Homeowners are sprucing up their homes more this year, tackling several home improvement projects. Eighty-eight percent of homeowners recently surveyed say they performed a major home repair in the last year, and more than half said they managed multiple major repairs or home improvement projects, according to a new analysis by Porch.com, a home improvement website.
Homeowners spent an average of $4,958 on home repairs and improvements in the past year, according to the study. But about a quarter of more than 1,000 homeowners surveyed said they spent more, averaging $2,501 to $5,000, and 15 percent of homeowners spent $5,000 to $10,000 on their house repairs. Which projects were the most expensive?
Repairing a floor structure topped the list, averaging more than $15,000, the study shows.
“Even the most resilient, high-quality floors will need to be replaced eventually, and you may want to start saving now,” Porch.com’s study notes. “While both the square footage and materials will play a factor in the total cost, the overall average made repairing floor structures the most expensive renovations according to the homeowners surveyed.”
Installing a fence (more than $8,000), aluminum decking ($5,600), and air conditioning ($4,400) also ranked among the most costly home improvement projects, according to the analysis.
Emergency home repairs are common. Eighty-eight percent of homeowners dealt with a major repair last year, costing on average nearly $5,000, according to the study.
But homeowners believe their improvements pay off. Homeowners, on average, believed their homes are worth nearly $15,000 more today than a year ago—a 6 percent increase, according to the study.
Homeowners are paying more for property taxes. Nationwide, the average property tax bill was $3,498 in 2018, up 3 percent compared to a year ago, ATTOM Data Solutions, a real estate data firm, reports in a new analysis. The effective tax rate was 1.16 percent in 2018 (which is the average annual property tax).
New Jersey, Illinois, Texas, Vermont, and Connecticut had the highest effective tax rates in the country in 2018, the analysis showed.
“Property taxes levied on homeowners rose again in 2018 across most of the country,” says Todd Teta, chief product officer for ATTOM Data Solutions. “While many states across the country have imposed caps on how much taxes can go up, which probably contributed to a slower increase in 2018 versus 2017. There are still many factors at play that can contribute to local property tax hikes, and without major changes in the way a community runs public services, tax rates must rise to pay for them.”
Property taxes rose faster than the national average in 58 percent of the markets tracked in the study. Of the 219 metro areas analyzed, 120—or 55 percent—posted an increase in average property taxes above the national average of 3 percent. Some of those metro areas included Los Angeles (5 percent increase); Dallas-Fort Worth (8 percent increase); Washington, D.C. (4 percent increase); Atlanta (7 percent increase); and San Francisco (7 percent increase).
ATTOM Data Solutions’ analysis covered more than 87 million U.S. single-family homes. It showed property taxes levied on single-family homes in 2018 totaled $304.6 billion, up 4 percent from 2017. Researchers analyzed property tax data collected from county tax assessor offices nationwide at the state, metro, and county levels, along with estimated market values of single-family homes calculated using an automated valuation model.
Highest Property Taxes
The states with the highest effective property tax rates in 2018 were:
New Jersey: 2.25%
Illinois: 2.22%
Texas: 2.18%
Vermont: 2.16%
Connecticut: 2.02%
New Hampshire: 1.99%
New York: 1.86%
Pennsylvania: 1.79%
Ohio: 1.69%
Wisconsin: 1.58%
By metro area, those with the highest effective property tax rates (among those with populations of at least 200,000) were in Binghamton, N.Y. (3.19 percent); Syracuse, N.Y. (2.89 percent); Rochester, N.Y. (2.88 percent); Rockford, Ill. (2.83 percent); and Atlantic City, N.J. (2.74 percent).
Lowest Property Taxes
Meanwhile, the following states had the lowest effective property tax rates in the country:
Hawaii: 0.37%
Alabama: 0.48%
Colorado: 0.51%
Nevada: 0.57%
Utah: 0.57%
West Virginia: 0.58%
Delaware: 0.61%
Arizona: 0.64%
Tennessee: 0.65%
Wyoming: 0.66%
By metro area, the lowest effective property tax rates in 2018 were in Laredo, Texas (0.35 percent); Honolulu (0.36 percent); Montgomery, Ala. (0.37 percent); Tuscaloosa, Ala. (0.39 percent); and Colorado Springs, Colo. (0.42 percent).
Businesses are reportedly receiving letters and faxes from an entity called “First National Bank” that is offering lines of credit and secured or long-term loans. But federal authorities are warning that First National Bank is “not a licensed or chartered bank.”
The Office of the Comptroller of the Currency sent a notice to banks and other officials across the country Thursday warning that “First National Bank,” which claims to be from Minneapolis, is falsely claiming “to be a financial institution offering business banking services.”
The OCC has released a copy of First National Bank’s correspondence to one company. In the letter, First National Bank informs the business that it has prequalified for a $62,000 loan. The letter also promises to provide funding in as little as three days, as well as $25,000 to $350,000 in revolving credit, with no collateral required.
Authorities say First National Bank is using the fictitious address of 222 S. 9th Street in Minneapolis, as well as phone numbers such as (800) 491-0264 or (855) 414-9437.
