Navigating the Impact of Environmental Factors on Property Values

As our world becomes increasingly conscious of sustainability, it’s crucial to understand how the environment can shape the value of your home or potential investment. Let’s explore the various ways in which environmental factors play a significant role in the real estate market.

Location, Location, Eco-location:

The old adage “location, location, location” takes on a new dimension when considering environmental factors. Proximity to parks, nature reserves, and green spaces can significantly enhance property values. Homebuyers are increasingly seeking homes in areas with a strong connection to nature, promoting a healthier and more sustainable lifestyle.

Climate Change and Extreme Weather:

With the escalating impact of climate change, the vulnerability of properties to extreme weather events is a growing concern. Homes located in areas prone to flooding, hurricanes, or wildfires may experience a decline in value as the frequency and intensity of these events increase. Buyers and sellers alike need to factor in the potential risks associated with climate-related hazards.

Energy Efficiency and Sustainability:

Green homes are on the rise, and so is the demand for energy-efficient properties. Homes equipped with solar panels, energy-efficient appliances, and sustainable construction materials not only contribute to a healthier planet but also command higher property values. Buyers recognize the long-term cost savings associated with eco-friendly features, making these properties more appealing.

Air and Water Quality:

Clean air and water are fundamental to a healthy living environment. Areas with high air pollution or water contamination issues may experience a decline in property values. Conversely, regions known for their immaculate air and water quality become sought-after locations, reflecting positively on home values.

Environmental Regulations and Zoning:

Government policies and regulations aimed at preserving natural habitats and controlling development can have a significant impact on property values. Zoning laws that restrict certain types of construction or protect green spaces contribute to a more attractive living environment, positively affecting nearby property values.

Transportation and Commuting:

Access to efficient public transportation or proximity to job centers can influence property values. As the world shifts towards sustainable transportation options, homes located near public transit or in walkable neighborhoods may experience increased demand and higher values.

In the ever-evolving landscape of real estate, understanding the interplay between environmental factors and property values is crucial. Whether you’re a prospective homebuyer, seller, or investor, recognizing the impact of eco-friendly features, climate considerations, and regulatory environments can empower you to make informed decisions. As we move towards a greener future, the connection between the environment and real estate values will undoubtedly continue to shape the way we live and invest.

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

U.S. home prices rose in May, but at a slower pace. S&P Case-Shiller’s National Home Price index reported year-over-year home price growth of 19.70 percent in May as compared to April’s record year-over-year home price growth pace of 20.60 percent. Tampa, Florida led the 20-City Index with year-over-year home price growth of 36.1 percent; Miami, Florida followed with year-over-year home price growth of 34.0  percent. Dallas, Texas reported year-over-year home price growth of 30.8 percent.

Minneapolis, Minnesota, Chicago, Illinois, and Washington, D.C. had the lowest rates of home price growth, but no cities in the 20-City Home Price Index reported declines in home prices. Economists said that slowing growth in home prices could signal that home prices have peaked after years of rapid appreciation.

Affordability, Rising Mortgage Rates Impact Home Price Growth

Rapid home price growth is self-limiting in terms of affordability and the ability of home buyers to qualify for mortgages needed to complete their purchases. Rising mortgage rates also impact affordability as higher mortgage rates reduce funds available for purchasing homes. Current rates for a 30-year fixed-rate mortgage averaged 5.54 percent last week as compared to 2.78 percent approximately one year ago.

Craig J. Lazzara, managing director at S&P Dow-Jones Indices, said that deceleration in home price growth was already occurring and he cautioned that a more challenging environment “may not support extraordinary home price growth much longer.” Analysts said that high mortgage rates and rising home prices would ease demand for homes and would slow rapid home price growth in the coming months, but they did not expect significant reductions in home prices to occur immediately.

The Federal Reserve raised its key interest rate range by 0.75 percent on July 27 and is expected to continue raising its rate range throughout 2022 in its efforts to ease inflation. As interest rates rise for credit cards, home loans, and personal loans increase, consumer demand is expected to ease and calm rapid inflation.

