new construction Archives - Page 27 of 47

Apache is functioning normally

May 17, 2023 by Brett Tams

The great pandemic mortgage refinance boom is most definitely over, but the aftershock is still rippling through the housing market. Homeowners are holding up home sales, as their ultra-low prize is too precious to give up.

During the early days of coronavirus pandemic in 2020 and 2021, mortgage rates fell sharply, and millions of homeowners jumped at the opportunity to refinance. The 30-year mortgage fell down to 2.65% in early January of 2021, according to Freddie Mac data
FMCC,
+1.90%.

The Federal Reserve Bank of New York estimated that 14 million mortgages were refinanced during the “pandemic refinancing boom.”

The surge in refinancing was, in part, due to strong household balance sheets and an increased need for housing, the New York Fed said in a blog post published Monday.

The average homeowner who refinanced saw their monthly payment drop by $220, the Fed said.

The biggest share of mortgages that were refinanced originated from 2015 onwards, the NY Fed. said. Older mortgages, such as those originated before 2010, were the least likely to be refinanced.

Homeowners most likely to refinance their mortgage owed a balance of $400,000 to $500,000 on their mortgage, the NY Fed concluded.

“The mortgage refinancing boom is over, but its impact will be seen for decades to come,” Andrew Haughwout, director of household and public policy research at the NY Fed, said in a statement.

Ultra-low rates have squeezed housing inventory

One of the biggest consequences of the refinancing boom is that would-be homebuyers today are now struggling to find homes for sale.

“The end of the most recent exceptionally low interest-rate period leaves homeowners somewhat disincentivized to sell or change properties,” the NY Fed authors noted.

In other words, homeowners aren’t keen on giving up their ultra-low mortgage rate and selling their home. Not only are rates far higher today, with the 30-year above 6%, but home prices have continued to stay elevated.

New listings — how many sellers were putting up their homes for sale — were down by 16% in early May compared to a year ago, according to Realtor.com.

(Realtor.com is operated by News Corp
NWSA,
+1.55%
subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.)

“Owners now looking to move will face increased borrowing costs and higher prices, with current home prices being more than 36% higher than they had been pre-pandemic,” the NY Fed said.

Homeowners appear reluctant to sell. Sales of previously-owned homes fell 22% year-over-year in March, according to the National Association of Realtors. New data on April home sales will be released this week.

Many buyers are turning to new builds to find good housing options. New home sales jumped 9.6% in March. One-third of housing inventory is new construction, a deviation from the historic norm of new homes being just 10% of overall housing, the National Association of Home Builders said in April.

And for the mortgage industry, business is likely to be far slower than it was during the pandemic as fewer homeowners are refinancing. The NY Fed said mortgage originations — which include refinanced mortgages — fell sharply in the first quarter of 2023 to $324 billion, the lowest level since 2014

It’s not hard to understand why few are interested in refis: The 30-year was averaging at 6.35% in mid-May, as compared to 5.3% a year ago, according to data from Freddie Mac.

The rise in rates between December 2020 and October 2022 was not just steep, it was historic: Rates rose from 2.68% in 2020 to 6.9% in 2022, the largest swing since the early 1980s, the NY Fed said, citing data from Freddie Mac.

Source: marketwatch.com

Apache is functioning normally

May 16, 2023 by Brett Tams

8 min

For years after the Great Recession, mortgage interest rates hovered at historically low levels, and home buyers became accustomed to borrowing at less than 4 percent — and sometimes less than 3 percent. But in spring 2022, rates began to rise, and once they hit 6 or even 7 percent, buyers stepped up the search for ways to reduce them.

“Buy-downs,” which reduce mortgage interest in exchange for upfront fees, quickly became popular for buyers, especially when sellers were willing to pay the upfront fees as an incentive to buyers in a slower market.

We asked Isabel Barrow, a certified financial planner with Edelman Financial Engines in Alexandria, Va., and Dan Hanson, executive director in market retail at loanDepot in Corona del Mar, Calif., for their insights into how a mortgage buy-down works and when it might be a good option. Text has been edited for clarity and space.

Q: What is a buy-down?

Hanson: Rate buy-downs allow home buyers to reduce the interest rates on a mortgage by paying points upfront. There are two types — temporary and permanent. Temporary buy-downs offer you lower interest rates for an annual predetermined period such as one, two or three years. A permanent buy-down reduces your interest rate for the full term of the loan.

Q: How does a temporary buy-down work?

Hanson: A “3-2-1” buy-down for a $400,000 mortgage at 6 percent costs approximately $18,000. Your first-year rate would be 3 percent [or down three points], second year 4 percent [down two points], third year 5 percent [down one point], and the fourth year through the remainder of your mortgage would return to 6 percent. You would save $732 per month the first year, $502 monthly the second year and $257 per month the third year.

Temporary buy-downs can be paid by the buyer, seller or a third party such as a lender. Historically, builders have paid for buy-downs as a tool for selling new construction homes, and they have been gaining popularity for sellers as the resale market continues to soften.

Costs for a temporary buy-down vary based on market conditions and the type of buy-down. Typically, one point will cost one percent of the loan amount, so if your loan is $400,000, one point would cost $4,000. For “1-0” buy-downs, you’re buying one point for one year, for “2-1” buy-downs you’re buying three points and for “3-2-1” buy-downs you’d typically buy six points. Temporary buy-downs tend to be much cheaper than a permanent buy-down.

For temporary buy-downs, you must qualify for the loan at the permanent [or final] rate of the mortgage [after the buy-down ends].

Q: How does a permanent buy-down work?

Hanson: A permanent buy-down lowers the interest rate for the entire life of the loan, so you qualify based on the final rate. Permanent buy-downs, which are available on most loans, are typically paid by the borrower, though sometimes home builders will contribute. A home buyer pays a certain number of “points” upfront to pay a lower interest rate over the life of the loan. Typically, home buyers will pay one point for a 0.25 percent reduction in their rate, but this varies based on interest rates and market conditions.

For example, on a $400,000 loan with a 7.375 percent rate, your monthly principal and interest payment would be $2,763. For approximately $8,000, you could lower your rate to 6.5 percent and save $234 per month for the entire loan term. Your $8,000 payment would be recouped in 2.7 years based on the monthly savings.

Q: What circumstances make a buy-down a good decision for a buyer?

Barrow: If you’re planning to be in the home for the long term and it’s a permanent buy-down, this can be a good decision. The longer you plan to stay in the home, the better the chances are that buying down the mortgage is financially beneficial. However, if you expect interest rates to go down in the future, you may not need a buy-down, as you’ll have the option to refinance instead down the road.

To know if a buy-down makes sense, you need to determine your break-even point, which is how long you have to hold the loan to make it worth it to pay these points. For example, if the lower rate saves you $100 per month and the cost to buy down the loan is $1,200, your break-even is one year. If you hold the loan for longer than a year, you save $100 per month for the remainder of the loan term. In this example, buying down the rate makes sense if you plan to be in the home for more than a year.

To manage the risk that rates don’t go down and you can’t refinance, a mortgage rate buy-down might be smart in terms of overall savings for the life of the loan.

Hanson: Seller- and third-party-paid temporary buy-downs can provide you with more buying power. You also get an added level of comfort knowing you’ll have more cash available in your monthly budget to cover typical expenses and some of the costs that come with owning a new home, such as new furniture and unexpected repairs.

A temporary buy-down may also make sense if you expect your income to increase over time. The buy-down allows you to pay a lower interest rate to start, then you’ll be able to afford the higher rates since your income will rise as your loan adjusts.

With a permanent buy-down, you should think about how long it will take to get to the break-even point and ask yourself if you’d rather have less cash in the bank now and a lower monthly payment or more cash in the bank and a higher payment.

Q: What are the pros and cons of a temporary rate buy-down vs. a permanent buy-down?

Barrow: With a temporary buy-down, you’re really just paying upfront in exchange for a lower payment for a couple of years. In most cases this doesn’t make sense, unless the buy-down is paid by the builder or the seller, which is more apt to happen in a buyer’s market. If you expect your income to go up during the buy-down phase, then this may make sense. My concern would be that you get into a home that you can afford initially, but once the buy-down period is over, you may be in a situation where your monthly payment is more than you can comfortably afford.

A permanent buy-down makes more sense if you plan to be in the home for a long time or you expect interest rates to stay high for the foreseeable future, meaning you won’t have an opportunity to refinance to a lower rate anytime soon.

Q: What are the downsides to a buy-down?

Barrow: The primary downside to a buy-down is the upfront cost and the lost opportunity cost. For example, if you spend $20,000 upfront to buy down your loan, what risks are you taking? What would that same $20,000 be doing if otherwise invested, and not paid upfront to the mortgage lender? Would you be investing that money for the long term, and could it earn more over the long term than you’re saving in rate adjustment? What if interest rates go lower in the future and you decide to refinance? Was it worth it to pay for the lower rate upfront when you may end up with an even lower rate option in the future?

Q: How does a buy-down compare with other options, such as making a bigger down payment or getting an adjustable-rate mortgage?

Barrow: Making a bigger down payment, especially if you can get to 20 percent, can help bring your rate down since many lenders will use that benchmark to determine your rate. You’ll also avoid paying private mortgage insurance with a 20 percent down payment. Additionally, a larger down payment has the net effect of a smaller monthly payment and less interest over the life of the loan. However, given the 30-year time, this may feel like a smaller benefit in the beginning, as it takes 30 years to feel the full benefit of the savings.

Another tempting option for buyers is an adjustable-rate mortgage (ARM). Typically, an ARM has a lower rate than the average 30-year loan for an initial period, typically three, five or seven years, and will then fluctuate with the going rate. The problem with an ARM is that typically when the rate goes up, this makes the monthly payment jump up, sometimes dramatically.

