Welcome to my first weekly news brief, sharing important articles published about the housing industries. Please leave a comment about any newsworthy items I missed and maybe I should include:
- Current federal funds rate as of 9/22/22 – 3% to 3.25%
- Average mortgage rate as of 9/30/22 – 7.534% for 30 yr fixed; 6.533% for 15 yr fixed
The big news this week is the destruction wrought by Hurricane Ian (category 4) which made landfall near Ft. Myers on Wednesday, September 28. There are important lessons we can all learn from this disaster … to better prepare for future weather events.
Participants in The Housing Industries
- Construction industry – land developers, builders and companies offering building materials and products.
- Real estate industry – real estate agents and those involved in closings from banks and mortgage companies to title companies, insurance companies, real estate attorneys, moving companies and more.
- Government agencies – regulating everything from community development and building codes to the players involved in real estate from the closing to loan payoff.
What's Newsworthy in the Housing Industries
Hurricane Ian is projected to cost more than $50B, which will have a big impact on home insurance costs for all Floridians. Until you have a major home insurance claim, you don't realize how important your policy is … and how difficult it is to work with your insurance company (read: Anatomy of a Home Insurance Claim).
These weekly news briefs are meant to help homeowners learn about the current issues with various players in the housing industries, like your insurance company. My hope is you'll learn how to protect the investment you've made in your home.
100% Solar Community Endured Hurricane Ian with No Loss of Power
Just 12 miles northeast of Fort Myers which suffered catastrophic damage from Hurricane Ian, Babcock Ranch proved we can build communities that are capable of withstanding extreme weather events. The proof:
- Powered by 700,000 solar panels, the solar array generates more electricity than the 2,000 home neighborhood uses.
- Water control part of the community's design with streets that will flood before the houses and native plants used to help control storm water.
- Wind mitigation with power and Internet lines buried to avoid wind damage.
- Babcock Neighborhood School was designated an official shelter even though it didn't have the required generator … because it wasn't needed.
Lack of Flood Disclosure Laws is Putting Home Buyers at Risk
With more extreme weather events, homeowners are worried that their homes might flood. After Jackie's Georgia home flooded six months after she moved in, she learned from neighbors that flooding “… had been an issue for the area long before she moved in.” The article highlights two problems:
1. FEMA's flood maps showed her house is low risk for flooding (scary as I wrote an article, How to Avoid Houses with a Flood Risk and maybe it's wrong?).
2. George and 20 other states, don't have flood disclosure lays that require sellers to reveal a home's flood history.
Wondering about flood insurance (I'm rethinking after Hurricane Ian)? This is one of the major issues affecting homeowners and the housing industries across the US, especially as we grapple with insurance coverage for wildfires.
- What Homeowner Insurance Do You Have? and Need?
- Do You Really Need Flood Insurance?
- When FEMA maps say you're not in a flood zone … buying flood insurance is your decision. Here's how to fight your mortgage servicing company based on my personal Flood Insurance Nightmare.
How Hurricane Ian's Damage Could Exacerbate Inequality
10/1/22 on NBC News, How Hurricane Ian's damage could exacerbate inequality; Homeowners in white and wealthier communities are likely to see their home values rebound more quickly
Today's news is still focused on assessing the damage done by Hurricane Ian, along with rescuing those hurt or stranded by the storm. Once water and electricity, water and communications are restored, the task of clean-up and restoration will begin. This opinion piece makes key points about who wins and who loses the most.
- “Black households affected by disasters have often received less aid from FEMA compared with their white counterparts … the racial wealth gap has grown.”
- “Lower-priced homes see more precipitous drops in value, as do homes in higher-poverty neighborhoods and in neighborhoods with fewer white residents. And these values stay lower for longer.
- What's really sad is the impact this has on those who live in Black and Latino neighborhoods:
- Homes with lower values lower owners ability to move and cover a new down payment.
- Higher insurance premiums add financial strain that require trade-offs about today vs tomorrow, like a college education for children.
- Homeowners with higher value houses are more likely to buy flood insurance but … fewer than 50% of Florida homeowners affected by Hurricane Ian had flood insurance!
How Will Hurricane Ian Impact Home Insurance Costs in Florida?
9/30/22 on WPTV , How will Hurricane Ian impact home insurance costs in Florida?
Florida is already reeling from escalating home insurance costs. The industry is collapsing with six companies already declared insolvent and another 27 on the state financial watch list. This puts a burden on the remaining companies and the state's Citizens Property Insurance Corporation, the insurer of last resort.
There's a quote in this article by the Insurance Information Institute, saying “We anticipate rates will go up significantly next year … we will see continued double-digit increases if not higher going forward.”
The American Dream is Broken; 25 Best Places to Live for Families
Most Americans fill multiple roles within their family with many of us part of the “sandwich generation” juggling kids and parents. Fortune analyzed roughly 2,000 cities and towns across the US. They looked at not only schools and health care, but also support for older residents (sometimes called aging support). They found communities through the center of the US offered better support than the southeast, and at lower costs than major cities like New York and San Francisco.
The article shows a map of the top 25 communities and what I liked even more was this bar chart showing the types of support we typically need to care for aging parents. This data comes from Home Instead, a franchise that offers in-home care.
… plus a few older articles I wasn't able to share earlier
Bank of America's New Home Loan Program with 0% Down
Bank of American joins a growing list of banks offering programs for first time home buyers to buy a house with no down payment, no mortgage insurance and zero closing costs. Rather than rely on the traditional credit score, eligibility will be based on income, house location and factors like rent, utility bill, phone and auto insurance payments.
The article includes other banks offering similar low or no down-payment programs:
- Navy Federal Credit Union – offers a VA home loan option with no down payment.
- Chase Bank – offers down payment options starting at 3% for their DreaMaker home loan.
- PNC Bank – offers medical professionals a loan with no private mortgage insurance if they put down less than 20%.
Would You Rip Up Your Lawn for $6 a Square Foot?
Wish we could direct torrential rains to where we need the water?
While the southeast is dealing with flooding from Hurricane Ian, the west is ripping out their lawns because they don't have enough water to keep it green. Did you know that grass is the single largest irrigated crop in the US? And the water to keep grass alive can amount to more than 75% of your household water bill.
That's why many California water districts are paying homeowners to pull out their grass to lower water usage. They won't have to worry about brown spots anymore by switching to desert landscaping with cactus and native plants which are drought resistant … and green. One of the rules for grass replacement is adding rain barrels and landscaping that catches rainwater so it doesn't flow into city drains.
Wondering if a rain barrel is worth the investment?