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Tag: homeowners

  • It’s been a brutal year for homebuyers. Here’s what experts predict for 2024, from mortgage rates to prices.

    It’s been a brutal year for homebuyers. Here’s what experts predict for 2024, from mortgage rates to prices.

    New real estate data shows sellers incurring more losses, sales down


    New real estate data shows sellers incurring more losses, sales down

    02:14

    Home buyers faced a tough real estate market this year, with home prices continuing their upward march and mortgage rates reaching their highest levels in more than 20 years. Making matters worse, the number of homes available for sale were scarce, which also pushed prices skyward. 

    The question is whether 2024 will deliver more of the same, or if homebuyers could see some relief next year. Housing experts provided CBS MoneyWatch with their forecasts for the coming year.

    Will home prices keep rising in 2024?

    There’s some good news on this front, with experts predicting that home prices will be flat to slightly down in 2024.

    Prices could fall about 1% or be little changed next year, Daryl Fairweather, chief economist at Redfin, told CBS MoneyWatch. Meanwhile, Realtor.com is predicting that home prices could slip about 1.7% in 2024.

    That would come after the national median home price reached a high of $410,200 in June, a 14.2% surge since year-start, according to the National Association of Realtors. 

    To be sure, home prices have eased somewhat since then, with the median price dipping to $379,100 in October — yet that’s still higher than at year start and a 40% jump from October 2019, prior to the pandemic.

    Real estate prices surged during the pandemic partly due to higher demand from millennials starting their own families as well as baby boomers creating more households after a death or divorce. Low mortgage rates during the first two years of the crisis also spurred buying. 

    Mortgage rates: Will 2024 bring some relief?

    Mortgage rates have been climbing since 2022, when the Federal Reserve began hiking its benchmark rate in an effort to tame the highest inflation in four decades. 

    By October 2023, the typical rate for a 30-year loan had soared past 8%, after starting the year at 6.4%. 

    A growing number of economists now believe the Fed is done with rate hikes — and may even start cutting its benchmark rate in response to rapidly cooling inflation. The Fed could start lowering its rate by mid-2024, according to a Bank of America estimate. 

    That could push mortgage lenders to follow, with rates potentially dropping as low as 6.5% in 2024, predicts Realtor.com.

    “I believe we’ve already reached the peak in terms of interest rates,” Lawrence Yun, chief economist at the National Association of Realtors, said. “The question is when are rates going to come down?”

    Mortgage rates don’t always shadow the Fed’s rate decisions, as they tend to track the yield on the 10-year U.S. Treasury note. Investors’ expectations for future inflation, global demand for Treasurys and Fed policy can also influence rates on home loans.

    Will home inventory increase in 2024?

    Now for the bad news: experts don’t foresee an improvement next year in the number of available homes for sale. 

    For that to happen, builders would need to have a booming year, while a tidal wave of homeowners would have to be willing to sell their properties. 

    Homeowners have been reluctant to sell this year because many of them refinanced or bought their properties during the first two years of the pandemic, when mortgage rates were at historic lows of about 3%. 

    Even if mortgage rates fall to the 6%-range, many homeowners would still face higher financing costs, experts note. As a result, it’s unlikely that a flood of properties will hit the market in 2024, which means inventory could remain tight next year.

    Realtor.com expects housing inventory to fall 14% next year, in part because homeowners are likely to stay put. Homeowners will not sell their properties unless they’re absolutely forced to, Realtor.com Chief Economist Danielle Hale predicted.

    “Moves of necessity — for job changes, family situation changes, and downsizing to a more affordable market — are likely to drive home sales in 2024,” Hale said. “Home buyers will continue to seek out markets where they feel like they get the most out of their dollar as they look for homes that better meet their needs.”

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  • Here’s what to do if you get behind on mortgage payments

    Here’s what to do if you get behind on mortgage payments

    As inflation and interest rates remain elevated this year, some Americans are having trouble keeping up with mortgage payments.

    Although the number of U.S. mortgages delinquent for 30 days or more fell slightly to 2.6% in August 2023 from 2.8% at the same time last year, Americans are still facing record high interest rates, according to the most recent figures from CoreLogic.

    “U.S. mortgage performance remained strong in August, supported by a robust job market and a healthy economy. However, this thriving job market comes at a time when interest rates are quickly rising,” Molly Boesel, principal economist for CoreLogic, said in a report.

    The current average interest rate for a 30-year fixed-rate mortgage continues to hover above 8%, the highest it’s been since 2000. 

    For homeowners struggling to make their monthly mortgage payments, there are options to protect you from falling too far behind. Here are four tools and tips for mortgage holders in need of assistance. 

    Get forbearance

    The financial institution that handles your mortgage can grant forbearance, which is a temporary suspension of payments that typically last for three to six months. During the forbearance period, your account is marked as current and paid. Once the forbearance period ends, a homeowner must either repay the missed payments in a lump sum or through an installment payment plan. 

    To obtain forbearance, you’ll have to prove that you’re in financial hardship. Each lender requires different documentation from those applying for forbearance. 

    Refinance the loan

    Another option for homeowners experiencing financial difficulty is to take out a new mortgage — hopefully at a lower interest rate — and to use the funds generated from a new loan to pay off the pre-existing one. If done correctly, borrowers will walk away with new financing that comes with a lower mortgage payment because the new loan has a lower interest rate. Most mortgage experts, however, don’t recommend homeowners use this refinance strategy, unless they can find a new mortgage plan that will reduce their interest rate by at least 1%.

    Homeowners should strive to increase their credit score before refinancing, experts said. Many refinancing options require homeowners to pay closing costs typically ranging from 2% to 6% of your loan amount, according to Lending Tree.

    Try getting a loan modification

    A loan modification enables homeowners to change the terms of their existing home loan rather than taking out a new one. 

    Loan modifications usually come in four forms — reduced interest rate, extended loan term, changed loan type (from conventional to adjustable rate, for example) or principal reduction. Any of those forms would result in a lower mortgage payment and, ideally, something more manageable for the homeowner. Borrowers must contact their loan servicer and be able to provide proof of financial hardship to be eligible for this tool. 

    Seek government assistance

    Homeowners can apply to federal programs designed to help them stay in their homes and keep up with the mortgage. Examples include:

    • The Federal Housing Administration (FHA) loss mitigation programs. The U.S. Department of Housing and Urban Development offers several options for FHA-insured homeowners whose mortgage is either in default or at risk of default. 
    • The U.S. Department of Veteran Affairs (VA) offers financial counselors to military families facing foreclosure. 
    • The Consumer Financial Protection Bureau (CFPB) Homeowner Assistance Fund. This is a federal assistance program for homeowners financially impacted by COVID-19 who need assistance to pay their mortgage or other home expenses.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • Mortgage rates unlikely to dip this year, experts say

    Mortgage rates unlikely to dip this year, experts say

    The highest mortgage rates in more than two decades have many Americans wondering when borrowing costs could recede. For now, the answer is murky, although some analysts think that rates on home loans have likely peaked.

    The path for mortgages depends as ever on the Federal Reserve’s plans for its benchmark short-term lending rate. And on that score there is more certainty: Wall Street investors overwhelmingly expect policy makers to leave rates unchanged when they release their latest readout on the state of the economy on Wednesday. 

    The rate on a 30-year fixed-rate mortgage is 7.18%  6.51% for a 15-year loan, according to Freddie Mac data. Those rates, along with higher home prices, have made it more challenging for the average American to purchase a house. 

    Mortgage rates don’t always mirror the Fed’s rate increases, but rather tend to track the yield on the 10-year U.S. Treasury note. Investors’ expectations for future inflation, global demand for Treasurys and Fed policy can also influence rates on home loans.

    For most Americans, finding a home they can afford is a tall task. Residential real estate prices have continued to rise this year amid a limited inventory of properties. Many homeowners who locked in lower interest rates during the pandemic have opted not to sell their home in fear of being faced with having to buy another house at today’s elevated rates.

    “It’s always a nearly impossible task to predict mortgage rate movements, but there’s no clear reason to expect a sizable drop in the near future,” Nicole Bachaud, senior economist at Zillow, told CBS MoneyWatch. 

    The median sales price for existing homes rose 1.9% in July to $406,700 compared with a year earlier, although prices dipped slightly in the beginning of the year, according to recent data from the National Association of Realtors. That’s an increase of 57% since January 2020, prior to the pandemic, when the median sales price for existing homes was $266,300.


    Interest rate “lock-ins” leading to fewer available homes

    03:49

    For homebuyers, meanwhile, every percentage point matters. Jacob Channel, a senior economist at LendingTree, noted that a $350,000 home loan issued at a rate of 6.02% would result in a $2,103 monthly payment, but that would rise to $2,371 a month at the current rate of 7.18%.

