Latest news with #JessicaLautz
Forbes
7 days ago
- Business
- Forbes
Rising Insurance Costs Make Buying A First Home Even Harder
Skyrocketing home insurance costs are extra challenging for first-time buyers. It used to be said that owning a home protected you from unpredictable costs like rent hikes. It added stability to your life and finances. Is this still true? Have skyrocketing home insurance costs eliminated the predictability and stability of homeownership? Have they contributed to the crisis of young couples unable to buy homes and start their families? These costs have definitely been a contributing factor, according to industry observers. Insurance Adding to First Time Buyer Challenges 'First-time home buyers have dropped to the lowest level recorded in more than four decades,' shares the National Association of Realtors' economist Jessica Lautz. Insurance is one pain point among others, including higher mortgage rates, HOA fees, energy costs and home prices themselves, she notes. Inflation is impacting all aspects of homeownership. Lautz points to a 2024 NAR homebuying study that details home insurance costs. 'Over the past decade, while consumer prices have risen by approximately 30%, homeowners' insurance costs have surged by more than 50%,' it notes. The high cost of housing and increased prices for everything related to homeownership, including insurance, is causing couples to delay starting families and impacts their physical as well as fiscal, health. 'Bringing housing costs to an affordable level can make all the difference in the life — and future — of a family,' according to one of many studies on the topic, this one by Habitat for Humanity. 'Homeowners insurance is yet one more hurdle to affordability,' observes Down Payment Resource CEO Rob Chrane. 'Like interest rates, it affects how much you can borrow, reducing the price range of homes you can afford,' he adds. The uncertainty around the cost of insurance your prospective home can be more damaging than the sticker shock of home prices. 'An unexpected $1,000 to $2,000 increase for homeowners insurance can suddenly upend your budget,' he shares, noting, 'In specific markets, we've encountered situations where the monthly escrow payment for insurance alone surpasses the loan's principal and interest payment.' High interest rates are still the bigger psychological hurdle, Chrane notes, shaping what buyers think they can afford. 'But insurance costs are quickly catching up. Again, uncertainty plays a role. Interest rates are visible up front, while insurance costs come up later in the process, surprising some buyers and throwing them off track at the worst moment.' Scope of the Problem 'According to LendingTree's 2025 State of Home Insurance Report: 'Home insurance rates have spiked 40.4% in the past six years, with the last two years seeing double-digit increases.' Rates were fairly stable from 2019 to 2021, then surged afterward. 'This is a relatively new trend,' notes licensed insurance expert and LendingTree contributor Rob Bhatt. 'Up until a few years ago, homeowners insurance was usually an afterthought in the homebuying process. Many homebuyers now need to think about home insurance earlier on in the process than before.' Location, Location, Location It's reasonable to expect that states like California, Florida and Texas, with their headline-grabbing disasters, would be the front runners for insurance hikes. However, as Chrane observes, other forces contribute to rising premiums, including regulatory challenges and insurer exits. Disaster-prone states have also set up their own insurer-of-last-resort programs for regions where homeowners can't find policies. Bhatt points to California's as an example. 'Even if your insurance company doesn't raise your normal home insurance rate, you may receive an extra charge to help cover the FAIR Plan's expenses.' He also notes that California's insurance commissioner has given conditional approval for State Farm's temporary rate hikes to become permanent. 'I imagine other companies have filed, or will file, for rate increases to keep up with the rising costs of insuring homes in California,' he predicts. The latest natural disaster to hit homeowners was the Texas hill country flash floods from earlier this month. Bhatt doesn't expect them to hike rates for one simple reason: 'Homeowners insurance doesn't cover floods.' At the same time, the insurance expert notes that insurers tend to avoid homes in elevated risk areas. 'Considering the extent of the damage, I suspect that some insurance companies may be less willing to insure homes in these affected areas than they have in the past. Some may continue insuring homes in the affected areas but charge higher rates.' He also notes that the flooding may rewrite flood zone maps, which can impact both the costs and availability of coverage. 2026 Prediction Bhatt sees signs of stabilization. 'We may be entering a normal pattern where rates only increase slightly from year to year or even come down. This, in turn, may provide some relief to homeowners and home buyers.' However, he cautions, life can be unpredictable. Buyer Tips The LendingTree pro suggests shopping around for a lower rate and considering a higher deductible to save money. He also notes that 'It's good to avoid filing claims for relatively minor repairs. Insurance companies usually raise your rates after a claim of any size. If you have two or more claims within a short amount of time, your insurance company may drop you.' It's better to payout of your pocket for damage of a couple thousand or less, he cautions. 'In the long run, you're usually better off saving insurance for large expenses you wouldn't otherwise be able to afford.' You can also save on your premiums by making your home more disaster resistant, he notes. I've written about the Fortified hurricane and Wildfire Prepared Home programs. Even if you don't go for a full certification, you can let your insurer know about specific changes you've implemented to potentially save on your insurance coverage. Chrane urges buyers to research down payment assistance programs like his to lessen their financial burden. 'Once their budget is set,' he suggests, 'they should talk with home insurance agents and compare quotes because premiums can differ by hundreds or even thousands of dollars annually for the same coverage.' Lautz agrees that prospective buyers should be researching down payment assistance programs and considering overlooked neighborhoods.
