to make updates, or just to create wealth. 

Stable monthly payments

Buying a home with a fixed-rate mortgage means that your monthly mortgage payments stay the same over the duration of your mortgage. While other monthly expenses may fluctuate, you’ll have peace of mind that your mortgage payments will stay stable.

Tax benefits

As a homeowner, you can receive tax benefits under the US tax code. This means that if you file an itemized tax return (rather than taking the standard deduction) you may be eligible for certain tax deductions. You may also be eligible for exclusions as a homeowner. Here are a few of the tax benefits of homeownership.

  1. Mortgage interest deduction: If you’re a homeowner with a mortgage, you can typically deduct the interest you’ve paid on a mortgage on your tax return – subject to limitations. 
  2. Capital gains exclusion: When you buy a home, chances are the time will come when you decide to sell your house. If you sell your home, you may be eligible for a capital gains exclusion. A capital gains tax exemption means that a portion of the profit you make from selling your home may be exempt from federal income tax. This is often up to $250,000 if you’re single or $500,000 if you’re married filing jointly.

Keep in mind that tax laws can change over time and tax benefits accessible to homeowners depend on your individual circumstances. It’s important to consult with your tax professional to understand what tax benefits may apply to you.

Disadvantages of buying a home in Austin

Home maintenance

While it isn’t specific to Austin, one of the most common disadvantages of owning a home is maintenance. For example, you’ll have to spend your free time managing lawn care and other small items in your home, or pay to have someone maintain them for you. 

Competition for move-in ready homes

Another disadvantage is competition, specifically for move-in-ready homes. If you want a home that’s 100% move-in-ready and updated with the latest features and trends, you’ll most likely have a multiple offer situation where you may have to give away some of your contingencies or pay more than the market price. 

Large upfront costs

If you’re looking at your finances, it’s important to remember that buying a home costs more than just the down payment. You’ll need to factor other costs into the equation such as closing costs, home inspection fees, and appraisals, when determining how much house you can afford. 

Reach out to a few mortgage lenders to get a pre-approval so you can gain insight into your financing options and other costs you may need to consider. With the right planning, exploring downpayment and closing cost assistance programs, and the support of your real estate agent, you may find out now is the right time to buy your first home.

Additional monthly payments

While your mortgage payment remains the same from month-to-month, there are other recurring payments you may need to factor into your budget as a new homeowner. Let’s look at some of these expenses:

  1. Utility costs: While many renters are used to paying utility bills such as water, heating and air conditioning, sewer, garbage, and internet, among others, sometimes these costs were included in your monthly rental payments. As a homeowner, you’re responsible for these costs each month, so it’s important to budget these additional expenses into your monthly budget. In Austin, the average monthly energy bill costs around $156. A cost of living calculator can also help you get an idea of how much to set aside each month.
  2. Insurance and property taxes: At closing, you’ll pay a portion of your property taxes as well as homeowners insurance. However, these are recurring costs that you’ll pay as long as you own the home. Keep in mind that property taxes can change due to your home’s location, value, and additional changes in the tax code. 
  3. Homeowners association fees: While this cost may not apply to everyone, if you purchase a property that belongs to a homeowners association (HOA), you’ll likely pay monthly dues. These costs can vary widely, from $100 to over $1,000, and typically cover the cost of neighborhood maintenance. 

Determining if you are ready to buy a house in Austin

Deciding if buying a house in Austin is right for your goals can be a complex decision. It often requires careful consideration of many factors. Here are some of the key factors to consider when determining if now is the right time to buy a home:

  1. Financial stability: Before starting your homebuying journey, it’s important to have a stable income and a good credit score. You’ll also need to have some additional funds saved for a down payment, closing costs, home insurance, and other expenses that go into buying a home. It’s also a good idea to build an emergency fund in case you have any unexpected expenses.
  2. Long term commitment: Compared to renting, buying a home is a significant investment – both financially and over time. If you’re not planning to stay in Austin for a longer period of time, it may be a better idea to continue renting until you’re ready to stay in the area long term.
  3. Housing market conditions: Austin’s housing market is somewhat competitive, so it’s important to know today’s market conditions – and what you can afford. 
  4. Personal goals: Lastly, you’ll want to consider your own personal goals and evaluate your priorities before making a decision to buy a home. Are you looking for more space or a big backyard? Do you want a new construction home or an older property with character? Decide what’s important to you in the home search and if buying a home in Austin aligns with your goals.