While this option may be interesting for someone with a shorter time frame in the home, I would argue buying is too costly if you plan to own for only a short period of time. And if you plan to refinance before the rate jumps up after the term, what if rates are higher than they are now? Interest rate changes are notoriously hard to predict in the short term, much less the long term. Taking that much risk on something as important as your home is likely too much for most buyers.

Apache is functioning normally

May 15, 2023 by Brett Tams

President Biden believes that everyone deserves to live in a safe and affordable home. Whether you rent or own, having a place to live that you can afford in a neighborhood with opportunities is the foundation for so much else in life.

It’s also the foundation for so much else in our economy. A lack of quality affordable housing hinders the job market and holds back economic growth by making it harder for workers to access good-paying jobs. It drives up costs for families and inflationary pressures. It also increases commutes and inefficient energy consumption, which exacerbates climate change. And a lack of affordable housing opportunities perpetuates the ongoing segregation and discrimination that our nation committed to eradicate nearly 60 years ago.

That’s why the President’s Budget includes a historic investment to lower housing costs, expand housing supply, improve access to affordable rental options and homeownership, and advance efforts to end homelessness. The Budget includes both mandatory and discretionary housing investments, totaling more than $175 billion. The Budget:

Invests in building and preserving millions of affordable homes for rent and ownership, and reducing barriers to housing production – from restrictive land use policies to practices that foster discrimination and disparate treatment in the housing market.

Makes a long-term commitment to housing accessibility and affordability for youth aging out of foster care and veterans. This support – targeted to extremely low-income populations that are vulnerable to homelessness – is a historic down payment on the President’s goal of providing universal housing vouchers for low-income households.

Invests in first-time, first-generation homebuyers who have been locked out of the generational wealth building that can be associated with homeownership by providing down payment assistance.

Provides funding to build on the Biden Administration’s unprecedented eviction prevention, diversion, and rent relief programs, advance efforts to end homelessness, and make progress towards President Biden’s goal of reducing homelessness by 25% by 2025.

Together, the Budget proposes investments and actions that will lower costsfor renters and homebuyers, make our economy stronger and more resilient, and advance equity, economic opportunity, and fair housing principles that are central to the President’s economic agenda.

Building and Preserving Affordable Housing

America faces a longstanding and nationwide shortfall in affordable housing that has been growing for decades. In May 2022, the Administration released a Housing Supply Action Plan that included administrative and legislative actions to close the housing supply shortfall in 5 years. The Administration has already delivered on many of those commitments, and will continue to build on the historic number of multifamily units under construction through additional administrative actions that: make it easier to build and preserve affordable, multifamily supply; advance the production and preservation of homes like accessory dwelling units and manufactured housing; and incentivize state and local governments to reduce barriers to affordable housing development. The President’s Budget builds on that progress and calls on Congress to:

Create A New Neighborhood Homes Tax Credit. The Budget proposes a new Neighborhood Homes Tax Credit, which would be the first tax provision to directly support building or renovating affordable homes for homeownership. At a cost of $16 billion over ten years, the credit would cover the gap between the cost of construction and the sale price for rehabilitated or newly constructed single-family homes in low-income communities, encouraging investment in homes that would otherwise be too costly or difficult to develop or rehabilitate – and spurring investment and economic activity in communities that have long suffered from disinvestment. The tax credit would be provided on the condition that the home is occupied by low- or middle-income homeowners.

Expand the Low-Income Housing Tax Credit (LIHTC). LIHTC is the largest Federal incentive for affordable housing construction and rehabilitation. The Budget invests $28 billion in expanding this tax credit in order to boost the supply of housing that is affordable for low-income renters. Specifically, the Budget permanently increases the allocation of tax credit states receive. It also reduces the private activity bond financing requirement from 50 percent to 25 percent in order to leverage more private capital into LIHTC deals and build more units of affordable housing. And it repeals the qualified contract provision and right of first refusal provision – both of which allowed some owners of LIHTC units to exit requirements to keep rents at affordable levels.

Provide New Project-Based Rental Assistance (PBRA) for ELI households. Eleven million of the 44 million renter households in the U.S. have extremely low incomes (ELI)—incomes at or below the poverty level or 30% of the area median income. Producing and preserving housing that is affordable for those households – and ensuring rents remain affordable for those households – is a critical component of tackling the Nation’s housing challenges that often requires additional subsidy. The Budget includes $7.5 billion in funding for new Project-Based Rental Assistance (PBRA) contracts, which are long-term contracts with private for-profit or non-profit owners to rent new affordable housing units. These new contracts, in combination with other low-income housing programs and incentives, will attract development capital for the creation of new affordable homes for America’s neediest families.

Reduce Barriers to the Development of Affordable Housing. The Budget includes $10 billion for planning and housing capital grants to incentivize State and local jurisdictions to expand supply and increase housing choice by reducing barriers to the development of affordable housing. The grants will help jurisdictions identify and remove barriers to affordable housing in their communities, such as restrictive zoning and burdensome permitting processes. These grants build on discretionary investments in the Budget, including $85 million for a competitive program to reward State, local, and regional jurisdictions that make progress in removing barriers to affordable housing development and $90 million to support State and local fair housing enforcement organizations and to further education, outreach, and training on rights and responsibilities under Federal fair housing laws. HUD also promotes fair housing with recent Administration actions like the proposed Affirmatively Furthering Fair Housing Rule.

Preserve Public Housing through Rehabilitation and Redevelopment. Over 1.7 million Americans live in Public Housing, and over half of households are led by seniors or people living with disabilities. The Budget includes a one-time $7.5 billion investment in funding on the mandatory side of the budget to address the capital needs of the most distressed public housing properties nationwide. Ensuring communities have the funds they need for Public Housing rehabilitation and modernization is critical to providing safe and sustainable living conditions for all – and to ensuring housing shortages aren’t exacerbated. In addition to this one-time investment, the Budget centralizes inspection-related funding for HUD-assisted multifamily properties and Public Housing, which would enhance HUD’s ability to address financial and physical risks and would complement HUD’s cutting-edge National Standards for Physical Inspection of Real Estate (NSPIRE) inspection standards. The Budget also provides $3.2 billion for Public Housing modernization and $300 million to improve the physical condition, energy efficiency, and climate resilience of the Public Housing stock. In addition, across its programs, HUD is investing in and coordinating efforts to allow for simultaneous implementation of climate resilience, carbon reduction, and mitigation and adaptation actions at the project, community and regional levels. The budget includes $752 million for targeted investments in these efforts for public and assisted housing.

Increase the Supply of Affordable Housing Financed by Existing HUD programs. The Budget provides $1.8 billion for the HOME Investment Partnerships Program (HOME), an increase of $300 million over the 2023 enacted level, to construct and rehabilitate affordable rental housing and provide homeownership opportunities. In 2022 the program helped create over 15,000 units of housing and nearly 17,000 households were assisted with tenant based rental assistance through the HOME program. In addition, the Budget provides $258 million to support 2,200 units of new permanently affordable housing specifically for the elderly and persons with disabilities, supporting the Administration’s priority to maximize independent living for people with disabilities.And the Budget provides over $1 billion to fund tribal efforts to expand affordable housing, improve housing conditions and infrastructure, and increase economic opportunities for low-income families. Of this total, $150 million would prioritize activities that advance resilience and energy efficiency in housing-related projects. The Budget also recognizes the importance of advancing modern building and energy codes in existing housing and new construction; ensuring housing is designed, built, and operated to be high performing and adapted to climate risks and natural hazards. This builds on the Administration’s efforts to secure in the Inflation Reduction Act $1 billion to create a national green-and-resilient-retrofit-program.

Reduce Housing Insecurity in Rural Communities. Affordable housing has been a long-standing problem for low-income residents in rural communities, one that is exacerbated by low energy efficiency of the aging housing stock which means higher costs to families. The Budget increases funding by 283 million above the 2023 enacted level for USDA’s multifamily housing programs. This initiative would allow the Administration to reduce rent burdens for low-income borrowers while also increasing the resiliency of rural housing to the impacts of climate change through a proposal to require energy and water efficiency improvements and green features in housing construction.

Promoting Rental Affordability and Fairness, and Making Progress Toward Universal Housing Vouchers for Extremely Low-Income Households

While around 2.3 million low-income households receive rental assistance through the Housing Choice Voucher (HCV) program, another roughly 10 million are eligible and do not receive assistance due to funding limitations and wait lists. The Administration has secured rental assistance for an additional 100,000 households through the American Rescue Plan and the 2022 and 2023 appropriations bills. And in January, the Administration announced a Blueprint for a Renters Bill of Rights, which enumerated principles to shape federal, state, and local action, and announced agency commitments to strengthen tenant protections and encourage rental affordability.

But there is more work to do. For the first time in history, the Budget includes a voucher guarantee for two population groups that are acutely vulnerable to homelessness: youth aging out of foster care and extremely low-income veterans. Between discretionary funding, program reserves, and these mandatory proposals, these vouchers would serve well over an additional 200,000 households. The President’s Budget calls on Congress to:

Expand the HCV Program and Enhance Household Mobility. The Budget provides $32.7 billion, an increase of $2.4 billion (including emergency funding) over the 2023 enacted level, to maintain services for all currently assisted families and to expand assistance to an additional 50,000 households. In addition, the Budget anticipates funding from the HCV program reserves will expand assistance to another 130,000 households. The Budget also provides $25 million for mobility-related supportive services to provide low-income families with greater options to advance true housing choice.

Create a Housing Voucher Guarantee for Extremely Low-Income Veterans. The President believes that no one should be forced to live on the street, especially not those who have served our Nation. But an estimated 450,000 veteran renter households with extremely low incomes currently receive no rental assistance and have what HUD terms “worst-case housing needs.” Over a ten-year period and at a cost of $13 billion, the Budget expands rental assistance to extremely low-income (ELI) veteran families, starting with an allocation of 50,000 targeted vouchers in 2025 and paving a path to guaranteed assistance by 2033 for all who have served the Nation and are in need.