FHFA Home Prices Rise in May

The Federal Housing Finance Agency reported that home prices for properties owned or financed by Fannie Mae and Freddie Mac rose by 1.4 percent month-to-month and 18.3 percent year-over-year in May. Fannie Mae and Freddie Mac’s loan limits impact prices for homes owned or financed by the two government-sponsored enterprises.

Will Doerner, Ph.D. and supervisory economist at Freddie Mac, said: “House prices continued to rise in May but at a slower pace. Since peaking in February, price appreciation has moderated slightly. Price growth remains above historical levels and was supported by the low inventory of properties for sale.” Signs of slowing economic growth, rising mortgage rates, and fears of recession also sidelined would-be home buyers.

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

U.S. home prices rose in May, but at a slower pace. S&P Case-Shiller’s National Home Price index reported year-over-year home price growth of 19.70 percent in May as compared to April’s record year-over-year home price growth pace of 20.60 percent. Tampa, Florida led the 20-City Index with year-over-year home price growth of 36.1 percent; Miami, Florida followed with year-over-year home price growth of 34.0  percent. Dallas, Texas reported year-over-year home price growth of 30.8 percent.

Minneapolis, Minnesota, Chicago, Illinois, and Washington, D.C. had the lowest rates of home price growth, but no cities in the 20-City Home Price Index reported declines in home prices. Economists said that slowing growth in home prices could signal that home prices have peaked after years of rapid appreciation.

Affordability, Rising Mortgage Rates Impact Home Price Growth

Rapid home price growth is self-limiting in terms of affordability and the ability of home buyers to qualify for mortgages needed to complete their purchases. Rising mortgage rates also impact affordability as higher mortgage rates reduce funds available for purchasing homes. Current rates for a 30-year fixed-rate mortgage averaged 5.54 percent last week as compared to 2.78 percent approximately one year ago.

Craig J. Lazzara, managing director at S&P Dow-Jones Indices, said that deceleration in home price growth was already occurring and he cautioned that a more challenging environment “may not support extraordinary home price growth much longer.” Analysts said that high mortgage rates and rising home prices would ease demand for homes and would slow rapid home price growth in the coming months, but they did not expect significant reductions in home prices to occur immediately.

The Federal Reserve raised its key interest rate range by 0.75 percent on July 27 and is expected to continue raising its rate range throughout 2022 in its efforts to ease inflation. As interest rates rise for credit cards, home loans, and personal loans increase, consumer demand is expected to ease and calm rapid inflation.

FHFA Home Prices Rise in May

The Federal Housing Finance Agency reported that home prices for properties owned or financed by Fannie Mae and Freddie Mac rose by 1.4 percent month-to-month and 18.3 percent year-over-year in May. Fannie Mae and Freddie Mac’s loan limits impact prices for homes owned or financed by the two government-sponsored enterprises.

Will Doerner, Ph.D. and supervisory economist at Freddie Mac, said: “House prices continued to rise in May but at a slower pace. Since peaking in February, price appreciation has moderated slightly. Price growth remains above historical levels and was supported by the low inventory of properties for sale.” Signs of slowing economic growth, rising mortgage rates, and fears of recession also sidelined would-be home buyers.

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

S&P Case-Shiller Home Price Indices: National Home Price Growth Slows in May

U.S. home prices rose in May, but at a slower pace. S&P Case-Shiller’s National Home Price index reported year-over-year home price growth of 19.70 percent in May as compared to April’s record year-over-year home price growth pace of 20.60 percent. Tampa, Florida led the 20-City Index with year-over-year home price growth of 36.1 percent; Miami, Florida followed with year-over-year home price growth of 34.0  percent. Dallas, Texas reported year-over-year home price growth of 30.8 percent.

Minneapolis, Minnesota, Chicago, Illinois, and Washington, D.C. had the lowest rates of home price growth, but no cities in the 20-City Home Price Index reported declines in home prices. Economists said that slowing growth in home prices could signal that home prices have peaked after years of rapid appreciation.