If you’re unsure whether you’re ready to buy, consider consulting with your real estate or financial advisor to fully understand your options.

Is it competitive to buy a home in Austin?

In Austin, the market is somewhat competitive, but this competition is mainly for updated homes. New construction properties in areas with higher rated schools are almost non-existent these days. As a result, you’ll find more competition on remodeled and updated homes, as well as homes in areas with high school ratings. In more competitive areas, that means you’ll likely need to pay market price or go up to 10% over market price or value. 

On the other hand, you’ll find less competition on new construction homes that are farther outside of town. There is also less competition on homes that need cosmetic updates, without any true repairs needed.

Advantages of renting a home in Austin

No maintenance costs

An advantage of renting in Austin is no maintenance costs. Your landlord will most likely take care of routine maintenance and yard work, so you don’t have to take the time to do it. If you’re relocating to Austin, it’s also important to know that home maintenance can be vastly different, especially if you’re moving from an area with a more mild climate, like Seattle or Los Angeles. 

Lower monthly payments

When renting, you can typically find a place closer to the city or a larger home, with a lower monthly payment than a new mortgage, especially with current mortgage rates. Rentals typically lag behind home values when it comes to monthly rent, meaning you may be able to find a rental home that fits your budget better.

Flexibility

Renting an apartment or home offers you more flexibility – especially if you’re not sure about living in Austin for an extended period of time. Whether you sign a year-long lease or a month-to-month lease, renting gives you additional flexibility that owning a home doesn’t. Renting gives you the opportunity to test out different Austin neighborhoods or move to another city at the end of your lease. In contrast, homeownership means you’re more committed to living in your home for at least a few years. 

Disadvantages of renting a home in Austin

Risk of rent increasing 

Depending on the type of lease or rental agreement you have, your rent could go up, increasing significantly. If you’ve signed a year-long lease, your rent won’t increase until it comes time to renew. At that point, you may face minimal to substantial rent increases. Or if you have a month-to-month lease, your landlord may increase your rent each month, leaving you with a higher rent price. 

Inability to build equity

As a renter, you’re paying into someone else’s equity and, unfortunately, not receiving anything in return. Since someone else owns the property, you aren’t eligible to receive any tax benefits or build any equity over the duration of your lease.

Limited control over design

Regardless of whether you’re renting a home or apartment, you can’t personalize the space much. If you don’t like the paint color, you’ll have to look for alternatives. Or, if your landlord allows, you may be able to paint, but when your lease ends you’ll have to repaint the space to the original color. Similarly, if you want to make any permanent changes to the layout, you’re out of luck. As a homeowner, you’ll have the freedom to make any minor or major changes to the space.

Renting vs buying in Austin: A real estate agent’s final thoughts

In my opinion, now is a great time to buy. This is the least amount of “no multiple offer situations” I’ve seen in years. You can truly get an amazing deal right now, since rates seem to have scared a lot of people off. Austin, like a lot of cities, is in a major housing crisis, and until the builders can catch up to the number of people moving here, we’ll stay in a more competitive seller’s market. 

At the end of the day, whether you rent or buy in Austin, the area is a wonderful place to call home. If you’re just beginning to think about buying a home, make sure to lay out all your finances and understand what you can afford now and in the years to come.

Source: redfin.com

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Washington, DC
CNN
 — 

The only thing consistent about mortgage rates right now is that they are volatile in the wake of mixed economic signals and recent bank failures. Mortgage rates ticked down this week, after climbing for two weeks in a row.