Create a Housing Voucher Guarantee for Youth Aging out of Foster Care. Approximately 20,000 youth exit foster care annually, typically between the ages of 18 and 21, and these young people face greater obstacles to accessing and maintaining housing and as a result experience higher rates of homelessness and housing instability compared to the general population. To ensure these young people are stably housed and better able to focus on advancing their education or building a career during this difficult transition, the Budget establishes a housing voucher program for all youth aging out of foster care annually.

Making Homeownership a Reality for More First-Time and First-Generation Homebuyers

Achieving and maintaining homeownership is the primary way that American families build wealth and create economic security. That’s why the Administration implemented a series of measures that protected homeowners from foreclosure during the pandemic, including enhanced loan modifications to resolve delinquencies. In addition, the American Rescue Plan’s Homeowner Assistance Fund is helping struggling homeowners catch up on their mortgage payments and utility costs. These actions have helped keep foreclosures below pre-pandemic levels.

It’s also why just last month – as reflected in the President’s Budget – HUD, through the Federal Housing Administration (FHA), lowered its annual mortgage insurance premium. This step is projected to save homebuyers and homeowners with new FHA-insured mortgages an average of $800 per year, lowering housing costs for an estimated 850,000 homebuyers and homeowners in the first year. And it builds on steps the Administration has already taken, including changing FHA underwriting policies to allow lenders to use positive rental history in evaluating applicants’ creditworthiness for an FHA-insured mortgage, changing the way in which student loan debt is evaluated in FHA mortgage underwriting, and announcing more than 20 concrete agency actions to root out racial and ethnic bias in home valuations. In addition, the Budget reflects a reduction in mortgage insurance fees for Native American borrowers in the Indian Housing Loan Guarantee Program, which will save borrowers over $500 on average in their first year.

But there is more work to do to make the dream of homeownership attainable for more Americans, particularly first-time and first-generation homebuyers who have been locked out of the generational wealth building that can come from homeownership. That’s why the Budget calls on Congress to:

Launch a First-Generation Down Payment Assistance Program. The Budget provides $10 billion for a program to target down payment assistance to first-time homebuyers whose parents do not own a home and are at or below 120% of the area median income or 140% of the area median income in high-cost areas. Eligible activities would include costs in connection with acquisition such as down payment costs, closing costs, and costs to reduce the rates of interest on eligible mortgage payments. Analysis estimates these program parameters would mean that more than 35% of potential program participants would be African-American and more than 25% would be Latino – helping to address the stubborn racial homeownership gap that remains at pre-Fair Housing Act levels.

Increase HUD Funding for Homeownership. The Budget also includes $100 million for a down payment assistance pilot to expand homeownership opportunities for first-generation and/or low wealth first-time homebuyers and $15 million to increase the availability of FHA small balance mortgages.

Promote Homeownership in Rural America. Single-Family Housing Direct loans from USDA help low-income borrowers in rural areas realize the dream of homeownership. That said, the current program requires borrowers to repay subsidy costs, a requirement unique to rural housing. The Budget proposes eliminating this penalty, making the program consisted with other USDA subsidized interest rate programs, and promoting equity for low-income rural residents.

Advancing Efforts to Prevent Evictions and End Homelessness

During the pandemic, the Administration stood up a first-of-its-kind national eviction prevention infrastructure, which helped 8 million renter households at risk of eviction and kept evictions below pre-pandemic levels. During one of the greatest periods of economic uncertainty our Nation’s history, we did not see a spike in homelessness.

In addition, at the end of last year, President Biden set the bold goal of reducing homelessness by 25% by 2025 with the release of All In: The Federal Strategic Plan to Prevent and End Homelessness. The Administration’s roadmap is not only about getting people into housing but also ensuring that they have access to the support, services, and income that allow them to thrive. The plan focuses attention on homelessness prevention and actions to ensure an adequate and diverse stock of affordable housing, renter protections, and social service supports. The plan also seeks to promote and expand eviction-prevention reforms, including those advocated as part of the Biden Administration’s implementation of the Emergency Rental Assistance program. The Budget seeks to continue the policies that are most effective in preventing avoidable evictions and give hard pressed American families more opportunities to stay in their homes, even during hard times. The President’s Budget calls on Congress to:

Support, Solidify, and Encourage State and Local Reforms to Avoid Evictions. The Administration stood up a historic national eviction prevention infrastructure during the pandemic, helping keep eviction filings 20% below historical averages, even well after the eviction moratorium ended. The Budget provides $3 billion to build on these efforts, with a focus on upstream prevention and eviction diversion, improving renters’ access to resources, and making the legal process for renters fairer. This funding can be used to develop or implement policy reforms and program improvements such as providing emergency rental assistance or other forms and new models of rent relief, and expanding access to legal counsel, housing counselors, and court navigators.

Bolster efforts to prevent and end homelessness. To prevent and reduce homelessness, the Budget provides $3.7 billion, an increase of $116 million over the 2023 enacted level, for Homeless Assistance Grants to meet renewal needs and expand assistance to approximately 25,000 additional households, including survivors of domestic violence, dating violence, sexual assault, stalking, and human trafficking and homeless youth. These targeted resources would support the Administration’s recently released Federal Strategic Plan to End Homelessness. The Budget also provides $505 million for Housing Opportunities for Persons with AIDS, serving a population with a disproportionately high rate of homelessness and providing a critical link to services.

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Source: whitehouse.gov

Apache is functioning normally

May 15, 2023 by Brett Tams

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode continues our nerdy deep dive into how climate change will affect your money.

Check out this episode on either of these platforms:

Our take

Few people enjoy thinking about home and renters insurance — it’s admittedly not the most riveting subject. But climate change has upended the calculus involved with protecting our home and belongings from natural disasters, and many homeowners and renters are discovering this only after it’s too late. Homeowners in areas at risk for wildfire and hurricanes are finding it harder to insure their homes, while others have learned the hard way that their home and renters insurance does not cover damage from flooding.

In the second episode of our nerdy deep dive into the intersections of personal finance and climate change, NerdWallet insurance editor Caitlin Constantine talks with Nerd Holden Lewis, who covers all things housing and mortgages. They explore the impact climate change is having on home insurance markets around the United States and what that means for prospective and current homeowners. They also discuss the risks of being underinsured and how to make sure you have enough insurance to cover your home and belongings, as well as why you should consider flood insurance even if you don’t think you need it.

Caitlin also speaks with Matthew Eby, founder and CEO of First Street Foundation, a nonprofit research and technology company that has developed a tool to help homeowners better understand climate-related risks like flooding, wildfire and extreme heat. They dig into some common misconceptions about flooding risk and flood zones, as well as some strategies that homeowners can use to better assess their risk and to protect their homes from potential disaster.

More about insurance on NerdWallet:

Sean Pyles: Let’s say a freak storm is headed your way and there’s a chance it could wipe out your home. Homeowner or renter, are you covered? Are you sure?

Holden Lewis: The standard homeowners policies don’t cover floods, and that means that they don’t cover rising water. They do cover falling water. If your roof blows off and rain falls inside, they’ll cover that. But that’s just one type of under insurance that people have.

Sean Pyles: Welcome to the NerdWallet Smart Money podcast. I’m Sean Pyles.

Caitlin Constantine: And I’m Caitlin Constantine.

Sean Pyles: We’re back with episode two of our nerdy deep dive into the broad effects of climate change on our financial lives. Caitlin, I know you’re going to talk about this more in a little bit, but you’ve had your own brushes with housing disaster, right?

Caitlin Constantine: Yeah, so I’ll go into depth in this during the episode, but I lived in coastal Florida for more than 20 years. During that time, I also worked for quite some time in local news. So I’ve lived through multiple hurricanes and tropical storms, and I’ve also reported on the damage that they can cause. And I’ve actually been pretty lucky to have never lost my house, but I’ve seen firsthand how these storms can really cause a lot of chaos and destruction, and how the effects of those storms last for years long after the storm has passed.

Sean Pyles: OK, so can you tell us why we’re doing a whole episode on housing?

Caitlin Constantine: Sure. For most people, their house is their biggest expense, and for a lot of us it’s also our biggest and most valuable asset. And regardless of whether you’re renting or owning your home, it’s usually way up there on the list of things that take money out of your bank account. And the risks around climate change for homeowners are especially fraught because of insurance costs.

Sean Pyles: Right. And it can be hard to fully understand what you need to know about the kinds of coverage and policies that will help protect your assets from climate risk. And, Caitlin, I don’t know about you, but I did not get a Ph.D. in risk evaluation as part of my schooling, and I’m a homeowner.

Caitlin Constantine: And I didn’t either. Although a Ph.D. in risk evaluation might make my job a little easier sometimes.

Sean Pyles: Yeah, I imagine.

Caitlin Constantine: But honestly, sometimes it really does feel like you might need that Ph.D. because climate change is affecting so many parts of our lives, including decisions about where we choose to live. And a lot of it’s really kind of unknown, which is what leads to people having a lot of uncertainty and anxiety around these issues.

Sean Pyles: All right. Well, before we dive in, we want to remind our listeners to tell us what you think. Share your ideas, concerns and hopefully some solutions around climate change and finance with us. Leave a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD. Or email a voice memo to [email protected].

Caitlin Constantine: Yeah, I would really love to hear from people who have stories about how climate change or a natural disaster has affected how they think about homeownership and where they want to live.

OK. So our first guest is fellow Nerd, Holden Lewis. Holden covers all things housing and mortgages. Welcome back to Smart Money, Holden.

Holden Lewis: Hey, it’s a pleasure to be here.

Caitlin Constantine: So we’re here today to talk about how climate change is actively affecting the housing market here in the U.S. Clearly, we’ve all seen some of the catastrophic damage from natural disasters like flooding, fires, the tornadoes that have ripped through the Southeast this spring. But can you give us a sense of what’s happening even more broadly? And then we’ll get into some of these details.