    “That’s an extra $268 a month, an extra $3,216 a year and an extra $96,480 over the 30-year lifetime of the loan,” he said. 

    Still, some Wall Street analysts believe mortgage rates may have peaked and predict that policy makers will cut the benchmark rate in the first half of 2024. For now, homebuyers applying for a mortgage over the rest of the year should expect rates of just over slightly 7%, Channel said. 

    “They probably won’t return to their pandemic era lows anytime soon, if ever, but rates eventually trending back under 6% in 2024 or 2025 is certainly not out of the question,” he said. 

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  • Storms are wreaking havoc on homes. Here’s how to make sure your insurance is enough.

    Storms are wreaking havoc on homes. Here’s how to make sure your insurance is enough.

    Days after Tropical Storm Hilary battered the West Coast with record rainfall, flash floods and fierce winds, Californians now face another challenge: Figuring out the costs of repairing their battered homes and replacing valuables.

    Climate change has put more Americans in the locus of storms and other extreme weather events that could have devastating consequences on their household finances. In the past year alone, more than 15 natural disasters have hit the U.S., with catastrophes like the Maui wildfires destroying billions of dollars worth of property, according to data from the National Centers for Environmental Information.

    As natural disasters become more frequent and severe, having enough insurance coverage is essential. However, not all insurance policies cover every type of extreme weather event.

    Here’s how to make sure you have the right type of insurance for your home, and how to get additional coverage if you need it.

    Know your plan 

    Standard homeowner policies differ from company to company. Some plans may not cover losses from earthquakes, certain types of water damage, and wind damage caused by tornadoes or hurricanes, according to insurance company Allstate. 

    To know what your plan covers and how much, check your policy. You can request a digital or hard copy of your homeowners insurance policy directly from your insurance company. In addition, many insurers offer mobile apps that let you view and manage your policy information. 


    Home insurance rates rising nationally

    03:03

    Coverage add-ons

    Insurance policy add-ons, also known as endorsements or riders, allow you to personalize your insurance policy to meet your specific coverage needs, according to personal-finance website Bankrate.

    You can purchase different types of endorsements to alter or extend existing coverage to protect high-value items in your home that are not insured by a basic policy. This helps ensure that any valuable items destroyed in a natural disaster will be replaced by your insurance at their current market value.

    A scheduled personal property endorsement, which extends coverage beyond your basic policy, is one way to insure valuable items such as jewelry. To get this type of endorsement, your insurance company will likely require an appraisal or proof of value for the items you want covered. 

    Alternatively, you can also insure high-end possessions by purchasing additional blanket coverage which is used to increase coverage limits for an entire class of items. For example, if your standard policy covers up to $2,000 worth of artwork, blanket coverage could increase that coverage limit to $10,000. This option doesn’t require an appraisal. 

    Get flood insurance 

    Floods are the most common weather-related natural disasters, and they occur in all 50 U.S. states, according to the National Severe Storms Laboratory. Just one inch of flooding can cause nearly $27,000 worth of damage to a one-story, 2,500 square-foot home, data from the Federal Emergency Management Agency shows. 

    Flood insurance protects your home and other property against flood-related damages. As most home insurance companies don’t offer this type of coverage as an add-on, you’ll most likely have to purchase a standalone flood insurance policy. 

    The National Flood Insurance Program offers policies that you can purchase through an insurance carrier or private insurance company. 

    Keep an up-to-date inventory list 

    Having a list of everything you own can take some of the pain out of filing an insurance claim and help you get the most out of your policy.

    Make an inventory list that includes all of the major items in your home with their dates of purchase and how much you paid for them. Then, snap photos of all the items on your list. If you have receipts for your items, store them alongside your inventory list. These documents can help you get more money from your insurance company to replace your damaged possessions after a weather-related disaster. 

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  • It’s taking Americans much longer in life to buy their first home

    It’s taking Americans much longer in life to buy their first home

    The typical age to buy a first home has jumped to 36 years old, the oldest ever on record. The rising age is a sign that high housing costs and mortgage rates are pushing homeownership out of reach for younger Americans.

    In 2021, the typical first-time homebuyer was 33, according to 2022 data from the National Association of Realtors. Two years and one price surge, an inventory shortage and more than 10 Fed rate hikes later, that median age has gone up by three years, as the dream of home ownership becomes more distant for millennials.

    “There’s no getting around how tough buying a home can be in today’s high-interest rates and high-price housing market,” Jacob Channel, senior economist at LendingTree said Tuesday.

    Baby boomers recently edged out millennials as the largest share of homebuyers. Boomers, ages 58 – 76, made up 39% of home buyers in 2022, compared with 28% for millennials, according to NAR data from March. That’s an increase from 29% last year and the highest percentage of any generation. 

    “[Baby boomers] have built housing equity over their working lives, and they have been able to build wealth, and now they’re buying their dream vacation home or their second home,” Washington Post business reporter Julian Mark told CBS News.  “They just have more money.”


    Loan rejection rates on the rise, New York Fed says

    06:15

    One economic downturn after another

    Millennials, born between 1980 and 2000, have been dealt a far different set of circumstances. From the dot-com bubble burst in 2000 to the Great Recession of 2008 and, most recently, the coronavirus pandemic, millennials “have been hit with one recession after the next” since entering the workforce, Mark noted. 

     “Especially the Great Recession, was very hard on millennials for wage growth and that has essentially stunted their ability to meet major milestones like home ownership,” he said.

    With three major downturns in their rear view mirror, millennials now face a challenging housing market in which fewer homes are available for sale, asking prices are more expensive, and interest rates have climbed past 7.1%. The national median home price hit $402,600 in July, up from $359,000 at the start of 2023; the typical mortgage on a single-family home is now $2,051 compared with $1,837 a year ago, according  to NAR.


    Interest rate “lock-ins” leading to fewer available homes

    03:49

    Mortgage rates have jumped so much that some real estate agents have started advising their clients to buy the home and wait for interest rates to fall to refinance — described by the industry phrase “Marry the house, date the rate.” That strategy may be “somewhat reasonable,” Mark said,”but you have to be prepared to pay those interest rates perhaps forever because it’s unclear when they will drop and by how much,” he said. 

    Where’s the hope?

    “As tough as it may seem, those who want to buy, but can’t afford to right now, should try to keep hope,” Channel said.

    But that’s proving to be difficult. Roughly half of Americans who dream of owning a house one day worry they never will, a LendingTree survey found. 


    Mortgage transfers helping homebuyers get lower rates

    04:27

    “Perhaps home ownership is not necessarily the fastest track to building wealth,” suggested Mark. 

    “Perhaps it is renting and using that money that you were planning to put on a downpayment — maybe just invest it into the stock market or the money market or any other safer investment that will have some type of steady yield instead of the theoretical appreciation of a home,” he said.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • AAA pulls back from offering insurance in Florida, following Farmers

    AAA pulls back from offering insurance in Florida, following Farmers

    Fewer options for property insurance in Florida


    Fewer options for property insurance in Florida

    02:30

    AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers dialing back their presence in the Sunshine State amid a growing risk of natural disasters.

    “Unfortunately, Florida’s insurance market has become challenging in recent years,” the company said in a statement emailed to CBS MoneyWatch. “Last year’s catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate.”

    AAA declined to say how many customers won’t have their policies renewed, saying only that the change will affect “a small percentage” of policy holders.

    The company is the fourth insurer over the last year say it is backing away from insuring Floridians, a sign extreme weather linked to climate change is destabilizing the insurance market. Farmers Insurance recently said it will no longer offer coverage in the state, affecting roughly 100,000 customers. 

    Farmers said the move will affect only company-branded policies, which make up about 30% of its policies sold in the state.

    Bankers Insurance and Lexington Insurance, a subsidiary of AIG, left Florida last year, saying recent natural disasters have made it too expensive to insure residents. Hurricanes Ian and Nicole devastated Florida in 2022, causing billions of dollars in damage and killing a total about about 150 people.

    Under Florida law, companies are required to give three months’ notice to the Office of Insurance Regulation before they tell customers their policies won’t be renewed.

    Some insurers in Florida have gone out of business in recent years, brought down by massive payouts from storms. Still, drivers and homeowners who AAA dropped have options for finding a new insurer. Hundreds of companies — including Allstate, Esurance, Geico, Hartford and 21st Century — still offer policies in the state, according to Florida’s database of insurance companies. 

    Soaring homeowner costs

    Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to soar about 40%. 

    Insurance companies are leaving Florida even as lawmakers in December passed legislation aimed at stabilizing the market. Last year, Gov. Ron DeSantis signed a law that, among other things, creates a $1 billion reinsurance fund and puts disincentives in place to prevent frivolous lawsuits. The law takes effect in October. 