The 30-year fixed-rate mortgage averaged 6.39% in the week ending May 4, down from 6.43% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 5.27%.

“This week, mortgage rates inched down slightly amid recent volatility in the banking sector and commentary from the Federal Reserve on its policy outlook,” said Sam Khater, Freddie Mac’s chief economist.

“Spring is typically the busiest season for the residential housing market and, despite rates hovering in the mid-6% range, this year is no different,” he said. “Interested homebuyers are acclimating to the current rate environment, but the lack of inventory remains a primary obstacle to affordability.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

Fickle rates

Mortgage rates have been particularly fickle recently, experiencing daily fluctuations due to economic volatility and recent bank failures, said Jiayi Xu, Realtor.com economist.

The Federal Reserve announced a quarter-point rate hike on Wednesday, pushing the federal funds rate to the highest it has been in 16 years. The increase was expected, and in its statement the Fed left open the possibility for an upcoming pause in rate hikes.

“People did talk about pausing, but not so much at this meeting. There’s a sense that we’re much closer to the end of this than to the beginning,” Fed Chair Jerome Powell said during a post-meeting press conference. “If you add up all the tightening that’s going on through various channels, we feel like we’re getting close or maybe even there, but again that is going to be an ongoing assessment.”

The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

Analysts have said that recent bank failures are doing some of the Fed’s work on reducing inflation for it. The move is unlikely to have a big impact on mortgage rates, as the move was already factored in for most investors said Xu.

“The higher rates will continue to slow economic growth toward the target rate of 2%,” she said. “However, as the impacts of earlier rate increases continue to work through the economy and the recent bank failures reveal the impact of higher rates, there is a risk of the US economy entering a recession.”

Slower than usual spring housing market

This time of year is typically very brisk for home selling. But with mortgage rates still elevated and a stubbornly low inventory of homes to buy, the market is much more sluggish than usual.

“In a typical year, we would expect to see the number of homes for sale begin to increase more significantly from this point forward,” said Xu. “However, mortgage rates remain elevated, leading many sellers to report feeling ‘locked in’ by their current low mortgage rate and planning to wait until rates come down before selling, leading to fewer newly listed homes than a year ago.”

One area of the market that is seeing more activity is new construction. Facing limited inventory of existing homes, some buyers are turning to newly built homes.

Mortgage applications decreased slightly last week, according to the Mortgage Bankers Association, with refinance and purchase activity both remaining well below year-ago levels.

“While MBA expects the ongoing uncertainty in the financial markets to keep mortgage rates volatile in the weeks ahead, we still anticipate they will fall, ending the year closer to 5.5%,” said Bob Broeksmit, MBA President and CEO.

Source: cnn.com

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The U.S. Federal Reserve just gave stretched-thin homebuyers a rare break.

The Fed held interest rates steady on Wednesday, declining to jack them up higher this month in its fight to tame inflation. That’s expected to nudge mortgage interest rates down a little by year’s end, potentially saving buyers some money. (While mortgage rates are separate from the Fed’s rates, they often move in the same direction.)

“Mortgage rates have likely peaked,” says Realtor.com® Chief Economist Danielle Hale. “But we’re not going to see a sudden or sharp decline. It’s going to be gradual.”

By year’s end, mortgage rates nationally could drop to the low 6% range as long as inflation continues to slow, predicts Hale. She expects they will eventually head back down to around 5% over the next few years.

Mortgage rates averaged 6.71% for 30-year fixed-rate loans in the week ending June 8, according to Freddie Mac. They averaged 6.95% as of Wednesday, according to Mortgage News Daily. They had fallen below 3% in 2020 and 2021.

“Activity in the housing sector remains weak, largely reflecting higher mortgage rates,” Fed Chair Jerome Powell said during a Wednesday press conference. “Certainly, housing is very interest rate-sensitive, and it’s the first place, really, or one of the first places, that’s either helped by lower rates or is held back by higher rates. And we certainly saw that over the course of the last year. We now see housing putting in a bottom and maybe moving up a little bit. We’re watching that situation carefully.”