Holden Lewis: Sure. If you could move anywhere, it would really be a good idea to consider the role of climate change in where you live, because places all over the country are affected by disasters and that they seem to be exacerbated by climate change. I live on Florida’s East Coast and climate change is at the top of my mind because of hurricanes. Experts have said that climate change makes hurricanes wetter. I think we saw that especially in 2017 when that hurricane hits Houston and just parked itself over there and flooded everything. Hurricanes are just, they’re dropping more rain. And then with sea level rise, storm surges are pushing water farther inland, but storm surge isn’t the only kind of flooding to worry about because heavy rainfall causes rivers and creeks to overflow their banks and that causes flooding. And then there’s something called pluvial flooding, which is what happens when it rains faster than the water can drain away.

But water isn’t the only problem. Because of prolonged droughts, we see more wildfires in the West. They’ve wiped out entire towns and they pollute the air enough to cause danger to people’s health. So there is a lot to consider. And despite all these issues, people are moving into these high-risk areas. We have 40% of Americans live in coastal area. People are moving to places with high and extreme heat like Austin and Phoenix. And 30% of American homes are in wildlands, technically called the Wildland Urban Interface. Those are places that are vulnerable to fires where basically houses are near the woods. So as more Americans live in high-risk areas, they’re in greater risk of losing their property or even their lives because of natural disasters.

Caitlin Constantine: You and I actually both have personal experience with this. You mentioned that you live on the East Coast of Florida. So just tell us a little bit more about this.

Holden Lewis: I’ve lived on the East Coast of Florida since 1999. We’ve been hit by a lot of hurricanes. I mean, there has been a few times when I’ve been able to sit on our front porch while a hurricane blew from the back of the house. So we’re sitting there in this sheltered area. My wife and I are watching entire sections of roof tiles just blow off of houses across the street and just kind of ply through the air like Frisbees.

In our house, we’ve been fortunate. We’ve had several direct heads and some damage to the house, but not a whole lot. The hurricanes do tend to blow down our wood fences. Our homeowners insurance policy has a windstorm rider, which has its own deductible. So you have a higher deductible for hurricane damage. We haven’t had major enough damage to bother with filing a claim, but I’ve spent a lot of hours rebuilding fences in very hot and muggy weather several times. So, Caitlin, you were on the West Coast of Florida, right? What was your experience?

Caitlin Constantine: So, yeah, as I mentioned in our last episode, I lived on the West Coast of Florida for about 20 years, and I left last year. When I lived there, that part of Florida doesn’t get as many direct hits as the East Coast does, but I’ve experienced my share of hurricanes as well. So you mentioned the 2004 hurricane season. We had, I think, four hurricanes crisscrossed the state within a six-week period. And that was actually when I realized that hurricanes were serious business and not just an excuse for a hurricane party. And Hurricane Jeanne, which was the last one, it actually ripped the roof off of my apartment building. And because so many other people had damage at the same time, it took a week just to get a tarp on the roof and it rained before that could happen. And so later that winter, I ended up dealing with mold all over my apartment. And that was not a fun experience.

And then I also went through Hurricane Irma in 2017, and that was probably more significant for us. It tore down my fence and it uprooted some really big trees in my neighborhood, and it left me in my neighborhood without power for a week. And this is in September, so it was getting up to be 90, 95 degrees inside my house. The linemen who rolled up to fix my power, they got the biggest, teariest, sweatiest hug from me that day. I was so thrilled to see them. And by the way, for the folks who are not from Florida who are listening, this is a common pastime for Floridians comparing notes on our hurricane stories. We all do this, right?

Holden Lewis: I have so many. I’ve heard so many.

Caitlin Constantine: Fortunately, like you, I never had to file claims or deal with insurance after any of these storms. But as many people are aware, home insurance costs really recently increased pretty significantly in Florida, and that’s in large part due to damage from frequent severe weather that happens there quite a bit. And so by the time I moved away last year, I was paying $5,000 a year for my home insurance. So with that, let’s talk a little bit about how the insurance picture has changed as the planet warms. So we all know that most people have to get insurance on their homes to get a mortgage, right? Talk us through what that’s for and what climate change has done to the calculations.

Holden Lewis: We tend to think of homeowners insurance as something that pays for home repairs if bad things happen, but it really helps to broaden that view and just to think of insurance as protecting your wealth and your financial stability and really your mental health.

So here’s how it works. Insurance pools risk. What that means is that you and other people each add to a big pool of money. And then when one of those people has damage, that person withdraws from that pool of money. The problem with disasters is that when they’re really big, whether they’re just huge geographically or very severe, that pool of money can end up being drained and then they’re still claimants who still need to draw from it. And that’s happening more and more because of the increasing frequency of climate-related disasters.

And insurance markets have suffered in high-risk states. Look at Florida. The insurance market has had challenges since Hurricane Andrew in 1992, and there’s just not a lot of large insurers who want to write policies in Florida these days. And so that means the rates have just been skyrocketing. Louisiana is grappling with damage from multiple hurricanes in 2020 and 2021. The state recently approved rate hikes of 60% for its insurer of last resort. And you look at California, they’re dealing with all those wildfires that are caused by prolonged drought, which maybe has ended with all the snow this year, but that’s going to cause its own problems. And homeowners who live near wild areas are being dropped by insurers.

Caitlin Constantine: So we’ve got these issues of availability that’s happening in these high-risk states, but we’re also seeing issues around under insurance. People maybe think that they’re covered and they discover that they’re not, or they don’t have the level of coverage that they need to rebuild after a disaster, or maybe they don’t fully understand what their policies cover. It’s not uncommon for people to think that their home insurance policy will cover flood damage when that’s typically not the case.

Holden Lewis: That’s true. The standard homeowners policies don’t cover floods, and that means that they don’t cover rising water. They do cover falling water. If your roof blows off and rain falls inside, they’ll cover that. But that’s just one type of under insurance that people have. One thing to consider is that inflation and the increases in the costs of labor and supplies, that means that a lot of homeowners are underinsured and they don’t know it because they have policy limits that maybe as costs rise, those policy limits aren’t going to cover all the damage that happened.

One other thing is that I hear people say, “If I’m hit by a disaster, I’ll just rely on government grants or federal loans.” Those are probably not going to be sufficient, and that help is going to be slow. So homeowners do have a few tools to help them understand their true risk. The current FEMA flood maps are based on historical data, and that doesn’t account for future climate change impacts and it doesn’t account for flooding that’s caused by extremely heavy rainfall, but it’s a place to start.

Another thing to keep in mind is that many states don’t require sellers to disclose the flood history to homeowners or home buyers. There’s almost no federal involvement in insurance regulation because insurance is regulated by each state. So nongovernment organizations like First Street Foundation are trying to fill in those gaps.

Caitlin Constantine: And that’s actually a good preview for the second half of this episode when we’ll be talking with the First Street Foundation about how people can better assess what their true climate risk is for housing in a given area. So Holden, for those listeners who are thinking that this all sounds a little bit overwhelming, which by the way is a completely understandable way to feel, can we give people some advice for things that they can do right now to protect themselves as much as possible?

Holden Lewis: Yes. The standard advice is to review your homeowners policy every year. In my mind, that’s boring, but don’t feel bad if you don’t do it that often. But really it helps to assess your coverage. And just get questions answered when it’s time to renew that policy. So what does that mean? Well, first, pay attention to the exclusions that lay out what the policy doesn’t cover. Flooding, for example, but also earthquakes and sinkholes. Those aren’t covered. Mold damage, that’s often not covered. Talk to the agent. Find out if you have enough coverage to replace the home and belongings if it’s destroyed in a disaster or even a fire. Ask about coverage for living expenses if you’re displaced and you have to live somewhere else for a while. And are there caps on that coverage? And look into extended or guaranteed replacement cost coverage.

And then there’s also inflation guards that you can have on your policy which adjust your coverage to account for inflation. Both of those are generally going to cost more, but if you can afford it, it might be worth the peace of mind. Just make sure you have additional coverage that you might need. We recommend looking into flood insurance even if you’re not in a place that’s designated a high-risk zone. Flood insurance costs less in medium- and low-risk areas, so it’s probably worth the investment. And then, finally, just think of your contributions to climate change and how you can reduce them. Look for opportunities to decrease your carbon footprint by reducing energy usage like when you replace windows where you add insulation. And consider installing solar panels.

Caitlin Constantine: These are all great ideas and great advice. And as the home insurance editor for NerdWallet, I definitely cannot emphasize the importance of looking into flood insurance enough. There’s one more thing that we also need to talk about, which is the key timing issue on all of this, especially when you’re buying a house. So a lot of potential home buyers, they don’t really think too much about insurance when they’re going through the process of buying a house. They’re focused on the price, they’re focused on getting the mortgage. And insurance is kind of treated as this minor thing to be just checked off the list before closing, but it’s really important to think about insurance from the start to make sure that you’re fully covered should the worst happen.

Holden Lewis: It’s a really, really good point. And it’s especially important if you’re moving from a different part of the country. Let’s say you live in the Midwest or the Northeast and you move to Florida or Texas. You might be shocked at how much it costs to insure the home. What that means is it’s really increasing your monthly house payment, and that might not be something that you’re thinking about when you’re just thinking about the property taxes and the principle and the interest. So get a ballpark estimate of your insurance costs. That way you can factor them into how much you can afford to pay for the house.

Caitlin Constantine: Right. That’s such a great point. I actually read an article about a couple that retired from New Jersey to Florida thinking that they would save money on taxes and insurance, and they were absolutely shocked to find out that wasn’t the case. They saved money on taxes, but what they saved was erased by how much more they were paying with insurance.

So thank you so, so much for joining us and for sharing this really important information with us today. We really appreciate you taking the time to join us.

Holden Lewis: Hey, I appreciate the opportunity.