    AAA said it’s encouraged by the new measure, but noted “those improvements will take some time to fully materialize and until they do, AAA, like all other providers in the state, are forced to make tough decisions to manage risk and catastrophe exposure.”

    Insurers are staging a similar exodus in California, where AIG, Allstate and State Farm have stopped taking on new customers, saying that wildfires are driving up the costs of underwriting policies. Scientists say climate change has made the West warmer and drier over the last three decades and will continue to make weather more extreme and wildfires more frequent and destructive.

    According to data compiled by the industry-supported Insurance Information Institute, California has more than 1.2 million homes at risk for extreme wildfire, far more than any other state.

    Insurance premiums are also rising in Colorado because of wildfire risks, and an Oregon effort to map wildfire risk was rejected last year because of fears it would cause premiums to skyrocket.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • AAA pulls back from offering insurance in Florida, following Farmers

    AAA pulls back from offering insurance in Florida, following Farmers

    Fewer options for property insurance in Florida


    Fewer options for property insurance in Florida

    02:30

    AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers dialing back their presence in the Sunshine State amid a growing risk of natural disasters.

    “Unfortunately, Florida’s insurance market has become challenging in recent years,” the company said in a statement emailed to CBS MoneyWatch. “Last year’s catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate.”

    AAA declined to say how many customers won’t have their policies renewed, saying only that the change will affect “a small percentage” of policy holders.

    The company is the fourth insurer over the last year say it is backing away from insuring Floridians, a sign extreme weather linked to climate change is destabilizing the insurance market. Farmers Insurance recently said it will no longer offer coverage in the state, affecting roughly 100,000 customers. 

    Farmers said the move will affect only company-branded policies, which make up about 30% of its policies sold in the state.

    Bankers Insurance and Lexington Insurance, a subsidiary of AIG, left Florida last year, saying recent natural disasters have made it too expensive to insure residents. Hurricanes Ian and Nicole devastated Florida in 2022, causing billions of dollars in damage and killing a total about about 150 people.

    Under Florida law, companies are required to give three months’ notice to the Office of Insurance Regulation before they tell customers their policies won’t be renewed.

    Soaring homeowner costs

    Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to soar about 40%. 

    Insurance companies are leaving Florida even as lawmakers in December passed legislation aimed at stabilizing the market. Last year, Gov. Ron DeSantis signed a law that, among other things, creates a $1 billion reinsurance fund and puts disincentives in place to prevent frivolous lawsuits. The law takes effect in October. 

    AAA said it’s encouraged by the new measure, but noted “those improvements will take some time to fully materialize and until they do, AAA, like all other providers in the state, are forced to make tough decisions to manage risk and catastrophe exposure.”

    Insurers are staging a similar exodus in California, where AIG, Allstate and State Farm have stopped taking on new customers, saying that wildfires are driving up the costs of underwriting policies. Scientists say climate change has made the West warmer and drier over the last three decades and will continue to make weather more extreme and wildfires more frequent and destructive.

    According to data compiled by the industry-supported Insurance Information Institute, California has more than 1.2 million homes at risk for extreme wildfire, far more than any other state.

    Insurance premiums are also rising in Colorado because of wildfire risks, and an Oregon effort to map wildfire risk was rejected last year because of fears it would cause premiums to skyrocket.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • AAA pulls back from offering insurance in Florida, following Farmers

    AAA pulls back from offering insurance in Florida, following Farmers

    Fewer options for property insurance in Florida


    Fewer options for property insurance in Florida

    02:30

    AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers exiting the Sunshine State amid a growing risk of natural disasters.

    “Unfortunately, Florida’s insurance market has become challenging in recent years,” the company said in a statement emailed to CBS MoneyWatch. “Last year’s catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate.”

    AAA declined to say how many customers won’t have their policies renewed, saying only that the change will affect “a small percentage” of policy holders.

    The company is the fourth insurer over the last year say it is backing away from insuring Floridians, a sign extreme weather linked to climate change is destabilizing the insurance market. On Tuesday, Farmers Insurance said it will no longer offer coverage in the state, affecting roughly 100,000 customers. 

    Farmers said the move will affect only company-branded policies, which make up about 30% of its policies sold in the state.

    Bankers Insurance and Lexington Insurance, a subsidiary of AIG, left Florida last year, saying recent natural disasters have made it too expensive to insure residents. Hurricanes Ian and Nicole devastated Florida in 2022, causing billions of dollars in damage and killing a total about about 150 people.

    Under Florida law, companies are required to give three months’ notice to the Office of Insurance Regulation before they tell customers their policies won’t be renewed.

    Soaring homeowner costs

    Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to soar about 40%. 

    Insurance companies are leaving Florida even as lawmakers in December passed legislation aimed at stabilizing the market. Last year, Gov. Ron DeSantis signed a law that, among other things, creates a $1 billion reinsurance fund and puts disincentives in place to prevent frivolous lawsuits. The law takes effect in October. 

    AAA said it’s encouraged by the new measure, but noted “those improvements will take some time to fully materialize and until they do, AAA, like all other providers in the state, are forced to make tough decisions to manage risk and catastrophe exposure.”

    Insurers are staging a similar exodus in California, where AIG, Allstate and State Farm have stopped taking on new customers, saying that wildfires are driving up the costs of underwriting policies. 

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • Thousands of Americans are leaving homes in flood-risk areas. But where are they moving to? | CNN

    Thousands of Americans are leaving homes in flood-risk areas. But where are they moving to? | CNN



    CNN
     — 

    For more than four decades, the US government has been paying cities and states to move homeowners away from areas that are at high risk of severe flooding.

    When a hurricane or major flooding event devastates an area, a neighborhood can send a request for the local or state government to buy the impacted land and give residents money to start over someplace else.

    The Federal Emergency Management Agency’s buyout program is a form of so-called “managed retreat” – a long process that relocates people, businesses, homes and infrastructure to an area that’s safer from the impacts of climate change-fueled weather events. But until recently, little was known about where people ultimately moved and whether their new location actually reduced their flood risk.

    A new study published in the journal Environmental Research Letters — which coincides with a managed retreat conference unfolding in New York City this week — provides a clearer picture of these home buyouts.

    Data from thousands of home buyouts shows people aren’t moving that far from their original homes — and often they are moving within the same floodplain. But overall, their risk of flooding decreased after the move, a nod to the program’s success. Researchers also found that race has played a role in who is moving and where they’re relocating to.

    “As climate change and rising insurance costs increase the pressures to retreat from the coast and flooded areas, we need to pay more attention to where people are going,” James Elliott, a professor of sociology at Rice University and a co-author on the study, told CNN.

    The findings “point to how the program plays out differently in different types of communities and neighborhoods across the country,” he said.

    Using flood risk estimates, housing values, race and income data from the US Census Bureau, and FEMA relocation data between 1990 and 2017, researchers from Rice University built a nationwide database to map out where nearly 10,000 Americans sold their flood-prone homes and where they moved.

    They found people who have taken advantage of the FEMA buyouts typically did not move that far to reduce their risk, and usually stayed within the same floodplain.

    On average, buyout participants reduced their future flood risk by up to 65%, Elliott said. The average driving distance between their former homes and their new ones was around seven miles, with almost 74% of homeowners remaining within 20 miles of their old, flood-damaged homes.

    The findings were also racially segmented, Elliot said. About 96% of homeowners who relocated from a predominantly White neighborhood ended up moving to another majority White community.

    In contrast, residents of predominantly Black and Hispanic communities were far more likely to relocate to a new neighborhood with a different demographic: Only 48 percent of Black homeowners who go through the buyout moved to predominantly Black neighborhoods.

    The study also found that buyout areas with predominantly White homeowners had a nearly 90% chance of flooding by 2050, while majority-Black buyout areas had a roughly 50% chance, suggesting that White residents tend to only participate in buyouts when flood risk is much more intense.

    Though the data suggests that homeowners in White neighborhoods have a higher tolerance for flood risk, 80% of the people who took advantage of the FEMA program previously lived in majority-White neighborhoods. This could be because White communities “are more successful at winning the opportunity and money to participate” in the FEMA program, Elliott said.

    The home buyout program, which is the largest managed-retreat initiative in the country so far, is “disproportionately targeted toward Whiter residential areas,” Elliott said.

    “Communities of color and lower income areas just have fewer options to move nearby, so they are less likely to participate in the managed buyout,” Elliott said. In Houston, he found in a previous study that most of the people participating in buyouts in racially diverse communities tend to be White homeowners.

    “It’s sort of the last wave of White flight in those neighborhoods,” he added. And when “flood risks come, the final White residents begin to pull up stakes through the buyout program and move further out.”

    Alexander de Sherbinin, a senior research scientist at the Columbia Climate School and deputy manager of NASA’s Socioeconomic Data and Applications Center, said it’s not clear from the study that White homeowners are reluctant to move to racially diverse neighborhoods, and noted that there is evidence to the contrary.