Slowing inflation likely helped the Fed decide against jacking interest rates up any further this month. In May, inflation rose 4% year over year. While inflation is roughly double the Fed’s 2% target, inflation isn’t rising as much as April’s 4.9% year-over-year jump, according to the government’s consumer price index. And it’s far below the 9.1% surge of last June.

Plus, the cost of housing, which makes up about a third of the goods and services that are used to measure inflation, is expected to come down this year. That will mostly be a result of falling rental prices, although moderating homeownership costs could also help bring inflation down as well.

The Fed also doesn’t want to put any additional pressure on the banking industry, after several banks recently failed.

“We’ve still got a ways to go, but we’ve made some substantial progress in inflation,” says Hale.

However, the Fed indicated it will likely raise rates next month if inflation doesn’t fall further and the economy continues on its hot streak. Another hike could also happen later this year.

That would likely boost mortgage rates higher than Hale originally anticipated.

“We’ll still be under 6.5%,” she says. “We just won’t get as close to 6%.”

Falling home prices could also help cash-strapped homebuyers. Nationally, the median home list price dipped for the first time year over year since Realtor.com began collecting weekly data in mid-2017. Prices slipped 0.9% for the week ending June 10, according to the most recent data.

Sellers have been forced to adjust their prices to a reality where buyers’ budgets can’t stretch quite as high anymore. Sale prices have been dropping for existing homes, which excludes new construction, since February, according to the National Association of Realtors®. Now, asking prices are catching up.

“There will be some relief,” says Hale. “The number of homes for sale is still pretty limited, so we don’t expect to see big price declines.”

Source: realtor.com

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The National Association of Home Builders (NAHB) called upon Congress to extend the first-time homebuyer tax credit after the construction of new single-family homes slowed three percent in August to a rate of 479,000 units, ending a five-month run.

“With the $8,000 first-time home buyer tax credit set to expire at the end of November, the window is now basically closed for being able to start a new home that can be completed in time for purchasers to take advantage of that,” said NAHB Chairman Joe Robson, in a press release.

“Builders are therefore pulling back on new construction at this time. Clearly Congress must act now to extend the tax credit if we are to keep the market moving toward a recovery.”

Talk about laying on the pressure for the tax credit extension; the NAHB also noted that builders continue to grapple with a “severe lack of credit for housing production loans” and “inappropriately low appraisals” tied to distressed properties.

“Both of which blunted the tax credit’s positive effect. Together, these three challenges threaten to completely stifle the upward momentum we’ve seen in the first half of 2009,” said NAHB Chief Economist David Crowe.

I would guess that the homebuyer tax credit gets extended past its current expiration date; there are simply too many interested parties with too much to lose.

Similarly, the Feds will probably continue to buy up mortgage-backed securities to keep interest rates artificially low; the appraisal issue is the only question mark.

Perhaps the builders could try lowering home prices instead of relying on “affordability” measures offered by the government; or stop building so many houses…

Source: thetruthaboutmortgage.com

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From the outside, the rows of tile-roof houses in a new community in Menifee don’t look much different from those in other subdivisions cropping up in this fast-growing city in Riverside County. But on the inside, these all-electric homes are revolutionary, offering a glimpse of the zero-emission future we should be hurtling toward to fight climate change and adapt to its effects.

All the houses in the Durango and Oak Shade at Shadow Mountain communities, two adjacent KB Home subdivisions I visited in May for an opening event, were built without natural gas hookups or appliances. Each of the 219 homes comes with rooftop solar panels, heat pumps for heating and cooling, induction cooktops and other energy-efficient electric appliances, and a smart electrical panel that manages energy use. In the garage is a battery storage system that can power the home during an outage and in the evenings when the cost of electricity from the grid is higher.

