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Home owners beware: “Your home owner’s insurance now probably covers less while costing more,” The Wall Street Journal reports.

Home owner deductibles have been rising the last few years, as home owners who may have once seen $250 to $500 a claim soar to $1,000 to $2,500 a claim in recent years.

There’s been a move by the industry to go to percentage-based deductibles, which have caused prices to rise. For example, home owners may have once had a $500 to $1,000 deductible but now have a form of a deductible of 2 percent of the insured value of a home for items like wind and hail damage. That could mean that insurance may only cover half the cost of a roof replacement.

What’s more, more insurance companies are issuing more limits on what all they will pay for in replacing a home.

Texas home owners pay the highest insurance premiums in the country, but a consumer group in the state found that newer policies are covering less, like limiting coverage on plumbing leaks or damage to foundations.

With insurance policies squeezing more home owners’ budgets, housing experts say home owners need to take an active role in reviewing their policy to find out what all is covered. Also, they say that home owners need to think twice before making several claims.

“One large claim will affect you less than multiple small ones,” The Wall Street Journal article notes. “Of course, you buy insurance to be covered, so you are always free to file a claim. But you should know that insurers keep close track of claims and will penalize you for making too many, even if you just happen to hit a string of bad luck.”

source:  Wall Street Journal


Home prices are inching higher with mortgage rates expected to soon follow, and more potential home buyers are weighing whether to jump in this year or risk paying more by purchasing a house later, The New York Times reports. 

Home prices are rising rapidly in some areas, particularly the Sunbelt states. The 30-year fixed-rate mortgage is expected to continue to move to higher rates later this year, some economists say. 

For buyers who are able to qualify for financing, “getting in a little earlier would be preferable before prices and rates rise too much,” says Lawrence Yun, chief economist for the National Association of REALTORS®.

But with housing inventories so tight in many areas, some buyers may try to wait until more homes come on the market. Buyers may need to make a trade-off: Act now to get the best financial deal or wait for more homes to come on to the market but risk paying a bit more, Yun told the paper. 

source:  New York Times


Appraisers and home owners' perceptions of home values are growing farther apart, according to Quicken Loans' latest Home Price Perception Index. The index, reflecting April data, shows home owners are overestimating the value of their homes by 0.69 percent when compared to appraisers' values. This is the third consecutive month in which appraiser opinions fell below home owner estimates.

"While it is not surprising to most appraisers that home owners are overestimating their home's value on a national average, we should always make note of the direction the trend is heading to help set expectations for home buyers and those looking to refinance," says Quicken Loans Chief Economist Bob Walters. "There is nothing more disappointing to a home owner than learning that the value of their home is less than they expected."

The index shows that appraisers' opinions were below home owners' in the Northeast (0.58 percent), South (0.7 percent), and Midwest (1.23 percent). In the West, appraiser opinions were 0.08 percent higher than home owners. That was also true in metro areas such as San Jose, where appraiser opinions were 6.73 percent higher than home owners, San Francisco (5.47 percent) and Denver (4.09 percent).

On the other hand, home owners in Kansas City, Mo., tended to overestimate the value of their homes by the most in the country — 2.96 percent — compared to appraisers' values, followed by Philadelphia (2.02 percent) and Charlotte, N.C. (1.4 percent).

source:  Quicken Loans


Bathroom remodeling once again edged out kitchens as the most popular type of remodeling project, according to a new survey by the National Association of Home Builders.

Through 2009 kitchens had dominated home remodeling projects as the most common, but that trend switched in 2010 and then again in 2014 as bathroom remodeling takes the throne.

Bathroom remodeling was cited as the most common remodeling project in 2014 by 78 percent of remodelers, just barely edging out kitchen remodels at 77 percent, NAHB reports. Other types of remodeling projects trail kitchens and baths by a wide margin.

The following is a breakdown of the most common remodeling jobs in 2014, according to NAHB:

  1. Bathroom remodeling
  2. Kitchen remodeling
  3. Windows/door replacement
  4. Whole house remodeling
  5. Room additions
  6. Repairing property damage
  7. Handyman services
  8. Decks
  9. Siding
  10. Finished basement
  11.  Roofing
  12. Bathroom additions
  13. Enclosed/added porch

source:  National Association of Home Builders Eye on Housing blog


Since the housing crash in 2008, the number of renting households has soared. Within the next decade, 5 to 6 million new renter households are expected to be formed, according to the National Association of REALTORS®.

Much of that increase may occur in the next two years.  Within that time, the U.S. Census Bureau predicts that renter households will grow from 38 million to 41 million. 

"In general, across the country there are more renters now than there were two or three years ago," says Wally Charnoff, CEO of RentRange.

Property management companies are booming, too. Officials with Real Property Management say the company has doubled in size over the past two years. The company has 230 offices in 47 states and adds an average of eight new franchises per month. 

"Profound changes in the housing market have created significant demand for property management companies like ours," Kirk McGary, CEO of Real Property Management, told HousingWire. "And it doesn't look like that's changing anytime soon."

Charnoff adds that location may be a big driver for renters. With a shortage of for-sale homes nowadays, some families are being driven to rent in order to be able to live in a specific neighborhood with good schools, he notes. “Institutional investors have provided a lot of readily available property,” he says. 