    De Sherbinin pointed out that there is a process of “climate gentrification” playing out in areas that have experienced climate disasters, “whereby more affluent households are moving into ethnically diverse neighborhoods that are less at risk of flooding, and are even displacing local residents.”

    He pointed to Miami’s Little Haiti neighborhood as an example of this phenomenon, where higher ground helps protect the neighborhood from sea level rise and higher storm surges.

    “The research findings make sense in one regard, which is that whiter, more affluent neighborhoods are more likely to have the insurance coverage and resources to stay in place, despite rising risks,” de Sherbinin told CNN. “In other words, they’re able to rebuild, and possibly accommodate risks by raising their houses above flood lines.”

    As the climate crisis advances, more homeowners and businesses will be forced to relocate, adding stress and vulnerability to new regions. Previous research has shown that climate migration will become more likely as the planet warms and people seek places they consider safer and more stable.

    “We really need to think about how people relocate locally, what the options are, and how the ongoing racial segregation, especially in urban environments, is affecting those local retreats and people’s decisions and abilities not to retreat, because all we see are the people who actually say yes to the program,” Elliott said.

    “That’s the classic thing with climate change — it’s not about ‘if’ people have to move from these places, but ‘when and how’.”

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  • This shade of gray can add $2,500 to the value of your home

    This shade of gray can add $2,500 to the value of your home

    If you’re looking to sell your home, do yourself a favor and pick up that paintbrush and say adieu to white walls and vibrant hues.

    A new study from real estate marketplace Zillow shows that dark gray interiors are in vogue among prospective homebuyers, potentially helping sellers rake in slightly bigger bucks on closing day.  

    Homes with rooms painted in dark, dusky shades commanded higher bids than those with lighter interiors, the study found. A home with a charcoal gray kitchen, for example, can sell for $2,512 more than similar homes, while dark gray in the living room or bedroom can bring in offers $1,755 higher than pale neutrals. By comparison, a white kitchen can lower a home’s sale price by more than $600, Zillow’s research found.

    Zillow charcoal gray
    Zillow research finds homes with a charcoal gray kitchen can sell for an estimated $2,512 more than similar homes. 

    Zillow Group, Inc/ Getty images


    Prospective buyers are embracing moody, dramatic tones due, in part, to the influence of home improvement TV shows and social media. But that’s not the only reason they’re gravitating toward shades of dark gray, Mehnaz Khan, a color psychology specialist and interior designer, said. 

    Home as refuge

    “Gray is the color of retreat,” Khan said in a statement. “As we come out of the pandemic and return to our hectic lives, buyers want home to be a refuge. They want to withdraw and escape from the uncertainty of the outside world, and rooms enveloped in dark gray can create that feeling of security.”  

    Zillow’s researchers surveyed 4,700 recent and prospective homebuyers across the U.S. to assess their color preferences. Buyers were shown images of homes with interiors and doors painted in one of 10 or 11 colors. The colors were then rated based on buyers’ perception of each respective home, how likely they were to tour the homes and how much they’d be willing to pay for them. 

    Charcoal gray scored the highest in the study, meaning that the color was linked to homes that received the highest bidding offers. But it wasn’t the only color buyers were willing to shell out for, according to the report. Bathrooms painted in terra-cotta brown could boost a home’s sale price by $1,624. 

    Zillow Terra Cotta bathroom
    Zillow research finds homes with a terracotta brown bathroom can sell for an estimated $1,624 more than similar homes. 

    Zillow Group Inc/ Getty


    A relatively low-cost way to spruce up a space, painting is an extremely popular project among homeowners. Interior painting was the most popular home improvement project in 2021, with roughly 32% of households reporting they’d undertaken some form of painting project, according to an Angie’s List report. 

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  • Foreclosures spike as banks lower the boom on homeowners

    Foreclosures spike as banks lower the boom on homeowners

    Evictions on the rise in several U.S. cities


    Evictions on the rise in several U.S. cities, new data shows

    05:38

    Americans are losing their homes at a faster rate this year as banks make up for lost time after state and federal foreclosure bans expired. 

    Lenders repossessed nearly 96,000 properties during the first three months of 2023, up 22% from the same period last year, according to real estate data provider ATTOM. Foreclosures are especially surging in some states — Illinois had the nation’s highest foreclosure rate last year at 1 in every 762 homes, followed by Delaware (1 in 812) and New Jersey (1 in 824).

    Housing experts in Illinois pointed to the expiration of a foreclosure moratorium the state implemented during the pandemic as one factor behind the jump in people losing their homes. That “created a potential backlog of foreclosure activity,” said Geoff Smith, executive director of DePaul University’s Institute for Housing Studies in Chicago, noting that many households were technically in foreclosure while the ban was in place.

    The restrictions on foreclosures were lifted in late 2021, “so now lenders are catching up,” Daniel Lindsey, the chief litigation officer for Legal Aid Chicago, told CBS MoneyWatch. 


    Black women have the highest eviction rates in the U.S.

    06:36

    Elsewhere around the U.S., California had the most foreclosure proceedings under way in the first quarter, with nearly 7,000 cases in the courts, followed by Texas, Florida and New York.

    A home is considered to be in foreclosure after a mortgage payment is between 30 and 90 days late, depending on the state. 

    ATTOM CEO Rob Barber said foreclosures are rising even though the federal government took steps during the pandemic to limit the activity. The U.S. Department of Housing and Urban Development suspended foreclosure and eviction proceedings from March 2020 to July 2021.The moratorium helped 1.6 million homeowners avoid foreclosure as of September 2022, according to Federal Housing Administration data.  

    Barber attributed the rise in foreclosures to “ongoing economic challenges,” such as rising unemployment and persistent inflation, which has slammed U.S. household budgets.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • No words were exchanged before a White homeowner shot a Black teen who rang his doorbell, according to statements to police | CNN

    No words were exchanged before a White homeowner shot a Black teen who rang his doorbell, according to statements to police | CNN



    CNN
     — 

    A White, 84-year-old homeowner charged with shooting Ralph Yarl after the Black teen went to the wrong Kansas City address to pick up his siblings told police they didn’t exchange words before he fired at him through a locked glass door – and that he did so because he thought the teen was trying to break in.

    Homeowner Andrew Lester – who faces two felony charges, for assault in the first degree and armed criminal action – told police he fired immediately after answering the doorbell when he saw 16-year-old Ralph pulling on an exterior door handle, according to the probable cause document obtained by CNN.

    Lester said he was “scared to death” due to the boy’s size, according to the document.

    After the April 13 shooting, which left the teenage boy with gunshot wounds to his head and arm, Ralph told police while he was hospitalized that he did not pull on the door, according to the document.

    It was “nothing short of a miracle” that Ralph was discharged from the hospital, but “he’s not out of the woods yet,” his attorney Ben Crump told CNN on Monday.

    The shooting of the unarmed Black teenager captured national attention as it drew outrage online and fueled protests in Kansas City. Protesters have marched through the city chanting, “Justice for Ralph” and calling for the shooter’s arrest.

    Clay County Prosecuting Attorney Zachary Thompson has said that “there was a racial component to this case,” but did not elaborate.

    Lester was not in custody as of Monday night, though a warrant has been issued for his arrest, according to authorities.

    Andrew Lester was charged for shooting 16-year-old Ralph Yarl.

    On the night of the shooting, the 84-year-old man was taken into custody but was released less than two hours later, two representatives at the Kansas City Police Department detention unit previously told CNN. Thompson said Lester was released because police recognized that more investigative work needed to be done.

    Attorney Crump told CNN’s Jake Tapper Monday that it makes no sense the shooter hasn’t been arrested.

    “Nobody can tell us if the roles were reversed, and you had a Black man shoot a White 16-year-old teenager for merely ringing his doorbell that he would not be arrested,” Crump said. “I mean, this citizen went home and slept in his bed at night after shooting that young Black kid in the head.”

    “He merely rang the doorbell. That was it,” Crump said. “And the owner of the home shoots through the door, hitting him in the head and then shoots him a second time.”

    CNN has not been able to reach the homeowner for comment. A lawyer was not listed in his previous booking report.

    On the night of the shooting, Lester was lying down in bed when he heard the doorbell ring and picked up his .32 caliber revolver, Lester told police, according to a probable cause statement.

    He then went to his home’s front entrance, which includes an interior door and a glass exterior door – both of which were locked.

    Lester opened the interior door and “saw a black male approximately 6 feet tall pulling on the exterior storm door handle,” Lester told police.

    “He stated he believed someone was attempting to break into the house, and shot twice within a few seconds of opening the door,” the probable cause statement reads.