They’ll also soon be connected to a shared community battery storage facility the size of a shipping container that’s a backbone of a system known as a microgrid. It will allow residents to disconnect from the electrical grid during an outage, and use the backup power to keep their lights on for a few days.

The garage of an all-electric, solar powered home in a new KB Home subdivision in Menifee includes a battery storage system that can power the home during an outage and in the evenings when the cost of electricity from the grid is higher.

(Tony Barboza/Los Angeles Times)

I expected these homes to come with a premium price tag, given their futuristic amenities. But they start around $520,000, and a 2,900-square foot, four-bedroom, two-bath Spanish-style home recently sold for about $590,000. Buyers aren’t paying extra for technology that would otherwise cost $30,000, according to the homebuilder, because the project was subsidized by a $6.65 million U.S. Department of Energy grant.

The homes have other energy efficiency features such as spray foam insulation under the roof to help cool the attic and the living space below. The houses are essentially “like a Yeti cooler,” as one official with SunPower, the company that provided their solar and battery-storage systems, told me. That’s life changing in this corner of Riverside County where summer days often exceed 100 degrees and utility bills climb painfully high.

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After spending a few hours checking out the homes’ energy-smart features and listening to company and government officials talk up their climate-friendliness and resilience, I was almost envious. The people moving into these houses are living in a world that, for now, remains a distant reality for most Californians for whom a fossil fuel-free home is still very much a pipe dream. And it highlighted how much work there is yet to do by state officials to ensure all Californians start to benefit from home electrification as that need becomes increasingly obvious in a world altered by climate change.

Underscoring that feeling for me was a remark by a California Energy Commission official in attendance, who noted that new construction accounts for less than 1% of the state’s housing stock in any given year.

California has 14 million homes and builds only about 110,000 new housing units a year. So even if all new homes are built with at least one electric heat pump, as the Energy Commission expects, that would account for only about 8% of all homes by 2030, 14% by 2040, and 20% by 2050. That’s not anywhere near fast enough to slash climate-warming emissions, which means that most of this transition will have to happen by replacing appliances in existing homes.

For now, California remains heavily dependent on fossil fuel in daily life, especially the methane gas that powers the majority of home appliances. For most of us, the transition to zero-emission electric living will be far more complicated, messy and slow than buying a new home.

The furnaces, stoves, clothes dryers and water heaters in our homes and businesses may not seem like big polluters individually, but they all add up to a lot. Buildings are one of the biggest emissions sources in California, responsible for about 25% of its climate pollution. But California still lacks the kind of straightforward zero-emission targets for buildings that it has already adopted for other major pollution sources like electricity generation and new cars.

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A representative of Schneider Electric demonstrates a smart electrical panel during a launch event at a KB Home subdivision in Menifee on May 22.

(Tony Barboza / Los Angeles Times)

Because home appliances like furnaces and water heaters can last 15 years or longer, scaling up action over the next few years is critical if we are to get on a path to zero out greenhouse gas emissions by midcentury and avert catastrophic levels of climate change.

A recent report by Rewiring America, an electrification-focused nonprofit organization, found that to meet those climate targets the U.S. has to dramatically increase the pace of replacing fossil-fueled appliances and cars over the next three years. That would mean purchasing about 14 million more electric heat pumps, water heaters, stoves, rooftop solar systems and electric vehicles above what’s expected.

While California has some laudable goals, including Gov. Gavin Newsom’s target of installing 6 million heat pumps by 2030, state officials acknowledge that much greater numbers will be needed to put California on track to achieving a carbon-neutral economy by 2045.

State air quality regulators plan to end the sale of new gas-fueled furnaces and water heaters by 2030, and the Inflation Reduction Act and its array of consumer rebate and incentive programs should help bring down the cost of replacing them with electric heat pump models. But state leaders need to establish clear and ambitious targets for home electrification, while pursuing creative solutions such as establishing a neighborhood decarbonization program to retrofit entire low-income communities with electric appliances and infrastructure at the same time.