However, he adds that rising mortgage rates may prompt more on-the-fence renters to jump into home ownership before housing affordability moves lower. 

source:  HousingWire


To keep monthly mortgage payments more affordable, more home buyers are reaching deeper into their pockets to make larger down payments, according to a survey by LendingTree of 600 home buyers. 

Sixty-four percent of prospective home buyers say they expect mortgage rates to rise, and 68 percent say they expect home prices to rise in the next 12 months, according the LendingTree survey. That has prompted 57 percent of respondents to say they plan to make a down payment of 15 percent or more on their home purchase. Meanwhile, 44 percent say they will have a down payment of less than 15 percent. 

Also for affordability, the majority of home buyers surveyed said they prefer fixed-rate mortgages, particularly 30-year fixed-rate mortgages (45%), compared to 15-year fixed-rate mortgages (36%) and adjustable rate mortgages (7%). 

"The housing market is stabilizing and financing is becoming more available for potential home buyers,” says Doug Lebda, founder and CEO of "Increasing home prices are providing would-be sellers with the confidence needed to take action, while rising interest rates are placing a sense of urgency on potential home buyers. Together this creates a unique window of opportunity for buyers and sellers to take advantage of the market while home prices and rates are still reasonably affordable.”

source:  Realty Times


CEOs of the largest companies renting out single-family homes say they plan to raise rents up to 5.7 percent this year.  Investors are switching their focus from buying properties to optimizing the revenue from the thousands of properties they bought, taking advantage of the increased demand for rental homes, Bloomberg reports.

“In the 2015 rental season, we’re really seeing the ability to move rents,” David Singelyn, chief executive officer of American Homes 4 Rent—the largest publicly-traded single-family landlord, with about 35,000 homes—said at a recent conference in Miami Beach, Fla.

Large-scale investors—those who purchase at least 10 properties a year—have spent about $68 million snatching up 528,000 single-family rental homes since 2011, according to a report last month by Haendel St. Juste, a Morgan Stanley analyst. Now the CEOs of Silver Bay, Starwood Waypoint, American Residential Properties, and Blackstone Group all say they plan to raise rents this year.

“We are focusing aggressively on rent bumps,” Stephen Schmitz, American Residential Properties CEO, said during a panel discussion. “There’s a supply imbalance in some markets. The same thing that keeps occupancy high also drives rents.” Schmitz says they plan to bump up rental rates by 4 percent on renewals and up to 5.7 percent for new tenants.

source:  Bloomberg


More than half of young adults surveyed recently say they are willing to spend up to $150 more per month in order to stay in an apartment they love, according to a new survey of 1,000 millennial renters conducted by Nearly one in four respondents said they'd be willing to pay an extra $400 a month to stay in their apartment.

They may have to pay extra soon too. Rental rates are rising nationwide and more landlords say they plan to increase rates more in the coming year.

The average monthly rent for single-family homes was $1,286, marking a 5.4 percent year-over-year increase, according to Real Property Management and RentRange's latest report.

But the question remains whether millennials will be able to afford any higher rents. Twenty-two percent of millennials were found to already be spending up to 40 percent of their annual income on rent. More than one in three millennial renters also reported getting financial help, with 24 percent getting parental support, 9 percent receiving government financial support, and 6 percent say they've depended on the "kindness of others."

source:  HousingWire


Arming today’s youth with greater financial knowledge is the key to making sure there is no repeat of the housing and economic crisis, Richard Cordray, director of the Consumer Financial Protection Bureau, said at a meeting of the President’s Advisory Council for Financial Capability for Young Americans.

“Now more than ever, as we look back at the deepest financial and economic crisis of our lifetimes, people need the know-how to manage the ways and means of their lives,” Cordray said. “The choices they face in the financial marketplace, with instruments like mortgages, credit cards, auto loans, student loans, credit reporting, and more, are increasingly complex.”

Cordray said that childhood education is crucial to shaping housing’s future and should include:

  • Financial education: Cordray said that financial education needs to begin at a young age, with the benefits of compound interest being taught in math classes; economic costs and risks in social studies classes; and overall curriculum involving how to use and protect money.
  • Experimental learning: Cordray said that financial management should be practiced through experimental learning, whether that’s through simulating a banking experience or a computer game that teaches financial skills.
  • Integration into standardized tests: Financial education concepts should be integrated into standardized tests, which would then make it more of an incentive for more teachers to teach such concepts, Cordray said.
  • Parent involvement:  “Parents help set expectations, and research has shown that if parents engage their children by establishing a savings account for them, these children are seven times more likely to attend college than those without a savings account,” Cordray said.

source:  HousingWire 


Tighter mortgage standards and rising foreclosures have driven up the number of rental properties, and more real estate agents have taken advantage of the shift and have moved into property management. 

Given that it can be easier to find renters instead of buyers in many markets, the National Association of Residential Property Managers reports a nearly two-fold jump in members over the last five years to an all-time high of 3,400. 

Census data show that renter household formation has outpaced new owner-occupied homes over the last four years. 

Property managers generally make less than real estate agents — about $1,800 per property per year versus $10,000 for one sale — but they have steady business in the current market, although their fees are on the decline in some areas due to increased competition.  Even so, some experts believe that property managers could play a big role in helping the housing market recover — especially if banks employed skilled property managers to handle their portfolios.

source:  Bloomberg BusinessWeek