Caitlin Constantine: So, Sean, I dearly hope that you as a homeowner are more than adequately insured based on what Holden just told us. I know you have a house on the Southwest Coast of Washington state.

Sean Pyles: Yeah, well, I can hear the waves from my house, and I’m embarrassed to say that I do not have flood insurance. But after your conversation with Holden, I’m going to be calling up my agent, I promise. But also, Caitlin, I’m maybe spiraling a little bit about how I’m supposed to evaluate the climate risk around my house.

Caitlin Constantine: OK. Well, I’m going to be following up to make sure that you get flood insurance. But also —

Sean Pyles: Thank you.

Caitlin Constantine: Very important. But also we’re going to get a little bit into how you can better evaluate climate risk around your house with a literal expert on risk assessment. So Matthew Eby is the founder and CEO of First Street Foundation. It’s a nonprofit research and technology company that is all about risk prediction in this time of climate change. It’s developed all these cool mapping technologies that model flood, fire and extreme heat risks all over the country. And those models are integrated into real estate sites like Redfin and Realtor.com, so consumers can look up properties they’re interested in and then make a judgment about future risk.

Matthew Eby, welcome to Smart Money. It is so good to have you with us today.

Matthew Eby: Yeah, thank you so much for having me.

Caitlin Constantine: All right. So we have just heard from my colleague Holden Lewis about all of the negative factors that are affecting housing as we find ourselves in this era of significant climate change. Can you talk with us a bit about what you’re seeing out there and whether it’s as discouraging as it seems?

Matthew Eby: Sure. Well, the top line is the benefit that we have today is that we have data. And so we’re able to understand things that we were not able to before at a property level. So kind of what you might experience or the likelihood, the probability of an event impacting a home. So whether that’s a wildfire or a flood or a wind event or something of that nature is now something that we can understand and plan for. So while these are not great things, it’s very helpful to know what’s happening because what gets measured can be managed, and then you can do things to take proactive steps to ensure that anything that does happen can be offset with, whether it’s a risk transfer product like insurance or whether it’s something that you can do smart with your home, whether it’s elevation or defensible space from fire or a number of other things that you can do to be proactive about it.

Caitlin Constantine: Yeah. A common theme that we’ve heard over the course of this podcast is the uncertainty is a challenge for a lot of people. So your point that we now have data, that seems like it could be something that could help mitigate that uncertainty a little bit.

Matthew Eby: Yeah, that’s exactly what we do at First Street Foundation, is we work with the world’s best scientists and modelers to create transparent and peer-reviewed models that we then turn into tools that you can access free of charge on Risk Factor. So if you go to riskfactor.com, you can actually type in an address and understand what the risk may be to your home today from winds or wildfires or floods or extreme heat, and then how that’ll change over the next 30 years. So understanding that uncertainty or those probabilities and that range of outcomes that could happen really then informs those next steps for you.

Caitlin Constantine: OK. And so when, say, somebody goes and they go to Risk Factor and they put in their address, I know that I’ve done this, I’ve recently bought a house and it gave me factors for flood, extreme heat and fire, how does somebody interpret that information that Risk Factor displays on the screen when they do that?

Matthew Eby: Well, the first thing that you’re going to see is a score from 1 to 10. One being minimal where we don’t identify risk within our models and then 10 being extreme. That score for the perils that you’re talking about is representative of a 30-year ownership period. So we don’t just look at what is the risk today, we say, “OK, if you’re going to own this home for 30 years, how likely is it that you’re going to be exposed to these things that would then be potentially consequential to you?” And so that score is a really indicative of what you need to dig further on.

So if you see one of the numbers kind of above 1, you’re going to want to click in and then know what might happen from those. So if we stick with this flooding example, say you had a flood factor of 5, you would click in and then you could understand what is the actual risk to the building. Is it likely that that water would make it inside the home and cause damage? And then you want to look at other things around, because we always talk about the home may be fine, it may be that 1 like we’re talking about, that great scenario where it’s a minimal risk and we don’t see it, but your neighborhood or your roads or the critical infrastructure in your community may be at risk. Those are all things we also show within the tool. So those scores are the great place to start to know where to dig deeper. But just because you see a 1 doesn’t mean you should also not take a peek around what might be at risk for your community overall and for those other pieces of social infrastructure, critical infrastructure or other residential properties around.

Caitlin Constantine: Right. So Risk Factor is like a starting point. We know that there’s been a lot of discussion about how difficult it can be for people to assess their risk, obviously. One other thing that we have heard as a suggestion is to just go and talk to the people in the neighborhood about their experiences while living there. Does that seem like a way that you can learn a little bit more about what your risk could potentially be?

Matthew Eby: Absolutely. One thing we are always telling folks is that a model is a model and it is not certainty. What you can actually do is look at your, as many models as possible. Or if we were talking about flooding still, talk to your local floodplain manager, talk to neighbors around what you may have seen in the past. The only difficult side with that is that won’t incorporate this idea of what’s going to happen in the future. So we know from carbon emissions to greenhouse gasses that things are getting warmer. We are able to quantify the differences of what will happen in those future scenarios and then understand how that’ll change certain events like flooding and wildfire and heat and hurricane winds and things of that nature. So while the history and the historical events are very important and helpful to know, it’s also important to take all of these pieces of information together to make a very informed decision versus just relying on one of them alone.

Caitlin Constantine: That makes a lot of sense. So we’ve just talked a little bit about where future homeowners should be thinking about when they’re shopping for a house during this time of climate change and uncertainty. Can we also talk a little bit about what you buy? For instance, if you’re buying an older house or if your home has new construction, can you share a little bit about that?

Matthew Eby: Sure. So when you are looking at your property, each one of these risks are going to have different vulnerabilities to that structure. So one thing, as you just mentioned when it was built, means the building code standards were going to be either today’s because it’s a new build or one of the past building code standards that would have different rules about how it must be constructed. And so you’re going to want to look at the age, which is then driver of the building code standard, but then also sync with things like wildfire. For a lot of the homes that are on the West Coast, what are we seeing for what’s called defensible space? So is there a bunch of shrubs around the property or trees around the property? Because that’s really the major driver of what sets so many homes to actually combust, is because fires get so close under those trees and shrubs. So there’s a mixture of not just the structure itself, but also what’s around structure.

Caitlin Constantine: As somebody who just bought a home that’s near a lot of trees, I have been paying a lot of attention to that buffer zone around my home where all the vegetation is because I know that I live in the [Wildland] Urban Interface. So let’s take a bigger picture view of this and talk about what we as housing consumers, do you think that we are actually paying enough attention to climate risk when we’re looking at and thinking about where to live?

Matthew Eby: Unfortunately, it’s not something that is part of every transaction. So there are things like the National Flood Insurance Program and the FEMA flood zones, which give you an understanding of risk from flooding as FEMA sees that. But that is a stationary view of risk. It doesn’t include how this will change in the future. It’s also dependent on when those maps are made and whether they’re even available for your area. And they miss things, like they don’t include basics like precipitation flooding, so they don’t have zones associated with just rainfall flooding, which actually causes so much damage to so many homes each year.

So there’s one issue there with kind of the government standards on flooding and how it doesn’t do that. Outside of that, there’s just not data for other things, like there’s not a data for wildfires at a property level. There’s things from the Forest Service where you can go to wildfirerisk.org and get an idea of your community risk, but it doesn’t tell you about your individual property. So those are the kind of the negatives.

The positive is that data like ours is now being integrated into Realtor.com, Redfin, these types of real estate sites or brokerages like Compass that are where people are looking for homes. So they actually, “While I’m seeing the listing, I can understand the level of risk and then make an informed decision based off of it.” So while we’re making great strides, it’s just not all the way there yet.

Caitlin Constantine: I’d like to shift gears really quick to talk about people who are already homeowners, especially people who already are in high-risk areas, like places that are already seeing rising sea levels or people that are in the [Wildland] Urban Interface where fire risk is more severe. How do you talk to people about managing their risk when they already live in these places?

Matthew Eby: Yeah, I mean, the first thing you can do is just know what your risk is. Talk to your local floodplain manager, talk to your local fire department to understand what might be at risk, what might not be. And then with that knowledge, you can start to put together a plan. Is it just your individual home that’s at risk and you need to think about adaptation, mechanisms, how do you harden your home so that it isn’t as exposed to these risks if they were to happen? Or, once you see your individual home risk, how do you collectively as a community start thinking about it? But it is a collective action that if everyone is willing to, together, do the best that they can to protect the community, you’re going to be in a much better spot than you just trying to do it as an individual.

Caitlin Constantine: So if there was just one lesson that you could have people learn and understand about the risks of owning a home in this time when the climate is changing, what would that one lesson be?

Matthew Eby: I think the thing that people get wrong all the time is probabilities, because probabilities are really hard. And so when you think of a 1 in 100 flooding event, you can’t think of it as “This will happen once every hundred years.” This is a 1% risk today. And then next year you have another 1% risk and so on and so forth. So if you think of that accumulative probability without anything to do with climate change yet, means that 1% event has a 26% chance of happening over a 30-year mortgage. So if you’re planning on living in your home for 30 years and you have a 1% risk, it’s a 1 in 4 chance that horrific event is going to happen to your property. So you have to think of it as, that is a significant amount of risk and you really need to plan like it’s going to happen.

Now, you add in climate to that and it’s 1% today and it’s growing over time. Those probabilities just compound. And so really what you need to be thinking about is cumulative risk with climate change. And so what are my actual odds of this if you’re a probability person, but really just thinking about homeownership as a length of time, not like an insurance policy where you look at risk on a year-by-year basis. Think of it as the homeowner as the period that you’re going to live in it or your whole period of it’s an investment.

Caitlin Constantine: I am really glad that you made that point because I’m not going to pretend like I’m great at math, but I know that this is an ongoing challenge for a lot of people because as you said, they hear 1 in 100, one flood out of every 100 years, and then there’s a flood and they’re like, “Cool, we’re good for the next 99 years.” And as you have —

Matthew Eby: “We’re good to go.”