There are reasons for optimism, including the home construction industry’s embrace of electric technology. Heat pumps are doing particularly well, now accounting for more than 50% of the market in new construction.

But I’ve also encountered troubling stories that make me really concerned about the slow and uneven pace of change. I’ve heard from homeowners struggling to turn their houses all-electric and their travails through a thicket of contractor resistance, government red tape and other obstacles. I’ve spoken to community leaders who fear that low-income tenants and other disadvantaged groups will end up shouldering most of the burdens of electrification, like higher utility bills and rent increases landlords are likely to impose to pay for electrical upgrades. I’ve covered legal setbacks and fossil fuel industry resistance operations that are hindering the transition to healthier, gas-free homes.

At my family’s 1950s-era tract house, I want to replace the gas water heater, furnace, dryer and stove with heat pump and induction models as soon as we can afford to. But I know that will be a long, expensive journey with no shortage of complications — and electrical work.

For now, our entry point is a $100 countertop induction cooktop we’ve started to use instead of our gas burners. It boils water faster and doesn’t pollute the air, but draws so much electricity that we can’t turn on other kitchen appliances at the same time or it overloads the circuit.

Whether we rent or own or have a new or historic home, everyone should be able to live in an efficient, non-polluting and climate-ready dwelling even if it wasn’t purpose-built for an all-electric world like the new construction in Menifee. None of us should have to wait decades for that to be our reality too.

Source: latimes.com

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Efforts to loosen zoning laws that would allow factory-built homes in more jurisdictions outside the rural U.S. is also another primary focus for affordable housing advocates. 

“It’s absolutely critical that we do more urban infill, suburban new construction, subdivision development, even replacement of older homes in our cities with affordable stock,” Epperson said.

Vacant infill sites, particularly, present opportunities in many communities, thanks to existing infrastructure. 

“We love doing infill sites, lots where potentially there was a house previously because oftentimes that means that the utilities are right there in the ground,” Stott said. “Land is kind of the great scarce resource, certainly around city areas.”  

But while such opportunities already exist in some states, including California, which has rules preventing local municipalities from zoning out single-family manufactured housing, regulations and local resistance elsewhere around the country still present barriers to increasing the number of homes.

“What’s really a problem is that where there’s most opposition to new housing — tends to be infill housing in existing cities, where infrastructure is already present,” Loftin said.

And while it has the potential to provide a lower price point in many communities, there still are constraints on the extent of affordability modular and other manufactured homes can bring on large-scale projects, like subdivisions, compared to on-site, or stick-built, construction, according to Loftin. 

The primary driver of costs up in some markets is transportation, particularly when located a long distance from the factory. “You have to move that house and get to a site and site it,” which can offset the cost reduction of construction. 

“When I looked at if manufactured housing made sense in Santa Fe or Albuquerque, it never competed with stick building.”

Still, economic development is driving more cities to evaluate the possibilities of manufactured homes to serve their needs, particularly if they see potential disruption ahead in their housing markets requiring a quick boost to inventory, according to Epperson. 

“We’ve had interest from some of the Rust Belt cities for infill, especially when they get a new announcement in jobs,” she said. 

Any progress in changing local regulations should also likely lead to interest among developers to adding manufactured homes that can boost housing inventory. “Where we get interest tends to be from smaller cities, where developers can make that zoning change,” Epperson said.

Modular builders like Connect Homes are already creating strategies to tap into developer interest as it grows. 

“We’ve spent the last couple years taking everything that we’ve learned from our previous experience building for single-family homeowners in order to create a system that’s more scalable, that provides less site work on site,” Stott said. Plans also include the creation of models that “can start as small as an ADU but can quickly scale up to kind of a townhome development.”

Factory-built construction appears to have support from the federal government, with the Biden administration regularly highlighting the role it can play in his affordable housing goals. Among the president’s stated housing aims are new financing mechanisms for manufactured homes as well as the expansion of construction-to-permanent loan options to reduce the housing shortage. 

Source: nationalmortgagenews.com