    “He believed he was protecting himself from a physical confrontation and could not take the chance of the male coming in,” the document reads.

    Lester said he immediately called 911 after the shooting, according to the document.

    Police spoke with Ralph while he was being treated at a hospital, where he told them his mother asked him to pick up his brothers at 1100 NE 115th Street, according to the document, which notes the actual address they were staying at was 1100 NE 115th Terrace.

    When he arrived at the house on 115th Street, Ralph said he rang the doorbell and waited a while before a man eventually opened the door and immediately shot him in the head, causing him to fall, the document says.

    A police officer drives Monday past the house where 16-year-old Ralph Yarl was shot.

    While the teenager was still on the ground, the man then fired again, shooting him in the arm, Ralph told police.

    Ralph said he got up and ran to keep from being shot, and he heard the man say, “Don’t come around here,” the document says. He then went to multiple nearby homes asking for help and telling people to call police.

    The boy told police he did not pull on the door, according to the probable cause statement.

    Officers responded to the scene just before 10 p.m. after receiving reports of a shooting. When they arrived, they found the boy wounded in the street.

    Responding officers also found the front storm door glass at Lester’s home broken, with blood on the front porch and the driveway, according to the probable cause document.

    A neighbor, who asked not to be identified, told CNN she called 911 after Ralph came to her door, bleeding.

    Since the shooter’s location was unknown at the time, she was directed to stay inside her home by the emergency operator for her safety. She said she complied initially, then went outside with towels to help suppress the bleeding.

    “This is somebody’s child. I had to clean blood off of my door, off of my railing. That was someone’s child’s blood. I’m a mom … this is not OK,” she said.

    Protesters march Sunday in Kansas City.

    Crump said Ralph is still struggling with the trauma from the ordeal, but the family hopes for a full recovery because Ralph is young and strong.

    “He and his family are just happy that he’s alive after being shot in the head,” Crump told CNN.

    Ralph, a section leader in a marching band who could often be found with an instrument in hand, had been looking forward to graduating from high school and visiting West Africa before starting college, according to a GoFundMe started by Ralph’s aunt, Faith Spoonmore.

    “Life looks a lot different right now. Even though he is doing well physically, he has a long road ahead mentally and emotionally. The trauma that he has to endure and survive is unimaginable,” the aunt wrote in the fundraiser.

    The GoFundMe page, started to help the family with medical expenses, had garnered more than $2 million in donations by Monday night.

    Crump likened Ralph’s shooting to the shootings of 17-year-old Trayvon Martin in Florida and 25-year-old Ahmaud Arbery in Georgia – two unarmed Black Americans who were fatally shot by assailants who later claimed self defense.

    “We continue to fight to say you can’t profile and shoot our children, just because you have this ‘stand your ground’ law,” Crump said. “Unacceptable.”

    “Stand your ground” laws allow people to respond to threats or force without fear of criminal prosecution in any place where a person has the right to be. It remains unclear whether this will play a role in Lester’s case.

    Lee Merritt, another attorney representing Ralph and his family, told CNN Monday that the “stand your ground” action would not apply to Ralph’s case.

    “The stand your ground action, under the laws of Missouri, are completely inapplicable to this case, because there has been no conversation, not from the suspect, not from the victim and not from law enforcement, that Ralph Yarl, at 16 years old, ever posed a threat to this shooter,” Merritt said.

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  • A teenager was shot by a homeowner after going to the wrong house to pick up siblings, Kansas City police say | CNN

    A teenager was shot by a homeowner after going to the wrong house to pick up siblings, Kansas City police say | CNN



    CNN
     — 

    A teenager was shot and wounded by a homeowner after mistakenly going to the wrong home to pick up his siblings in Kansas City, Missouri, police said Sunday.

    Officers responded to reports of a shooting on the evening of April 13 and arrived to find a teenager who had been shot by a homeowner outside of a residence, according to Kansas City Police.

    The teen was taken to a local hospital, where he was in stable condition Sunday, police said.

    Police learned that the teenager’s parents had asked him to pick up his siblings at an address on 115th Terrace, but he accidentally went to a home on 115th Street, where was shot, according to police.

    The teen was identified as 16-year-old high school junior Ralph Yarl, according to a joint statement from civil rights attorneys S. Lee Merritt and Benjamin Crump, who have been retained by the victim and his family.

    “Despite the severity of his injuries and the seriousness of his condition, Ralph is alive and recovering,” the attorneys said in the statement.

    The homeowner – who has not been identified – was taken into custody and placed on a 24-hour hold, then released pending further investigation due to the need to obtain a formal statement from the victim and to gather additional forensic evidence, Kansas City Police Chief Stacey Graves said in a news conference Sunday.

    Under Missouri state law, a person can be held for up to 24 hours for investigation of a felony, at which time they are required to be charged or released, Graves said at the press conference.

    The shooting fueled a protest in Kansas City on Sunday, with hundreds gathering outside the home where Yarl was shot, according to CNN affiliate KSHB.

    Protesters marched as they chanted, “justice for Ralph” and “Black lives matter,” and carried signs reading, “Ringing a doorbell is not a crime” and “The shooter should do the time,” footage from CNN affiliate KMBC shows.

    “We demand swift action from Clay County prosecutors and law enforcement to identify, arrest and prosecute to the full extent of the law the man responsible for this horrendous and unjustifiable shooting,” the statement from the victim’s attorneys read.

    Asked whether the shooting may have been racially motivated, the police chief said, “the information that we have now, it does not say that that is racially motivated. That’s still an active investigation. But as a chief of police, I do recognize the racial components of this case.”

    Graves sought to assure the Kansas City community Sunday that the police department is committed to bringing justice to this case.

    “We recognize the frustration this can cause in the entire criminal justice process. The women and men of the Kansas City Police Department are working as expeditiously and as thoroughly as we can, to ensure the criminal justice process continues to advance as quickly as all involved and our community deserve,” Graves said.

    Kansas City Mayor Quinton Lucas said there will be a thorough investigation and review by the prosecutor’s office.

    “As a parent, I certainly feel for the mother of the victim and others in the family. My heart goes out to them,” the mayor added.

    A GoFundMe started by Faith Spoonmore, who identified herself as Yarl’s aunt, to help the family raise money for medical expenses had garnered more than $529,000 in donations as of Sunday night.

    Yarl had been looking forward to graduating high school and visiting West Africa before starting college, where he hopes to major in chemical engineering, his aunt wrote in the fundraiser.

    The teen is a section leader in a marching band and could often be found with a musical instrument in hand, Spoonmore wrote. Most recently, Yarl earned Missouri All-State Band honorable mention for playing the Bass Clarinet, according to a North Kansas City Schools’ newsletter in February.

    “Life looks a lot different right now. Even though he is doing well physically, he has a long road ahead mentally and emotionally. The trauma that he has to endure and survive is unimaginable,” the GoFundMe post reads.

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  • Some Black families say they are ‘whitewashing’ their homes to get higher appraisals | CNN

    Some Black families say they are ‘whitewashing’ their homes to get higher appraisals | CNN



    CNN
     — 

    Erica and Aaron Parker first had their Loveland, Ohio, home appraised in 2020. It was a competitive selling market, they had made several renovations to the home, and houses in the neighborhood were generally selling above the asking price.

    The couple expected the house to be valued at the list price of $525,000, but when the initial appraisal came back $60,000 short, the Parkers knew something wasn’t right.

    So they tried a different approach and also hired a different appraiser. The Parkers removed all items from the home that might signal they were Black, including artwork and family photos, and replaced them with photos and memorabilia borrowed from a White neighbor.

    The White neighbor sat in for the couple when the new appraiser came, and the result was a home appraisal of nearly $92,000 more than the first.

    “It was a weird feeling but we felt vindicated,” Erica Parker told CNN. “We were like, ‘Oh my God, we really were discriminated against.’”

    Parker’s account backs recent data showing that homes owned by Black people are significantly undervalued compared to White-owned homes. According to the Brookings Institute, homes in Black neighborhoods are valued at 23% less than those in non-Black neighborhoods despite having similar quality and amenities.

    Advocates for Black homeowners say this bias contributes to the racial wealth gap because it limits the financial returns of real estate for Black families.

    Some say it’s a systemic issue that industry leaders blame on a lack of diversity and a methodology that gives appraisers too much discretion in deciding the value of a home.

    According to the latest data from the US Bureau of Labor Statistics, 92% of property appraisers and assessors in 2022 were White and 4% were Black.

    Lydia Pope, president of the National Association of Real Estate Brokers, says her organization is working to recruit more Black people into the appraisal industry. The association hosts annual summits at HBCUs to encourage students to join the field, and Pope offers workshops and training for people already working in the real estate industry who want to learn how to do appraisals.