Caitlin Constantine: Yeah. And as you’ve just stated, that’s actually not how probability works at all.

Matthew Eby: Yeah, exactly. Exactly. Yeah, the unfortunate part with flooding is that something like that happens, literally it could happen the next day. It’s just the lottery. You bought a lottery ticket and there’s a 1 in 100 chance of winning. You won. You buy a ticket the next day. You could win and get the exact same thing with flooding. But whereas something like wildfire is a little different because it needs fuel to burn. So once it burns, then everything changes. But that’s also so much more destructive than flooding. So each peril is different, but those probabilities are just so important to understand.

Caitlin Constantine: Matthew, this has been really great. Thank you so much for joining us today.

Matthew Eby: Oh, thanks so much for having me.

Sean Pyles: OK, Caitlin, the first thing I’m doing when I wrap up my work for the day is I’m going to put my property into Risk Factor, and then I’m going to study my home insurance policy.

Caitlin Constantine: That sounds like a fabulous evening. I hope that you’re going to enjoy an adult beverage along with that scintillating plan.

Sean Pyles: Yeah, maybe two.

Caitlin Constantine: I’m kidding, sort of. That’s actually a great plan and something that everyone should do regardless of whether you have an adult beverage with you or not.

Sean Pyles: Yes. So listeners, please put that on your to-do list. You will thank yourself later. But, Caitlin, can you tell us what’s coming up in episode three of the series?

Caitlin Constantine: Well, Sean, a lot of people want to know concrete steps they can take to help fight climate change. And one thing they may have heard about is what’s called ethical investing or ethical banking or ESG or sustainable banking or socially responsible investing.

Sean Pyles: OK. OK, Caitlin, I’m about to call the jargon police. These terms seem slapped together by a marketing team.

Caitlin Constantine: Oh, I agree with that. It is a lot of word salad, and we’re going to actually cut through that salad.

Sean Pyles: OK. I’m going to get a good fork and a good knife and maybe some tongs.

Caitlin Constantine: Yeah. And maybe a nice balsamic vinaigrette to go on top of it when you’re done.

Sean Pyles: Yes. Yes. All right.

Caitlin Constantine: So yes, but we’re hoping that this will give folks better tools as they’re making their decisions about how they can save the planet.

Spencer Tierney: We have to be honest with ourselves that our individual impact isn’t going to change the world on its own. It’s really going to be a group effort to create systemic solutions to climate change. And the more people who choose a bank based on its sustainable focus, the more of a hold sustainability will have in the banking industry.

Caitlin Constantine: For now, that’s all we have for this episode. So do you have a money question of your own? Turn to the Nerds and call or text us your questions at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected]. Also visit nerdwallet.com/podcast for more information on this episode. And remember to follow, rate, and review us wherever you’re getting this podcast.

Sean Pyles: This episode was produced by Tess Vigeland and Caitlin Constantine. I helped with editing. Sarah Schlichter helped with fact checking. Kaely Monahan mixed our audio. And a big thank you to the folks on the NerdWallet copy desk for all their help.

Caitlin Constantine: And here’s our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and it may not apply to your specific circumstances.

Sean Pyles: And with that said, until next time, turn to the Nerds.

Source: nerdwallet.com

Apache is functioning normally

May 14, 2023 by Brett Tams

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Mortgage rates, now around 6.5%, are cooling down the housing market and triggering mass layoffs in the mortgage and real estate industries.

Mortgage rates have nearly doubled to around 6.5% from the beginning of this year, but they may have not peaked, putting pressure on affordability for most prospective buyers as the Federal Reserve vows to tame inflation.

Following the Fed’s decision to raise interest rates by an additional 75 basis points on Wednesday, the central bank said it will hike rates as high as 4.6% in 2023. Goldman Sachs predicts a 75 bps hike at the November meeting followed by a 50 bps raise in December and a 25 bps increase in January 2023.

Interest rates can move higher as the economy stays firm, Logan Mohtashami, Lead Analyst at HousingWire said. “However, this is all about a tug of war between how long the economy can still be expanding.”

The Fed’s short-term rate does not directly impact long-term mortgage rates but it does steer market activity to create higher rates and reduce demand. Time will tell whether the mortgage market had already priced in expectation of the Fed’s rate hike on Wednesday, but in the months ahead, many industry watchers forecast mortgage rates to continue their climb until the central bank changes its monetary policy.

“Before the Federal Reserve raised the federal funds rate by 0.75 percentage point this week, mortgage rates had already risen by a similar amount,” said Holden Lewis, home and mortgage expert at NerdWallet. “Now the Fed has signaled that it will hike rates several more times this year and next year, so mortgage rates have plenty of room to go up even more.”

We do not see new construction returning in a meaningful way any time soon. Our macro-outlook is that demand for housing will remain out of balance with supply for the mid to long term.

Kurt Carlton, President of New Western

“The trickle-down effect of rising borrowing costs means that homebuyers will continue to feel higher monthly payments,” added George Ratiu, manager of economics research at Realtor.com.

With the rate for a 30-year mortgage 300 basis points higher than in 2021, the buyer of a median-priced home this week is facing a monthly payment that is 66% higher than the same week in 2021, Ratiu noted.

Marty Green, principal with mortgage law firm Polunsky Beitel Green, described increasing affordability pressures in the housing market as “throwing cold water on what was a frenzied residential real estate market.”

“Where ‘inventory’ was the big concern in 2021 and early 2022, the concern today is ‘affordability,’ with the combination of substantial price increases and rising rates simply pricing more and more Americans out of the market,” Green said.

The number of existing home sales reflects how the housing sector has been impacted by the Fed’s interest rate policies. Existing home sales declined for seven consecutive months in August, declining 0.4% to a seasonally adjusted annual rate of 4.8 million units last month from July, according to the National Association of Realtors (NAR). Existing home sales are down 19.9% year-over-year.

They (buyers with less financial stability) are having to go to surrounding towns instead of where everybody wants to be because they can no longer afford the more desirable locations.

Will Savage, an LO at PMC Mortgage

Although home price growth slowed and demand has weakened, tight supply is keeping prices elevated. The median existing house price increased 7.7% from a year earlier to $389,500 in August. While housing prices typically slow in July and August, they surged to an all-time-high of $413,800 in June.

With the mortgage industry accepting the current rate environment as a “necessary period of adjustment,” lenders are expected to roll out “creative mortgage products” to entice more borrowers, said Kurt Carlton, co-founder and president of real estate investment firm New Western.

“We do not see new construction returning in a meaningful way any time soon. Our macro-outlook is that demand for housing will remain out of balance with supply for the mid to long term,” Carlton said.

According to the NAR, there were 1.28 million existing homes on the market in August and would take 3.2 months to exhaust the current inventory of existing homes at last month’s sales pace. A five-to-seven-month supply is viewed as a healthy balance between supply and demand.

Loan officers get an up-close look at how much shoppers and capital-strapped buyers are getting priced out in the rate-rising environment.

Will Savage, a loan originator at PMC Mortgage, sees many pre-approved clients having to get reapproved for a mortgage based on the rate increases.

With higher monthly mortgage payments, buyers who had money are getting spooked and some those with less financial stability are getting priced out, Savage explained.

“They (buyers with less financial stability) are having to go to surrounding towns instead of where everybody wants to be because they can no longer afford the more desirable locations.”

And for those shoppers who choose to buy, “they may be more likely to select an adjustable-rate mortgage (ARM) because their initial payments will be lower than those they would find with a fixed rate mortgage,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion.

Buyers are going to have more choices than they’ve had in the last couple of years.

Matt Topping, an LO at Movement Mortgage

The way ARMs work is lenders offer lower mortgage rates for the initial term, generally three, five, or seven years. After that initial period ends, rates adjust periodically based on a benchmark or index, such as the Secured Overnight Financing Rate (SOFR), based on actual transactions in the Treasury repurchase market.

About 9.1% of total mortgage applications were for ARMs for the week ending Sep. 16, according to the Mortgage Bankers Association (MBA). The volume is slightly lower than in May when it hit a 14-year high of nearly 11% of the overall residential mortgage applications.

While some housing market watchers, including Ratiu, expect that household finances will get squeezed by rising costs and a shortage of homes for sale, some hopeful loan officers see opportunities for buyers as they may be seeing price cuts.

“We are already starting to have sellers realize we had a great run for a couple years and we’re getting more inventory,” said Matt Topping, a senior loan officer at Movement Mortgage.

“Buyers are going to have more choices than they’ve had in the last couple of years. They’re also going to have less competition and I think they’re going to be sellers who are more amenable to things they may have not even considered six months ago, a year ago.”

Source: housingwire.com

Apache is functioning normally

May 13, 2023 by Brett Tams

When it comes to housing starts, homebuilders are back on a rollercoaster ride. After pulling back at the start of the year, homebuilders jumped back in during February before pulling back again in March.

Homes were started at an estimated annual pace of 1.42 million in March, down 0.8% month over month, according to a report released Tuesday by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).

Despite the slight monthly decrease, housing starts are down just 17.2% year over year as of March, compared to an 18.4% annual drop in February.

This monthly decrease is mainly thanks to a 6.7% month-over-month drop in multifamily housing starts, which fell to a rate of 542,000. However, this rate still represents a 6.1% annual increase.

“Construction of homes in buildings with five or more units, which generally is going to include apartment buildings, has been running at a faster pace than last year,” Lisa Sturtevant, Bright MLS’ chief economist, said in a statement. “We have already seen rent growth begin to moderate as a result of a boom in new apartment construction in many markets, and these new construction figures could mean rents are set to come down further in the months ahead.”

Unlike multifamily housing starts, single-family starts were up 2.7% month over month to a pace of 861,000. But despite this increase, single-family starts were still down 27.7% year over year.