Daily Mail
20-07-2025
- Business
- Daily Mail
Why Americans end up choosing where they will buy a home
Man's best friend is no exaggeration. People love their animals so much that they top the checklist when it comes to where they decide to buy a home. Dogs and cats are the most common household pets, and we're spending more time and money on them than ever, reports the National Association of Realtors (NAR). About one in five recent homebuyers considered their pet when choosing a neighborhood, a number that increases among unmarried couples and single women buyers. Factors such as proximity to a veterinarian and outdoor space are both seriously important considerations for buyers. Pet lovers also purchased homes in areas with larger lots or acreage, and were more interested in convenience to parks and recreation areas, as well as walkability. 'Pet owners are often not willing to sacrifice for the needs of their beloved fur baby,' Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors, told 'An adopted puppy may start small, but as they grow into a 100-pound dog, enough room to house both the pet and humans takes a more important role.' She continued: 'Not only can having a pet spur purchasing a home, but when they move, they want a fenced yard and flooring suddenly becomes an important consideration. These home features can be as luxurious as an animal washing station, cat litter closets, and even outdoor features like a water feature or a catio.' Lautz added that many buyers often ask how far the nearest dog park is. 'For pet owners, home buying transcends not only the home features but expands to the neighborhood,' she said. 'Walkability, the perfect dog park, and proximity to the vet are important to pet owners.' Throughout the COVID-19 pandemic, Americans adopted pets for companionship and entertainment. This trend has since eased from its recent peak, but Americans are still investing more time and financial resources in their animals. According to data from the American Pet Products Association, total spending on the US pet industry grew from $53.3 billion in 2012 to $152 billion in 2024. Now, there are officially more households with pets than children in the US, according to the NAR. The share of families with children under the age of 18 living in their home has continued to decline, the US Census reveals. The share of families with children under the age of 18 in 2024 stood at 39 percent, down from 52 percent in 1950. This is likely due to two reasons. Birth rates, overall, have been declining, and a large share of baby boomer households have already seen their children leave the nest. This trend is also reflected among homebuyers. In 1985, 58 percent of home buyers had children under the age of 18 in their homes. In 2024, just 27 percent of home buyers had a child under the age of 18 in their home, an all-time record low. The number of pets has not only gone up, but the amount of time Americans spend with their animals has also increased significantly over the past 20 years. In 2003, 13.2 percent of Americans spent a significant amount of time with their pets daily, according to the BLS American Time Use Survey. In 2023, that share has grown to 20.4 percent, and 23.8 percent of women. Some 17 percent of single women considered factoring their pet into their neighborhood choice, compared to 12 percent of single men.