The OCC is warning anyone who is contacted by the bank to not respond. For those who have, the OCC is providing a list of federal agencies to report any correspondence with the fictitious bank.
After posting their biggest drop in a decade last week, mortgage rates remain at multi-month lows—and borrowers are rushing to take advantage.The 30-year fixed-rate mortgage averaged 4.08 percent this week, Freddie Mac reports in its weekly mortgage market survey. Mortgage applications surged 18.6 percent last week as borrowers locked in lower financing costs, the Mortgage Bankers Association reports.
“Purchase mortgage application demand saw the second highest weekly increase over the last year, and thanks to a spike in refinancing activity, overall mortgage demand rose to the highest level since the fall of 2016,” says Sam Khater, Freddie Mac’s chief economist. “While the housing market has faced many headwinds the last few months, it sailed through the turbulence to calmer seas with demand buttressed by a strong labor market and low mortgage rates. The benefits of the decline in mortgage rates that we’ve seen this year will continue to unfold over the next few months due to the lag from changes in mortgage rates to market sentiment and ultimately home sales.”
Freddie Mac reports the following national average mortgage rates for the week ending April 4:
30-year fixed-rate mortgages: averaged 4.08 percent, with an average 0.5 point, rising from last week’s 4.06 percent average. Last year at this time, 30-year rates averaged 4.40 percent.
15-year fixed-rate mortgages: averaged 3.56 percent, with an average 0.4 point, dropping from last week’s 3.57 percent average. A year ago, 15-year rates averaged 3.87 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgages: averaged 3.66 percent, with an average 0.4 point, falling from last week’s 3.75 percent average. A year ago, 5-year ARMs averaged 3.62 percent.
The two largest sources of mortgage money in the United States want self-employed loan shoppers to know that their chances of getting a home loan approved have increased.
Fannie Mae and Freddie Mac have rolled out automated underwriting technology for lenders that take a lot of the guesswork and risk out of the approval process for mortgage applications of the self-employed.
One of the reasons lenders have been reluctant to approve loans if you’re self-employed is because it’s expensive, time-consuming, and labor-intensive to gather and analyze the paperwork needed to verify your income and gauge your risk. It’s much easier and profitable to process applications of wage or salaried employees who get a W-2 issued by their employer.
But this new technology, incorporated into the companies’ automated underwriting systems, enables lenders to analyze the paperwork quickly and accurately so they can come to a decision in a fraction of the time it used to take and with far less speculation involved.
The process potentially increases efficiency so much that even small community banks in rural areas can find it cost-effective to consider loan applications that before they might have passed on.
No process is perfect and there’s bound to be problems as glitches are worked out, but the new procedures show Fannie and Freddie are trying to remove some of the friction self-employed homebuyers face.
Seventy-nine percent of consumers say that a lawn is an important feature when renting or buying home. Many consumers are even ranking a nicely sized yard as the second most important home feature, only behind a renovated kitchen, according to a new survey released by the National Association of Landscape Professionals.
Sizable lawns trumped other popular features like updated bathrooms, storage, and hardwood floors, according to the survey.
Younger generations are placing more value on lawns than older generations, too. A nice lawn size was the top priority among surveyed millennials, nudging out even an updated kitchen, according to the survey. Eighty-two percent of millennials say that having a lawn is important when renting or buying a home, compared to 81 percent of Generation X and 77 percent of baby boomers.
“While some may assume that trends toward urbanization or the increased use of electronics and technology have resulted in a decreased interest in lawns among younger Americans, the results of our research found just the opposite,” says Missy Henriksen, vice president of public affairs for the association.
Homeowners want a nice lawn for entertainment, the survey found. Forty-seven percent of Americans say they entertain in their yards at least once a month, and 57 percent use their yards for recreation at least monthly. The majority of Americans (77 percent) also say they relax in their yards at least once a month, and 32 percent garden in their yards.
To boost a property’s outdoor appeal for interested buyers, pass along the following maintenance tips from the NALP to your selling clients:
5 Steps to a Healthy Lawn
1. Grass cycling. This means leaving grass clippings on the lawn after mowing to help return nitrogen and nutrients to the soil.
2. Don’t overwater. Provide your lawn a deep watering every few days, not daily. Watering your lawn too frequently can lead to shallow root growth.
3. Control weeds. The NALP says April is the ideal time to apply preemergent weed control. Weeds can quickly overtake lawns, so have preventive measures in place.
4. Maintain mowers. It is important to keep your mower blades sharp. When left dull, blades are ineffective and can damage your lawn.
5. Fertilize. Adequate fertilizer provides proper nutrients that are key for maintaining healthy lawns.
The share of single female home buyers in the last three years has increased from 15 percent to 18 percent, according to the National Association of REALTORS®. Single women outpace single men when it comes to home purchases, Jessica Lautz, NAR’s vice president of demographics and behavioral insights and research, told ABC News. “When I tell people, they are surprised,” she says about the data. Women are “feeling confident you don’t need a wedding ring to purchase a home. They want the stability of purchasing a home but don’t need the marriage.”