“Builder confidence overall has been rising every month in 2023, but confidence that prospective buyers will return is still low, possibly a cause of lower home construction activity,” Nicole Bachaud, Zillow’s chief economist, said in a statement. “But with home prices beginning to spring up once again, it’s clear that buyers are still jumping in where interest rates and creative financing will allow for affordable opportunities.”

Like the number of housing starts, the number of housing completions were also down month over month compared to February, falling 0.6% to a pace of 1.542 million, as the pace of multifamily completions dropped 7.1% to 484,000.

Single-family completions, meanwhile, were up 2.4% to a pace of 1.05 million. On a yearly basis, overall completions were up 12.9%, as the multifamily sector posted a 59.7% annual increase, while the single-family sector recorded a 0.2% year-over-year decrease.

“While new projects might be getting a slow start, housing completions, especially single-family homes, are up as new inventory is continuously moving through the construction pipeline,” Bachaud said. “This refresh to housing inventory is great for buyers who are facing the spring shopping season, giving more opportunities in a time where inventory is still tight. As prices continue their seasonal rebound, builders should respond with increased construction activity throughout the rest of the spring.”

Looking ahead, housing starts appear to be on a bit of a rocky road, with the overall number of building permits issued falling 8.8% to a pace of 1.413 million, a 24.8% annual decline. However, there was a 4.1% monthly increase to the number of single-family permits issued, with a pace of 818,000. The multifamily sector, on the other hand, recorded a 24.3% monthly decrease.

“Single-family permits are a leading indicator of future starts, which leads to more groundbreaking on new homes and more single-family completions, ultimately adding net new supply to the housing stock. Good news for a supply-starved market,” Odeta Kushi, First American’s deputy chief economist, said in a statement. “While builders still face several supply-side issues, in addition to a volatile mortgage rate environment, there is reason for cautious optimism. Notably, builders are responding to the recent decline in mortgage rates and the persistent lack of existing-home inventory.”

Regionally, housing starts were up month over month in the South (6.8%) and the Northeast (72.4%) but were down 28.1% in the West and 23.6% in the Midwest.

On a yearly basis, homebuilders’ housing starts were down in the Northeast (14.2%), the Midwest (44.4%) and the West (38.6%), while the South posted a 0.2% annual increase.

Source: housingwire.com

Apache is functioning normally

May 11, 2023 by Brett Tams

Preserving our planet one city at a time.

In recent years, there has been a growing trend in environmental sustainability and the need to address pollution in cities. Because of the growing awareness, many cities have made significant strides in this area, implementing measures to reduce pollution, promote clean energy, bring awareness around Earth Day and protect natural resources.

From innovative transportation solutions to community-based initiatives, these cities are leading the way toward a cleaner, more sustainable future. In this article, we will take a closer look at some of the cleanest cities in the US, exploring their approaches to sustainability and the impact of their efforts on the environment and the community.

What defines a clean city?

Cities have been scored and ranked based on numerous, measurable factors. These factors include alternative fuel resources, recycling jobs and air pollution, registered alternative fuel vehicles and traditional fuel vehicles.

These factors were scaled, scored and ranked scored and ranked while controlling for differences in population and land area. Based on this ranking, we’ve compiled the top 10 cleanest cities worthy of analyzing.

Located just two hours outside of New Orleans, Lafayette is a smaller Louisiana city making a true difference for the environment. The city has about half a million alternative fuel vehicles registered, helping it secure this top 10 spot. The city’s “Cleanest City” initiative includes regular litter pickups, community beautification projects and environmental education programs for local schools.

Lafayette has also implemented policies to reduce pollution and promote sustainable practices. The city has installed energy-efficient LED lighting in public areas and established a recycling program to reduce waste. Lafayette has also introduced a public transit system that utilizes hybrid buses, reducing emissions and promoting sustainable transportation.

Top apartments in Lafayette:

Rapid City has launched several initiatives to promote cleanliness and sustainability in the city. One of the most significant efforts is the “Keep Rapid City Clean and Green” program. Through this program, the city has organized numerous community clean-up events, including litter pickups and recycling drives. Rapid City has also implemented a public education campaign to raise awareness about reducing waste. This initiative has also helped contribute to the city’s level of recycling jobs available.

Rapid City has also implemented policies to reduce pollution and promote sustainable living. For example, the city has established a bike-sharing program to encourage more people to use sustainable transportation options. Rapid City has also introduced a public transit system that utilizes hybrid buses, reducing emissions and promoting sustainable transportation.

Top apartments in Rapid City:

One of the most significant efforts Duluth is making is the “Clean and Green Duluth” program, which encourages residents to take an active role in keeping the city clean. Through this program, the city has organized community clean-up events and litter pickups and has implemented a “zero waste” program at many public events. The zero-waste program has contributed to the city’s low pollution score along with its energy-efficiency initiatives.

Duluth has installed energy-efficient LED lighting in public areas and has introduced a public transit system that utilizes hybrid buses. In addition to these green initiatives, the “Bag it Duluth” initiative aims to reduce the use of single-use plastic bags by promoting the use of reusable bags through monetary rewards with partnering businesses.

Top apartments in Duluth:

Located 63 miles outside of Denver, Greeley is a green city securing our seventh spot. Greeley has implemented several initiatives to beautify their city. One of the most significant efforts is the “Greeley-Evans Transit” program, which provides public transportation services using hybrid buses. The use of hybrid buses reduces emissions and promotes sustainable transportation in the city.

Another notable initiative in Greeley is the “Clean Energy Plan,” which sets a goal of 100% renewable energy by 2030. As an extension of renewable energy efforts, the city has installed energy-efficient lighting in public areas and has a bike-sharing program to encourage sustainable transportation.

Top apartments in Greely:

With a low pollution score and 1 recycling job per 1 resident, Cedar Rapids has earned the title of a clean city. The city has committed to using renewable energy sources, such as solar and wind power, to reduce its carbon footprint. The city has installed several solar panels, including a large array at the Cedar Rapids Ice Arena.

Cedar Rapids has also launched several programs to help residents and businesses reduce their energy usages, such as the “Bright Ideas” program that offers free energy audits and incentives for energy-efficient upgrades. Additionally, the city has implemented a “Green Building Policy” that requires all new city-owned buildings to meet certain environmental standards, such as LEED certification.

Top apartments in Cedar Rapids:

Laredo is taking proactive steps to become a more sustainable and environmentally friendly city, with a focus on recycling, energy efficiency and green spaces. This Texas metro has a network of parks, open spaces and natural areas that provide residents with opportunities to enjoy the outdoors. The city has also implemented a program to plant more trees in the community, further beautifying these spaces.

Laredo is showing commitment to improving energy efficiency in municipal buildings, as well as promoting energy efficiency in homes and businesses. The city has implemented a program to replace streetlights with energy-efficient LED lights.

Top apartments in Laredo:

Lincoln’s goal of achieving 100% renewable energy by 2040, along with other initiatives, has earned it the fourth spot on our list. The city has already installed several solar arrays and wind turbines to work towards this goal in addition to implementing several programs to help residents and businesses reduce their energy usage. One program called the “Green Challenge” program offers free energy audits and incentives for energy-efficient upgrades.

Lincoln is working to promote sustainable transportation options, such as walking, biking and public transit, which is reflected in the city’s low number of traditional fuel-registered cars. The city has implemented a bike share program and is expanding the network of bike lanes and trails. The city also has a public transit system that runs on compressed natural gas (CNG), which is a cleaner-burning fuel than traditional gasoline.

Top apartments in Lincoln:

Known for its stunning scenery, Cheyenne is doing its part to protect these views and surrounding plains. Cheyenne has implemented several programs to help residents and businesses reduce their energy usage, such as the “Green Business Program” which offers energy audits for free and rewards for energy-efficient upgrades.

Through these initiatives, Cheyenne has a goal of achieving 100% renewable energy for its municipal operations by 2025, and the city has already installed several solar panels on city buildings. Water conservation is also top-of-mind, through the implemented programs to promote water conservation, including a program to install low-flow showerheads and toilets in homes and businesses.

Top apartments in Cheyenne:

Hot Springs takes the second spot with a low pollution score and ample recycling jobs along with other green-friendly initiatives. This Arkansas city has a comprehensive recycling program for residents, which includes the collection of paper, plastics, glass and other materials. The city also provides free recycling bins to residents and has a curbside recycling program.

Additionally, Hot Springs has implemented green building standards for new construction and renovations. The city provides resources and incentives for developers and homeowners to incorporate energy-efficient and sustainable features into their buildings.

Top apartments in Hot Springs:

Also known as the Quad Cities, Davenport-Moline-Rock Island has taken several steps to become a more environmentally sustainable region, earning our title as the cleanest city. The Quad Cities has several renewable energy projects, including a solar farm in Moline, Illinois, and a wind farm in Iowa. The region is also exploring additional opportunities for renewable energy development, setting a precedent for green initiatives.

The Quad Cities recycling program has diverted millions of pounds of materials from landfills. In 2019, the region’s recycling rate was approximately 43%, which is higher than the national average. With the highest number of recycling jobs on this list, at a whopping 530, the quad cities are clearly investing in the future of the area and of the earth as well.

Top apartments in Quad Cities:

Creating a better world for present and future generations

These cities are setting an example for the rest of the country to follow. Through their commitment to recycling, low levels of pollution and the adoption of alternative fuel vehicles amongst residents, these cities are taking significant steps towards reducing their environmental impact and creating a healthier and more sustainable future.

In sum, these metros demonstrate that clean, green living is not only possible but can also lead to greater economic prosperity, improved public health and a higher quality of life. As more communities adopt similar measures, we can work towards a cleaner, more sustainable future for all. For more green-friendly apartment cities, search here.