Daily Mail
19-07-2025
- General
- Daily Mail
Adorable reason Americans end up choosing the neighborhood where they'll buy a home
Man's best friend is no exaggeration. People love their animals so much that they top the checklist when it comes to where they decide to buy a home. Dogs and cats are the most common household pets, and we're spending more time and money on them than ever, reports the National Association of Realtors (NAR). About one in five recent homebuyers considered their pet when choosing a neighborhood, a number that increases among unmarried couples and single women buyers. Factors such as proximity to a veterinarian and outdoor space are both seriously important considerations for buyers. Pet lovers also purchased homes in areas with larger lots or acreage, and were more interested in convenience to parks and recreation areas, as well as walkability. 'Pet owners are often not willing to sacrifice for the needs of their beloved fur baby,' Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors, told 'An adopted puppy may start small, but as they grow into a 100-pound dog, enough room to house both the pet and humans takes a more important role.' She continued: 'Not only can having a pet spur purchasing a home, but when they move, they want a fenced yard and flooring suddenly becomes an important consideration. 'These home features can be as luxurious as an animal washing station, cat litter closets, and even outdoor features like a water feature or a catio.' Lautz added that many buyers often ask how far the nearest dog park is. 'For pet owners, home buying transcends not only the home features but expands to the neighborhood,' she said. 'Walkability, the perfect dog park, and proximity to the vet are important to pet owners.' And over the last 20 years, there has only been a rise in pet ownership. According to the American Pet Products Association, 71 percent of American households own a pet. This is up from 56 percent in 1988. Among all unmarried couples, 24 percent of home buyers considered their pet when deciding on a neighborhood in which to purchase, compared to 15 percent of married couples. Throughout the COVID-19 pandemic, Americans adopted pets for companionship and entertainment. This trend has since eased from its recent peak, but Americans are still investing more time and financial resources in their animals. According to data from the American Pet Products Association, total spending on the US pet industry grew from $53.3 billion in 2012 to $152 billion in 2024. Now, there are officially more households with pets than children in the US, according to the NAR. The share of families with children under the age of 18 living in their home has continued to decline, the US Census reveals. The share of families with children under the age of 18 in 2024 stood at 39 percent, down from 52 percent in 1950. This is likely due to two reasons. Birth rates, overall, have been declining, and a large share of baby boomer households have already seen their children leave the nest. This trend is also reflected among homebuyers. In 1985, 58 percent of home buyers had children under the age of 18 in their homes. In 2024, just 27 percent of home buyers had a child under the age of 18 in their home, an all-time record low. The number of pets has not only gone up, but the amount of time Americans spend with their animals has also increased significantly over the past 20 years. In 2003, 13.2 percent of Americans spent a significant amount of time with their pets daily, according to the BLS American Time Use Survey. In 2023, that share has grown to 20.4 percent, and 23.8 percent of women. Some 17 percent of single women considered factoring their pet into their neighborhood choice, compared to 12 percent of single men.
Yahoo
18-06-2025
- Business
- Yahoo
Baby Boomers aren't the 'solution' to the housing crisis
More than one-third (33.5%) of Baby Boomer homeowners say they will never sell their home, according to a new Redfin survey. National Association of Realtors deputy chief economist and vice president of research Jessica Lautz joins Wealth to discuss what this trend means for the housing markets, particularly potential first-time homebuyers facing affordability challenges. To watch more expert insights and analysis on the latest market action, check out more Wealth here. A new survey from Redfin shows that about one in three baby boomers say they will never sell their homes. How is this trend affecting overall housing supply in the market dynamics we've seen over the past year? Yeah, certainly. We know that baby boomers have reinvented everything, so it's not a surprise that they're reinventing aging in place. Uh, they're not going to move. And we know that they're the biggest share of home buyers in the last year too. Uh, they have the cash to be able to do so as opposed to first-time home buyers who are really just struggling with affordability. And so if there's not enough of supply to go around, this is really going to be an increased issue. We can't look at baby boomers as the solution to our housing crisis. We really do need to build more. And you mentioned affordability concerns. How are you looking at first-time home buyers and the challenges that they're facing? Yeah, if we look at first-time home buyers, they're at historic lows, but also their ages are at historic highs. So we know that they're renting for a longer period of time, and this is an issue when we think about the housing market, and we think about movement. If baby boomers aren't moving and we can't bring in new first-time home buyers, we don't have the supply to go around, it's just a very difficult housing market when we think about young adults getting on that first rung. Sign in to access your portfolio
Yahoo
18-06-2025
- Business
- Yahoo
Baby Boomers aren't the 'solution' to the housing crisis
More than one-third (33.5%) of Baby Boomer homeowners say they will never sell their home, according to a new Redfin survey. National Association of Realtors deputy chief economist and vice president of research Jessica Lautz joins Wealth to discuss what this trend means for the housing markets, particularly potential first-time homebuyers facing affordability challenges. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