    “Our concern is that there aren’t enough Black appraisers in the business,” Pope says. “We just want to make a stand that we have to change the culture of appraising.”

    Pope calls it “disturbing” and “discouraging” that Black homeowners are having to “whitewash” their homes or conceal their race to get a higher appraisal.

    She says appraisers typically assess factors such as the condition of the property, upgrades and the value of recently sold comparable properties nearby.

    Jillian White, a Black appraiser who heads a consultancy that advises homeowners on disputing low appraisals, says, however, that appraisers are able to use their own discretion and opinion to make adjustments to the value of a home, and that leaves room for bias.

    “I think it’s systemic, implicit, explicit and structural,” White says of appraisal bias. “You have all these inflection points where making different decisions can lead to a very different result. The methodology is not so hard and fast that every appraiser is going to come up with the same value.”

    White says the industry needs to implement more guidance and protections so that appraisers have less autonomy in the process.

    Joshua Walitt, president of the National Association of Appraisers – which condemned discrimination among professional appraisers last year – says the methodology is not the problem. Instead, Walitt blames “bad apples” working in the profession for instances of bias.

    And even if there is bias, Walitt says it should have no influence on appraisal results given that these are based on market data.

    “If we follow methods and techniques which is what we focus on in education, then what it does is it pushes aside any bias that a person could have,” Walitt says. “If there is bad behavior then we need to let the investigations go through and take care of that.”

    Still, Walitt acknowledges that there is a need for more diversity in the industry. He says he is committed to expanding recruitment and supports programs such as Practical Applications of Real Estate Appraisal (PAREA) that make it easier for people to gain experience and join the industry.

    The issue of bias in home appraisals has gained the attention of President Joe Biden’s administration, which launched the Action Plan to Advance Property Appraisal and Valuation Equity (PAVE) last year to promote equity in the home appraisal process. In late March, the administration announced progress in this effort including publishing guidance so Federal Housing Administration (FHA) borrowers know how to request a “Reconsideration of Value” if they suspect bias in their appraisal.

    White says she wants Black homeowners to know their options when appraisals come in low. She advises her clients to appeal the first appraisal and if that doesn’t work request a second appraisal. If nothing changes, White says homeowners can file complaints with the Department of Housing and Urban Development, the state appraiser board, or the Consumer Financial Protection Bureau.

    Claims of bias have also to led to successful legal challenges from some homeowners. In March, San Francisco area Black couple Paul Austin and Tenisha Tate-Austin settled a discrimination lawsuit against a real estate appraisal company after their home was undervalued by nearly $500,000. As part of the settlement, the couple is set to receive an undisclosed amount of money and the firm is required to attend housing discrimination prevention training.

    “Having to erase our identity to get a better appraisal was a wrenching experience,” Tate-Austin said in a statement released by her lawyers to the San Francisco Chronicle. “We hope by bringing attention to our case and this lawsuit settlement, we can help change the way the appraisal industry operates.”

    Erica Parker says they ultimately sold the house in Loveland for $507,500 and bought a new home in Westchester, Ohio. However, she filed a discrimination complaint with both HUD and the Ohio Department of Commerce. Neither has yet been settled, she said.

    She says her experience only affirms that racism still exists in real estate.

    “We want the bank and appraisal company to be held responsible for what they did and to prevent this from happening to other people of color,” Parker said.

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  • Homeowners: Here’s how to protect your investment from a tornado

    Homeowners: Here’s how to protect your investment from a tornado

    In aftermath of the deadly tornadoes that ripped across parts of the Midwest and South this week, homeowners may rightfully be nervous about whether they are financially protected against potentially devastating storms.

    The last three years have had the highest insured losses on record from natural disasters, according to a recent report from Aon. Tornadoes are just one of the severe weather events that can destroy or damage property. Some 1,200 of them hit the U.S. yearly, and the phenomenon has been reported in all 50 states. 

    A recent study suggests that these storms may be occurring more frequently because of global warming, as well as shifting eastward toward the densely populated Southern states of Alabama, Mississippi and Tennessee.

    Before a storm strikes, there are steps homeowners or renters might take to make sure they’re financially protected tornadoes.

    Homeowners insurance should have you covered

    Wind damage, including that from tornadoes, thunderstorms and straight-line winds known as “derechos,” is covered as part of a standard homeowner’s policy. 

    “Tornado coverage is not a separate policy that you need coverage for — it’s covered in your standard policy,” said Karen Collins, vice president of property and environmental at the American Property Casualty Insurance Association (APCIA), an industry group. 

    Review your homeowner’s policy. One of the first few pages, titled “declarations,” will list your coverage limits and how much money you might collect in a claim. Covered items include reconstruction costs, as well as replacement of destroyed belongings inside your house — referred to as “contents coverage” or “personal property coverage,” Collins said. There should also be coverage for your living expenses, such as a hotel, if you need to relocate while your house is being repaired.

    What are the deductibles? 

    Most homeowners insurance policies come with a deductible — a certain amount of money you need to pay for repairs before your coverage kicks in. You might have a flat deductible or, as is becoming more common, the policy might specify different deductibles for certain situations.

    “In a lot of areas, insurers have put wind deductibles in place,” said Amy Bach, executive director of United Policyholders, an advocacy group for insurance consumers. “Some of them will have wind velocity clauses, where if the wind gets to a certain speed the deductible applies.”

    Often, instead of being represented as a dollar amount, the wind deductible will be expressed as a percentage of the whole policy — that can amount to a significant sum.

    “Those deductibles are a bigger chunk of change than they used to be,” Bach said.


    Tornado kills at least 5 in southeastern Missouri

    05:04

    She advises getting on the phone with your insurance company before a potential disaster to walk through your policy.

    “You want to know, ‘Do I have a wind deductible?’ and ‘Can I buy a policy that has a lower deductible or has a flat deductible?’ That’s a little better,” she said.  

    Actual costs or replacement costs?

    An insurance policy will cover your belongings for either their actual value or their replacement cost — for example, the price of new furniture, rugs and any appliances you may need to buy if your current home is destroyed. 

    Think of it this way: Your 12-year-old sofa may only be worth $500 on the market, but if your belongings are destroyed and you need to replace it, you could shell out $2,000 or more for a new couch. 

    For that reason, replacement-value policies tend to be more expensive, but they can also save you some hassle. This type of policy could make even more sense today, as the price of home furnishings has skyrocketed in recent years. 

    Think about flooding — even outside the flood zone

    During most tornadoes, flooding isn’t an issue, which is a good thing given that floods require dedicated flood insurance.

    Water damage coming from above, on the other hand, should be covered by a standard policy, said Loretta Worters, spokesperson for the Information Insurance Institute.  

    “Flooding is considered a rising body of water, so if it’s coming from the ground up, you would not have coverage,” she said. However, if a tornado tears off part of your roof and your house is damaged by rain, that should be “a covered peril,” she said.

    Still, homeowners should consider additional flood coverage if they live in a low-lying area, or somewhere that gets heavy rains. With climate change making precipitation more intense, many places are experiencing flooding for the first time. A severe storm that causes tornadoes could also create flash floods. 


    Homeowners without flood insurance face uncertainty after Hurricane Ian

    02:05

    Bach also noted that insurance companies have become more aggressive about defining certain types of water damage as flooding — such as when a storm damages part of the house’s sewage system and water backs up into the house — and refusing to cover it. That’s a possible scenario that you should run through with your insurance company, she said. 

    “Before you have a loss, call your insurance company and get sewer-and-drain backup coverage,” she said. “If you have a sump pump, ask them if it’s covered if the sump pump fails.” 

    Such coverage is usually available as an add-on, or “endorsement” in industry language.

    Renters insurance: Necessary, and fairly cheap

    If you rent, it may be wise to purchase a separate renters insurance policy, which should cover your belongings in a range of scenarios — storms, break-ins or other unexpected events.

    A homeowner’s policy will cover the owner’s stuff, but your landlord’s policy won’t extend to your belongings. Renters insurance often also covers temporary lodging if you have to leave your home in a disaster.

    “It’s a couple hundred dollars a year, and it makes a big difference,” Worters said. 

    Home office? You may need an additional policy

    If you have a side gig or a home office that you use for work, make sure it’s explicitly protected if a storm strikes. This could mean getting an add-on for your insurance policy from your home insurer.

    “Most homeowners’ policies will have a cap on business property, and it’s something like $1,500, $2,500. So if you have more than that, you’re out of luck,” Bach said.


    Recovery begins after deadly tornadoes slam U.S.

    04:52

    You could also take out separate business coverage, which will protect your side gig from liability if you run into legal problems, like being sued by a disgruntled customer or bystander.  

    Think about your car

    If you have a car, consider shelling out for additional coverage in the case of a disaster. Non-driving damage is covered only under a “comprehensive” policy, colloquially known as “full coverage.”