While single women purchase homes more often than single men, they tend to buy multigenerational properties that are less expensive, Lautz said.
Nuria Rivera, 34, told “Good Morning America” that she decided to buy a $420,000 three-bedroom home in Salt Lake City because she sees homeownership as a critical component to long-term financial health. And Denise Dmuchowski, 37, said she purchased a $340,000 two-bedroom condo in Arlington, Va., on her own because she was tired of wasting her money on rent. “For me, the thing I struggled with the most when buying as a ‘singleton’ is you don’t know if your situation is going to change,” Dmuchowski said. “I would make excuses that kept me from buying, like, ‘Oh, well what if I meet someone and he already owns a place?’ or ‘What if I want to take a new job in a different city?’ Thinking too much about what could happen kept me from committing, and I was afraid of feeling trapped because I owned. Finally a friend simply said, ‘If something changes or if you want to move, then you rent it out or sell it. You figure it out,’ and I thought, ‘You know what, you’re right!’”
A growing threat of recession isn’t deterring buyers from jumping into the spring market. Nearly 70 percent believe the U.S. will enter a recession within the next three years, but overall, buyers remain optimistic that the housing market will fare better than it did in 2008, according to a new realtor.com® survey.
Nearly 30 percent of more than 1,000 consumers surveyed say they expect a recession to begin sometime in 2020. “The U.S. economy has been on a hot streak for the last seven years, producing steady economic growth and low unemployment rates,” says realtor.com® Chief Economist Danielle Hale. “Historically, this type of growth hasn’t continued indefinitely, and U.S. home shoppers think it will come to an end sooner rather than later.”
Fifty-six percent of home shoppers believe real estate prices have reached their peak. Consumers who expect a recession to come sooner rather than later were the most likely to have this view, Hale says. “When the U.S. enters its next recession, it is unlikely that the housing market will see a sharp nationwide downturn,” Hale says. “The same record low inventory levels that have made buying a home so difficult recently will likely protect home prices in the next recession.”
But some buyers who fear another recession may enter the spring market with “eyes wide open” and “slightly pessimistic,” the realtor.com® survey reports. “This is a stark contrast to the years leading up to the last recession, when ‘irrational exuberance’ was more common and yet another reason to expect that the next downturn will be very different for the housing market than the last,” the report notes.
Since the recovery from the Great Recession started in 2010, home prices have increased by 49 percent. The U.S. economy has grown by $3 trillion, and 18.7 million more jobs have been created. “This persistent optimism toward homeownership is likely a key reason that home shoppers are confident and looking to buy, even as they expect a recession is approaching,” the report notes.
Young adults have waited longer than past generations to jump into homeownership. As they wait, that may have upped their expectations over what their home will look like for when they finally do take the plunge into ownership. Forty-five percent of millennials surveyed say they expect their first home to be their “dream home,” according to a new survey of 2,000 millennials between the ages of 22 and 37, released by Northshore Fireplace.
Sharon McCutcheon – Unsplash
Millennials are willing to move to a different area to get this piece of their American dream, too. Sixty-five percent of millennials say they are willing to relocate to find a home they can afford, and 41 percent say they are willing to move to a different state.
But whether millennials will actually be able to afford their dream home from their first purchase may be questionable. Half of millennials surveyed say they have only $2,000 or less saved for a down payment. Millennials believe their first home will cost $218,152 (average). The median cost of an existing home in the U.S. is $249,500, according to the National Association of REALTORS®’ housing report, based on February data.
In a separate study by Porch.com, a home improvement website, millennial buyers were the most likely compared to other generations to pay more for must-have amenities. Many of the amenities they most sought out related to convenience or comfort, such as a private backyard or patio (they are willing to pay $7,009 more for a home with one); a swimming pool (they’d pay $6,346 more for one); central air conditioning and heating ($6,194); and solar panels ($5,469), according to the survey.
Some millennials may be willing to wait until they can afford their dream home. Their top fears delaying ownership: the burden of paying a mortgage (41 percent); unforeseen maintenance issues with the home (35 percent); being locked into one location by buying (17 percent); and the upkeep of the home (7 percent).
The 30-year fixed-rate mortgage plunged 22 basis points this week, the largest one-week drop in 10 years, Freddie Mac reports in its weekly mortgage survey.
“The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over ten years,” says Sam Khater, Freddie Mac’s chief economist. “Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand. We have recently seen home sales start to recover and with this week’s rate drop, we expect a continued rise in purchase demand.”
Freddie Mac reports the following national averages with mortgage rates for the week ending March 28:
30-year fixed-rate mortgages: averaged 4.06 percent, with an average 0.5 point, falling from last week’s 4.28 percent average. Last year at this time, 30-year rates averaged 4.40 percent.
15-year fixed-rate mortgages: averaged 3.57 percent, with an average 0.4 point, dropping from last week’s 3.71 percent average. A year ago, 15-year rates averaged 3.90 percent.
5-year hybrid adjustable-rate mortgages: averaged 3.75 percent, with an average 0.3 point, falling from last week’s 3.84 percent average. A year ago, 5-year ARMs averaged 3.66 percent.