Affordability, Rising Mortgage Rates Impact Home Price Growth

Rapid home price growth is self-limiting in terms of affordability and the ability of home buyers to qualify for mortgages needed to complete their purchases. Rising mortgage rates also impact affordability as higher mortgage rates reduce funds available for purchasing homes. Current rates for a 30-year fixed-rate mortgage averaged 5.54 percent last week as compared to 2.78 percent approximately one year ago.

Craig J. Lazzara, managing director at S&P Dow-Jones Indices, said that deceleration in home price growth was already occurring and he cautioned that a more challenging environment “may not support extraordinary home price growth much longer.” Analysts said that high mortgage rates and rising home prices would ease demand for homes and would slow rapid home price growth in the coming months, but they did not expect significant reductions in home prices to occur immediately.

The Federal Reserve raised its key interest rate range by 0.75 percent on July 27 and is expected to continue raising its rate range throughout 2022 in its efforts to ease inflation. As interest rates rise for credit cards, home loans, and personal loans increase, consumer demand is expected to ease and calm rapid inflation.

FHFA Home Prices Rise in May

The Federal Housing Finance Agency reported that home prices for properties owned or financed by Fannie Mae and Freddie Mac rose by 1.4 percent month-to-month and 18.3 percent year-over-year in May. Fannie Mae and Freddie Mac’s loan limits impact prices for homes owned or financed by the two government-sponsored enterprises.

Will Doerner, Ph.D. and supervisory economist at Freddie Mac, said: “House prices continued to rise in May but at a slower pace. Since peaking in February, price appreciation has moderated slightly. Price growth remains above historical levels and was supported by the low inventory of properties for sale.” Signs of slowing economic growth, rising mortgage rates, and fears of recession also sidelined would-be home buyers.

What’s Ahead For Mortgage Rates This Week – October 2, 2017

Last week’s economic reports included Case-Shiller’s Home Price Indices, readings on new and pending home sales and Freddie Mac ‘s weekly mortgage rates report. Weekly jobless claims and reports on inflation and core inflation were also released.

CaseShiller Home Prices Rise in July; New and Pending Home Sales Lower in August

According to Case-Shiller July Index reports, national home prices rose at a rate of 5.8

90 percent on a seasonally-adjusted annual basis as compared to June’s reading of 5.80 percent. The top three cities in the 20-City Home Price Index were Seattle, Washington, Portland, Oregon and Las Vegas, Nevada.

Home prices are responding to high demand for homes and limited inventories of homes for sale. Although this trend has persisted in the last few years, lower readings for sales of new homes and pending home sales were lower in August. Analysts said this could indicate that home prices are topping out due to affordability and few homes for sale.

New home sales fell to 560,000 on a seasonally-adjusted annual basis in August as compared to July’s reading of 580,000 sales. While real estate pros and economists look to pending home sales as an indicator for future closings and mortgage originations, August’s reading slipped lower into negative territory with a reading of – 2.60 percent. July’s reading for pending home sales was – 0.80 percent.

Mortgage Rates Stay Flat, New Jobless Claims Rise

Freddie Mac reported no change in average fixed mortgage rates. 30-year fixed rate mortgages had an average rate of 3.83 percent and 15-year fixed rate mortgage rates held steady at an average of 3.13 percent. The average rate for a 5/1 adjustable rate mortgage rose by three basis points to 3.20 percent. Discount points averaged 0.60 percent for 30-year fixed rate mortgages and 0.50 percent for 15-year fixed rate and 5/1 adjustable rate mortgages.

First-time jobless claims rose by 12,000 to 272,000 claims. Analysts expected 270,000 new jobless claims; 260,000 new claims were filed the prior week.

Inflation rose by 0.10 percent in August, which matched expectations and was lower than July’s growth rate of 0.30 percent. Core inflation, which excludes volatile food and energy sectors, was unchanged at 0.10 percent and fell short of expectations of 0.20 percent growth in August.

Consumer sentiment fell to an index reading of 95.10 percent and met analysts’ expectations based on August’s reading of 95.30

Whats Ahead

Next week’s scheduled economic reports include readings on construction spending and labor-sector reports from ADP Payrolls, Non-Farm payrolls and the national unemployment rate for September. Weekly readings on mortgage rates and new jobless claims will also be released.