    “If you have debris that falls on the car, or hail or even flooding, that’s covered under a comprehensive policy,” said Collins of the APCIA. “And if you need to be in another vehicle while [yours is] being repaired, you’ll have a little bit of coverage for that as well.”

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  • Norfolk Southern balks at compensating homeowners in East Palestine | CNN Business

    Norfolk Southern balks at compensating homeowners in East Palestine | CNN Business


    Washington, DC
    CNN
     — 

    Jim Stewart was getting ready to sell his home in East Palestine, Ohio, and retire. Then came the derailment of a Norfolk Southern train on February 3, releasing toxic chemicals into the air and nearby water, and he fears crashing the value of his home.

    He and his wife hoped to put their three-bedroom home on the market this spring, as prices were still high and inventory was low. Alternatively, they talked about his son’s family buying a house that was on the market down the street from Stewart.

    But even though state officials are saying the water is safe to drink, convincing potential homebuyers otherwise is an uphill battle.

    “Since the derailment, I lost all those options,” he said. “Who is going to buy contaminated land? The older people are willing to stay and live it out. The younger bunch, they are smarter. They’re thinking of their families. I wouldn’t want my grandchildren here. We don’t know if the ground is going to be good enough to grow grass. There are too many unknowns.”

    Stewart, 65, recently voiced his fury and sadness about what he lost to Norfolk Southern CEO Alan Shaw on a February 22 Town Hall about the derailment on CNN.

    “You burned me,” he told Shaw. “We were going to sell our house. Our value went phoom,” pointing his hands down.

    Shaw was asked point blank by another resident if Norfolk Southern was ready to buy Stewart’s house, he replied only, “we’re going to do what’s right for this community.” That wasn’t satisfactory for Stewart or many of the other participants at the Town Hall.

    “I lost everything now,” Stewart says he told Shaw.

    Stewart works as a manager at a commercial baking company.

    “I worked hard. I’m still working,” he says he told Shaw. “I’m in the 44th year at my job. I wanted to get out. Now I’m just stuck.”

    Stewart fears he lost a tremendous amount of the value of his home, which he bought in 2016 for $85,000.

    The property was worth about $135,000 a month ago, according to an estimate from Zillow. Lack of transactions since then make a current estimate difficult.

    “I’ll never get that. I’ll be lucky to get what I paid for it, if that,” he said of the estimate. In addition, Stewart believes it would cost a lot to do the repairs and tests to ensure the home is safe.

    “At whose expense? That’s the biggest issue right now,” said Stewart. “At whose expense are we going to do things to make sure it’s okay?”

    Stewart isn’t the only one that was angry with Shaw and Norfolk Southern for the railroad’s refusal to offer to compensate the community for the property value that has been destroyed by the derailment.

    At Thursday’s Senate hearing on the crash, Sen. Ed Markey, a Massachusetts Democrat, asked Shaw four different times to commit to compensating homeowners, only to hear Shaw repeatedly reply, “Senator, I’m committed to do what’s right.”

    Markey said that wasn’t an acceptable answer.

    “Will you commit to insuring that these families, these innocent families do no lose their life savings in their homes and small businesses? The right thing to do is to say, ‘Yes we will.’” Markey told Shaw. “These families want to know long term are they just going to be left behind. Once the cameras move on, once the national attention dies down, where will these families be? I think they’re going to be in the crosshairs of the accountants of Norfolk Southern saying ‘We’re not going to pay full compensation.’”

    Paying the homeowners and businesses wouldn’t necessarily be difficult for Norfolk Southern.

    With a population of about 5,000 people, there are roughly 2,600 residential properties in East Palestine according to Attom, a property data provider. The average value of a property there in January of this year, prior to the derailment, was $146,000, according to Attom.

    Taken together, the value of all residential real estate in the town adds up to about $380 million, including single family homes and multi-family properties.

    Those values are only a fraction of the money that Norfolk Southern earns. Last year it reported a record operating income of $4.8 billion, and a net income of $3.3 billion, up about 9% from a year earlier. It had $456 million in cash on hand on its books as of December 31.

    It’s been returning much of that profit to shareholders, repurchasing $3.1 billion in shares last year and spending $1.2 billion on dividends. And it announced a 9% increase in dividends just days before the accident.

    A year ago its board approved a $10 billion share repurchase plan, and it had the authority to buy $7.5 billion of that remaining on the plan as of December 31.

    Asked by Sen. Jeff Merkley, an Oregon Democrat, at Thursday’s hearing, “Will you pledge to no more stock buybacks until a raft of safety measures have been completed to reduce the risk of derailments and crashes in the future,” Shaw again dodged the question by answering only with, “I will commit to continuing to invest in safety.”

    And the company also invests a great deal of money in lobbying, spending $1.8 billion on lobbying in 2022, according to OpenSecrets.org, which tracks lobbying and political contributions expenditures.

    Those lobbying expenses also came under attack by senators at the hearing, especially since Shaw would not commit to supporting the bipartisan bill introduced in the Senate since the derailment to improve railroad safety. Asked if he would support or oppose the legislation, Shaw wouldn’t endorse all of the provisions of the bill, but he responded “we are committed to the legislative intent to make rail safer.”

    A big payout probably isn’t what many in East Palestine are looking for, said Jim Warren, manager and co-owner of Kelly Warren and Associates Real Estate Solutions, in Boardman, which is about 15 miles away from East Palestine. They just want a home that’s safe to live in and to be made whole on its value, he said.

    “The people around here don’t want a lot,” he said. “We don’t chase the flashy items like other places in the world. We want to grow up, raise our kids, make a living, and have a nice place to live, that’s all we want.”

    This area, like the rest of the country, saw the real estate market heat up over the past few years with multiple offers on homes and properties selling over the asking price. But, Warren said, unlike other parts of the country the market stays fairly steady in this part of Ohio.

    “Our area doesn’t move up as much and it doesn’t move down as much,” he said. “We don’t have the big swings.”

    Warren’s firm currently has two listings in the town.

    “That’s no more nor less than usual,” he said. There are only ever about ten properties on the market there, he said.

    But, he added, “if your property is contaminated, that is a concern for yourself and for any buyer.”

    As with any real estate purchase, an appraisal and tests for safety would need to be done for homes in East Palestine. But like Stewart, Warren said it is not yet clear who will pay for the additional tests on water and ground contamination for that peace of mind.

    “For all we know, the county might cover it, or the EPA or Ohio state government. That remains to be seen,” he said.

    Overall, Warren said, he expects homes to continue to be bought and sold in East Palestine.

    “We don’t foresee the market tanking, we foresee steady growth,” he said. “After all the hype is gone, we are still living here. We’re going to have to figure it out because this is our home.”

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  • Many more single women than men are homeowners. Here’s why.

    Many more single women than men are homeowners. Here’s why.

    Kyla Wright’s original plan was to finish her master’s degree, move out of her parents’ home and rent an apartment somewhere in Detroit. But once she started looking for rental units, her mother — a landlord — suggested buying instead. 

    Wright took the advice and, in December 2021, she bought a $99,000 home in the Detroit suburb of Southfield. Wright, now 25, is the only person in her social circle who owns a home. But on a national scale, what she has done is increasingly common.

    Women who live alone, like Wright, own millions more homes than their male counterparts, despite typically earning less than men do. 

    Kyla Wright of Southfield, Michigan bought a two-bedroom home after prompting from her mother. Wright is one of millions of single women in the U.S. who own a home. 

    Ninotchka Jackson-Wright


    On average, women earn 83 cents for every dollar a man makes — yet single women own roughly 10.7 million homes, compared to 8.1 million for single men, according to a recent analysis from LendingTree that looked at 2021 Census data. That’s a surprising statistic considering the financial hurdles women have historically faced, said Jacob Channel, LendingTree’s senior economist and the author of the analysis.

    This gap exists in nearly every state in the U.S., LendingTree found.

    Building wealth

    The reasons for women’s unequal homeownership vary by age group. Among older women, longer life expectancies are a factor, said Rutgers professor James Hughes, who studies demographics and housing.

    “If women become a widow and the couple previously owned a house, most likely the homeownership shifted from male to female,” Hughes said, noting that women are expected to live until age 81 on average, compared to 76 for men. 

    Earlier in life, women have a different motivation for pursuing homeownership, said University of Southern California professor Dowell Myers, who studies how demographics affect housing. 

    Younger women who are approaching the peak of their careers earn salaries nearly equal to men their age. They’re well aware of the wage and wealth gap that persists between genders — and buying a home is one way they try to counter it, Myers said. 

    “They make an effort to try and keep up,” he said. “Homebuying is a good investment and it means more to them personally than men.”

    That was true for Wright, who said having a long-term investment under her belt provided additional motivation to buy. Wright quoted her mother, who watches renters pay month after month without building home equity. 