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Source: rent.com

Apache is functioning normally

May 11, 2023 by Brett Tams

Homie has partnered with Concord Homes, a premiere Utah-based builder. Concord Homes are truly a step above in both build quality and standard of service. Their principle of “custom within reach” speaks to Concord’s emphasis on providing value to each of their customers. In fact, we’ve heard the phrase “most bang for your buck” around the Homie water cooler more than once.

Here are five reasons why we love Concord Homes

1. Quality

By working with experienced contractors, Concord has quickly established a reputation in Utah for excellent build quality and top tier service, from start to finish. Even their base models tend to exceed other new builds when it comes to house features.

2. Variety of Builds

Concord Homes offer floorplans for all types of home buyers: townhomes, rambler homes, parade homes, and more! Concord also works with homeowners to renovate interiors and basements. There’s truly something for everyone at Concord Homes.

3. Emphasis on Space

Concord homes feature tons of unique storage space including wall shelving, basement storage, and lots of closet and cabinet space. They really understand how easily cluttered a home can get and ensure that each home has ample space for all your storage needs. Lastly, they get that storage space needs to be both functional and stylish.

4. Built for Community

Many of Concord’s builds are located in inviting communities that include pavilions, walking paths, pools, clubhouses, pickleball courts, and golf courses! Concord communities are the perfect place to raise family and build community.

5. Commitment to Building Green

Concord has introduced BamCore, their sustainable bamboo-based wall system, making them the first builder in Utah to embrace this responsible new framing system. BamCore is made of hollow timber bamboo that is processed in a low energy way and without heat, water, or chemicals. Aside from having the lowest possible carbon footprint for building materials, it’s incredibly strong and high performing.

Considering a new build?
Browse Concord’s beautiful country townhomes on the Homie Platform. Tour them with a Homie agent and keep up to 50% of the buyer commission at closing!

Homie and Homie Loans have a business relationship in that all are owned by the same persons. Legal Terms & Policies. Savings calculations based on difference between 3% listing agent commission and Homie’s low listing fee. Savings, commission, and timing may vary.

Source: homie.com

Apache is functioning normally

May 9, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

Being a homeowner comes with a steep learning curve, and many first-time homebuyers struggle financially in their first year of owning a home. After years of saving for a down payment, they are blindsided by the extra expenses that come with buying and owning a house. It’s frighteningly easy to exhaust your cash reserves before you even move in.

Misunderstandings about the costs of owning a home can push people even further into financial distress. You can avoid a lot of this trouble by doing your research and determining how much house you can actually afford. Develop a sample budget to help you prepare for the cost of homeownership and the expenses that come along with it.

Hidden Costs of Homeownership

Here are some expenses prospective homeowners often forget to consider while they are shopping for a new place to live. Keep these figures in mind as you set your budget for a home.

Utilities

If you’re used to paying for utilities and other costs of living as a renter, it can be tempting to think that homeownership won’t alter your budget significantly — especially if your estimated mortgage payment will be less than what you’ve been paying for rent. However, your new home may use substantially more electricity and gas than an apartment, townhouse, or smaller rental house. Plus, your monthly rent may have included utilities like water or internet.

Mortgage Payment

Each month, most of your mortgage payment will go toward your principal and interest. However, you’ll also pay additional expenses such as property taxes, homeowners insurance and mortgage insurance. Insurance companies assess these expenses annually, but your lender will collect the fees each month with your mortgage payment and hold the funds in escrow. If you choose a home in a neighborhood with a Homeowners Association (HOA), you’ll also have HOA dues to include in your budget.

Furniture and Decor

New rooms could mean new needs. When you buy a house, the furniture you used in your rental may not be a perfect fit for your new home. Paint, curtains, furniture, and other decorative items can personalize your new home but can be a strain on your budget. If the thought of all new furniture and decor is overwhelming, choose one room to finish at a time.

Lawn Care

As a first-time homeowner, you may find yourself with a whole new set of outdoor responsibilities — mowing grass, trimming hedges, and keeping weeds at bay. If you buy a home in a neighborhood with an HOA, you may face strict lawn care standards.
Whether you choose to do it yourself or hire a service to take care of it for you, lawn care can get expensive. If you go the DIY route, you’ll need to purchase equipment and supplies to get the job done, such as:

Lawnmower
Weed-eater
Hedge trimmer
Weed killer
Fertilizer
Grass seed
Pest control products

If you hire a company to take care of your lawn, expect to pay between $100 and $200 per month for basic care.

Renovations

Once the excitement of buying a new house starts to subside, your focus may shift to how your new home meets your needs. Unless you built a home with custom options, you may eventually want to update or renovate.

Renovations are becoming increasingly common among first-time buyers. According to a 2017 study by Houzz, first-time homebuyers spent an average of $33,800 on home renovations in 2016 — up 22% from 2015. Among all homeowners surveyed, the greatest motivating factor for renovating was a desire to customize their home.

Maintenance and Repairs

Maintenance and repairs can be a major budget killer for new homeowners. Many first-time homebuyers overlook the age of the roof, exterior paint, AC unit, and furnace when they buy a home. Even if you buy brand-new construction, you should begin saving for necessary maintenance updates and unforeseen repairs.

Don’t exhaust your savings to purchase your home; keep some money aside for necessary or unexpected repairs. Some financial experts suggest saving 1-4% of the home’s purchase price each year, depending on the age of your home.

Your homeowner’s insurance should cover damage due to fire or weather, but you’ll still need cash to cover the deductible, which could be anywhere from $200 to $2,000, or more. If you’re concerned about having enough cash on hand in the event of an emergency, look into plans with a higher monthly premium and a lower deductible.

A Sample Budget for Your First Year of Home Expenses

The price for a starter home will vary widely depending on where you live. Looking at average starter home prices around the country and landing somewhere in the middle, here’s a sample budget.

The following sample budget is an example of what your monthly home-related expenses would look like if you purchased a $200,000 home with a 5% down payment. For this sample, we used an online mortgage calculator and the average 30-year fixed mortgage interest rate of 5.10%.

Mortgage Payment

Monthly mortgage payment: $1599

Utilities and Lawn Care (based on national averages)

Gas	$82
Electricity	$183
Water	$40
Sewer / Garbage	$20
Internet / Cable	$147
Lawn Care	$150

Monthly utilities expense:$622

Recommended Maintenance/Repair Fund

Repairs/ Maintenance

$4,000 (based on 2% of purchase price)

Monthly repair/maintenance savings: $333

For this sample budget, your expenses would work out to $2,554 per month. That’s nearly $1,000 more than your monthly mortgage payment.

The Takeaway

Don’t make the mistake of asking how much house you can buy — instead, examine your income and projected expenses to figure out how much you can afford. If you’re buying a home with a spouse or significant other, be sure you’re on the same page.

An experienced real estate agent is an excellent resource. Ask lots of questions: inquire about the home’s roof and exterior, as well as appliances and heating or cooling systems. Your agent can also request information about HOA fees and utility usage from the seller.

For more information on home buying and selling visit Owners.com.

Save more, spend smarter, and make your money go further

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Source: mint.intuit.com

Apache is functioning normally

May 7, 2023 by Brett Tams

New home sales posted yet another increase in March, rising 9.6% from February to a seasonally adjusted annual pace of 683,000 homes, according to data published on Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). This is the fourth straight month of new home sales increases.

On a year-over -year basis, however, new home sales are still down 3.4%.

“Buyers have begun to adjust to the elevated mortgage rate levels, especially in areas where home prices have adjusted downwards to compensate,” Kelly Mangold, the principal of RCLCO Real Estate Consulting, said in a statement. “Despite signs of economic uncertainty in March, which included news of bank failures, buyers are still showing demand for new homes.”

The faster sales pace meant the inventory of unsold new homes continued to fall, dropping from 436,000 in February to 432,000 in March. This represents 7.6 months of supply at the current sales pace.

“The backlog of new construction homes from the building boom across 2021 is working its way to the market, offering fresh listings for buyers who are facing more competition on fewer homes,” Nicole Bachaud, Zillow’s senior economist, said in a statement.

“While still lower than new home sales a year ago, this bump in new inventory is important for keeping the market on a healthy and sustainable trajectory, especially during this spring home shopping season. And although overall home construction activity has slowed in recent months with high rates and slowing demand, slight upticks in single-family home construction could indicate that we will continue to see this flow of new construction homes making its way to the market when it’s needed the most.”

The increased demand for new homes also resulted in an uptick in the median sale price, which rose from $438,000 in February to $449,800 in March.

Regionally, the sales pace was up in the Northeast (65,000 homes), the Midwest (71,000 homes), and the West (161,000 homes) on a month-over-month basis, with the Northeast recording the largest increase at 170.8%.

The South (386,000 homes) was the only region to fall on a monthly basis, recording a 5.4% drop.

On a yearly basis, all regions except the Northeast (+27.5%) recorded drops in annual sales pace, with the Midwest recording the largest drop at 11.3%.

Source: housingwire.com

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The Refined Mortgage Lending Company & Home Loan Lenders

new construction

Apache is functioning normally

Ultra-low rates have squeezed housing inventory

Apache is functioning normally

Apache is functioning normally

Apache is functioning normally

What defines a clean city?

Creating a better world for present and future generations

Apache is functioning normally

Here are five reasons why we love Concord Homes

1. Quality

2. Variety of Builds

3. Emphasis on Space

4. Built for Community

5. Commitment to Building Green

Apache is functioning normally

Hidden Costs of Homeownership

A Sample Budget for Your First Year of Home Expenses

The Takeaway

Apache is functioning normally

Ultra-low rates have squeezed housing inventory

Our take

What defines a clean city?

Creating a better world for present and future generations

Here are five reasons why we love Concord Homes

1. Quality

2. Variety of Builds

3. Emphasis on Space

4. Built for Community

5. Commitment to Building Green

Hidden Costs of Homeownership

A Sample Budget for Your First Year of Home Expenses

The Takeaway

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