    “The way she broke it down for me was this: ‘They will rent from me for years and years and years, and the only thing they have to show for it is receipts,’” Wright said.

    327752909-1359096891568548-1092778007862469588-n.png
    Jessica Lewis of Rochester, New York, bought her home in 2009 using a first-time homebuyers’ program. She now calls it the best decision she ever made.

    ESL Federal Credit Union


    The same motivation pushed New York resident Jessica Lewis to buy a home in 2009. Lewis said she was looking for an affordable apartment in the wake of the 2008 housing crash — but quickly realized a mortgage on a home would be cheaper. With the help of a first-time homebuyers’ program, she paid $64,000 for a three-bedroom home in Rochester, a move she now calls “the best decision I ever made.”

    “To me, it was a way of investing in myself rather than making someone else rich, like a landlord,” Lewis, 37, told CBS MoneyWatch.

    The role of a degree

    Hughes noted that more women today are college-educated than men, which gives more of them the opportunity to buy a home on their own, since college degrees translate to earning more money later in life. “Women have more wherewithal now than, say, 20 years ago, even though that (wage) gap exists,” he said.

    Channel, of LendingTree, first noticed that women out-owned men in 2018. In the years that followed, the gender gap has persisted. However, the full effect of the pandemic homebuying frenzy still isn’t clear, he noted, since the most recent Census data available is from 2021.

    To be clear, a vast majority of owner-occupied homes in the U.S. belong to couples, Channel said. Women dominate ownership in what’s left over, particularly in states like Alabama, Louisiana and South Carolina. Those Southern states typically have cheaper home prices, making it easier for a single income to handle mortgage payments, Channel said.

    Delaware, Florida and Maryland have the widest gender gap among single homeowners, LendingTree found. In Florida, that translates into 262,000 more single women owning homes than men. Single men out-own homes in only North and South Dakota — states where the job market skews toward male-dominated professions, such as oil rigging and construction.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • Renew Missouri Homes Launches to Increase the State’s High-Performing Homes

    Renew Missouri Homes Launches to Increase the State’s High-Performing Homes

    Press Release
    –

    Oct 12, 2022


    COLUMBIA, Mo., October 12, 2022 (Newswire.com)
    –
    Renew Missouri, the Missouri Department of Natural Resources’ Division of Energy, and Pearl Certification are excited to announce the official launch of the Renew Missouri Homes program.

    Renew Missouri Homes, a public-private partnership between Renew Missouri, the Missouri Department of Natural Resources’ Division of Energy, and Pearl Certification, will help ensure that energy-efficient, high-performing homes in Missouri are properly valued when they are sold.

    The program makes a home’s high-performing features — like renewables, insulation, efficient heating and cooling systems — visible and engaging to homebuyers through the state’s Missouri Home Energy Certificate, supported by Pearl Certification. The result is that these homes will sell for higher prices — creating a powerful incentive for other Missouri homeowners to improve the performance of their homes by adding energy-efficient features and renewables. 

    Homes certified through the Renew Missouri Homes program can also be listed on the Green Building Registry, a national registry for high-performing homes, through a partnership with Earth Advantage.

    “The Renew Missouri Homes program is a vital extension of the great work the DNR Division of Energy is doing throughout the state,” said Andy Popp, manager of the Missouri State Energy Program. “This program provides an easy-to-use framework for Missourians to create more comfortable, efficient, and sustainable homes that benefit the entire state.”  

    With the launch of Renew Missouri Homes, powered by Pearl, on Oct. 1, 2022, Missouri homeowners now have access to a free homeowner portal called Green Door to build custom plans that organize and track home energy upgrades, schedule regular home maintenance reminders, and connect with vetted contractors to perform energy upgrades. Qualified builders, home improvement contractors, appraisers, and real estate agents who earn admittance into the network gain access to Renew Missouri Homes’ dedicated business development team, committed to helping them grow their businesses through supporting the high-performing home market. Industry professionals can apply to join the Renew Missouri Homes Network on the program’s website. https://renewmohomes.com/

    James Owners, Renew Missouri’s executive director, said, “Renew Missouri knows that energy efficiency is the cornerstone of realizing a clean energy future. The Renew Missouri Homes program will be a driving force in making Missouri homes more efficient, save homeowners on their utility bills, and drive energy-efficiency investments across the state. We are honored and proud to have our namesake represent the program as we firmly believe in bringing energy efficiency to all Missourians.”

    “Missouri is truly leading the country by launching the Renew Missouri Homes program,” said Robin LeBaron, co-founder and president of Pearl Certification. “We applaud and are thrilled to support the commitment to transforming Missouri communities for generations.”

    “Through this groundbreaking program, homeowners will get the tools and resources they need to create homes that are more comfortable, healthy, and sustainable by connecting with our vetted network professionals, who understand how to build, improve, appraise, and sell high-performing homes,” said Cynthia Adams, Pearl’s co-founder and CEO.

    Missouri homeowners and industry professionals interested in learning more about Renew Missouri Homes, powered by Pearl, should visit https://renewmohomes.com/ or email renewmohomes@pearlcertification.com. 

    About Renew Missouri: Renew Missouri, a 501(c)(3) not-for-profit, advocates for clean energy policies that will benefit all Missourians. In support of renewable and energy-efficiency interests, the organization presents to the Public Service Commission, the Missouri Legislature, and county and city offices to advance energy policy and legislation. www.renewmo.org

    About The Division of Energy: The Missouri Department of Natural Resources’ Division of Energy is focused on affordable and reliable energy generated in the state of Missouri. The division assists, educates, and encourages Missourians to advance the efficient use of diverse energy resources to drive economic growth, provide for a healthier environment and achieve greater energy security for future generations. https://dnr.mo.gov/about-us/division-energy 

    About Pearl: Pearl Certification is the gold standard in high-performing home certifications, bringing visibility to the valuable features that make them healthy, safe, comfortable, and energy- and water-efficient. Pearl is the only national sponsor of the U.S. Department of Energy’s Home Performance with ENERGY STAR® program and is a partner with the National Association of REALTORS® Green Resource Council. Pearl has certified and provided appraisal addenda on over 100,000 homes in 44 states and Washington, D.C. Pearl Certified homes sell on average for 5.5% more than comparable homes, according to independent appraiser studies. https://pearlcertification.com/ 

    Source: Pearl Certification

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  • Homeowners without flood insurance face uncertainty after Hurricane Ian

    Homeowners without flood insurance face uncertainty after Hurricane Ian

    Homeowners without flood insurance face uncertainty after Hurricane Ian – CBS News


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    Many homeowners in Florida did not have flood insurance before Hurricane Ian due to the high costs. They’re now facing uncertainty as they rebuild their lives. Manuel Bojorquez has more.

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  • Mortgage rates march towards 7%, reaching highest level since 2007

    Mortgage rates march towards 7%, reaching highest level since 2007

    The numbers: Mortgage rates continue to march towards 7%, continuing to pressure potential homeowners looking to buy a home. 

    The 30-year fixed-rate mortgage averaged 6.7% as of Sept. 29, according to data released by Freddie Mac
    FMCC,
    +0.75%
    on Thursday. 

    Mortgage rates are up as the Federal Reserve pushed key interest rates up to deal with the worst inflation the country has seen in 40 years. 

    That’s up 41 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%. 

    The rise in rates is bad news for prospective buyers, as it potentially adds hundreds of dollars to their mortgage payments.

    Mortgage rates are now at highs last seen since mid-2007. To put the latest rate in perspective: A year ago, the 30-year was at 3.01%.

    “Mortgage rates are now at highs last seen since mid-2007. To put the latest rate in perspective: A year ago, the 30-year was at 3.01%.”

    Bloomberg’s chief economist Michael McDonough said a $2,500 monthly mortgage payment — with 20% down — would have gotten a buyer a $758,000 home last year.

    This year? You’d get a lot less house — with $2,500 per month, you’d only be able to afford a $476,000 home, he wrote on Twitter
    TWTR,
    -1.12%    .

    The median price of an existing home in the U.S. was $389,500 in August, down from $403,800 the previous month, the National Association of Realtors said.

    The average rate on the 15-year mortgage also rose over the past week to 5.96%. The adjustable-rate mortgage averaged 5.3%, up from the prior week.

    “The uncertainty and volatility in financial markets is heavily impacting mortgage rates,” Sam Khater, chief economist at Freddie Mac, said in a statement.

    Khater added that Freddie Mac’s survey of lenders revealed a large dispersion in rates, so home buyers should shop around with lenders to find a good quote.

    Mortgage applications also fell in the latest week, as cautious buyers continue to pull back as rates march towards 7%. 

    The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.784%
    rose slightly above 3.8% in morning trading on Thursday.

    Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com

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