Ways Builders Are Increasing Energy Efficiency

Home Energy Rating System (HERS) Index is the standard that is used in the industry to measure a home’s energy efficiency. This system is nationally recognized and is used across the country when inspecting and calculating a home’s energy performance. Homebuilders today are finding ways to make sure the homes they are building have low HERS scores.

HERS Index standard scores are determined using energy modeling software. The most common HERS Index score in 2019 was 58 (the standard ranged was between 45 and 80). When building a

home, the lower the score, the more energy-efficient the home is. Here are some useful tools builders are using to make sure their new construction homes are energy efficient.

Builders are using specific heating equipment. In recent studies, ground source heat pumps had the lowest score ranges. Air source heat pumps had the best scores overall which ranged between -20 and 5. Traditional furnaces had high scores ranging from 25 to 70 and electric resistance heating scored the highest ranging 75 or higher.

Heating and cooling efficiency also plays a part. Seasonal Energy Ratios (SEERS), as well as the Annual Fuel Utilization Efficiency (AFUE), play a big part. Homes that scored lower on the HERS index from 25 to 40 had SEER ratings of 17-24. Homes with a SEER around 14 scored a high HERS index score of 45 and above. For an Annual Fuel Utilization Efficiency in the mid-80s, the HERS score ranged from 70 – 75. For a lower HERS score (below 55) the AFUE will need to be 90 and above.

Another tool to look at is the mechanical ventilation type. To achieve a HERS score of 40 and below, most homes must only have Energy Recovery Ventilators (ERVs) and Heat Recovery Ventilators (HRVs). Homes with HERS scores that range between 40 and 50 had exhaust only and those with HERS scores between 56 and 80 had air cyclers only.

Solar photovoltaics (PV) is a specific technology that changes sunlight into direct current electricity by using semiconductors. How it works is when the sun hits the semiconductor (within the PV cell) electrons are freed and the form an electric current.  Homes with PV had a HERS score of 30 and below. Homes without the solar photovoltaics had a Home Energy Rating System Index score of 40 and higher.

Homebuilders have vast resources when it comes to building an energy-efficient home. When a builder combines multiple efficient products with sound building science principles they will have a greater potential for building a great energy-efficient home.

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Can I Sell My Home in the Current Housing Market?

The country might be on hold with the pandemic but life and life events still must go on. We will always have a need to buy and sell our homes. Even in these times, there are many major life changes that still occur that lead to the need to sell your home. Both buyers and sellers find themselves in these situations so it is not a lost hope to sell your home during the pandemic.

Technology is on your side. The stay-at-home guidelines are giving a lot of potential buyers tons of time to browse the internet. This makes a great gateway for real estate listings. Through Social Media, online marketing tools and virtual walkthroughs, your home for sale will be at the buyer’s

fingertips through the internet. Realtors have conveyed that buyers are actively looking online and reaching out to them. Buyers are still making offers and homes are still being sold via paperless technology.

There might be a slow down in foot traffic but buyers are still out there. According to the NAR Flash Survey: Economic Pulse, Realtors have reported that they have not seen a dip or an increase in buyer activity. To a seller that means they have the opportunity to catch those buyer’s interests. It just takes one potential buyer to make an offer on your listing.

The NAR Flash Survey: Economic Pulse also showed that 56% of NAR members said that their sellers are removing their listings from the market. This number sounds scary to some but is great news for a potential seller during this time. The less competition in the market, the better your chances. The fewer listings Realtors have to search the more potential your listing will end up at the top of the buyer’s search list.

Using a professional to list your home is important in any housing market. Realtors adapt to the market and are always ready to list your home. During these untraditional circumstances, Realtors are using technology for both buyers and sellers. Real Estate professionals’ top priority is to keep everyone safe while keeping their real estate needs on track.

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Home Buying Still Supports the Current Local Economy

The country is still trying to get comfortable with the new norm. Life all around is ever-changing with the current pandemic. The real estate market is no different – agents, lenders and customers are connecting and transacting virtually. One thing that has remand constant in this uncertain day in age is purchasing a home.

The National Association of Realtors‘ current report stresses the full economic impact of home sales, “The total economic impact of real estate related industries on the state economy, as well as the expenditures that result from a single home sale, including aspects like home construction costs, real

estate brokerage, mortgage lending and title insurance.”

To see how this works, we will breakdown the average economic impact of just one home sale in the United States. A home that sold for $84,724 will give the real estate industries $23,544 (27.8%), home purchase expenses $4,243 (5%), multiplier of house related expenditures $25,932 (15.1%) and new home construction $91,433 (53.3%).

As you can see when a home is purchased it makes a big impact on the economy. It is a win-win situation where you have a place to live, and you are initiating jobs and income for everyone involved in the transaction. In a nutshell, purchasing a home is making the home buyer an “economic driver.”

Even with the current times, there are many things you can do to keep your home search going. If you have decided to go ahead with your dream of owning a home you need to get pre-approved for a mortgage. Getting pre-approved not only helps you understand how much you can afford but also lets others know you are a serious buyer. Since there is a stay-at-home order, it is important to connect virtually with a Realtor or talk directly to a builder to build a new home or fully custom home. A Realtor is someone you can trust and knows the ever-changing dynamics in the current market. Builders have tons of resources including floorplan design, financing, pricing and selections recommendations, and all businesses involved in the closing of your new home.

Also, you can still do real estate research online.  Even before the pandemic, online searches for real estate were well over 90% with home buyers starting on the Internet to find a home to buy. Shop mortgage lenders and see if there are any down payment assistance programs that would work for you.

You do not have to put your dream of owning your own home on hold, you can view do most of the preliminary footwork for finding and making an offer on a home for sale online. Virtual tours and online sites can help you navigate the housing market, and Ron Lee Homes is also here to help with a toolbox of virtual services for your home buying or home building needs.  Contact Us Today at 985-626-7619 or email Info@RonLeeHomes.com.

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Elements That Affect Mortgage Rates

There are many factors that influence mortgage rates such as inflation, economic growth and most importantly the Federal Reserve. When determining mortgage rates, the Federal Reserve’s monetary policy is taken into consideration.

The Federal Reserve’s monetary policy is set by the Federal Open Market Committee. The Federal Reserve itself is the central banking system of the United States of America. The goal of the Fed is to boost job growth while controlling the amount of inflation. The Federal Open Market Committee

(FOMC) has a certain way of maintaining its goal through monetary policy. This is done through the federal fund rates. The federal fund rates are “interest rate that banks charge one another for short-term loans.” These federal fund rates help shape mortgage rates along with other long-term loans.

Neither the mortgage rates or the fed rates follow each other necessarily. Most of the time, the federal funds rate and mortgage rates tend to go the same direction. There are times in history when the Fed has  lead the market and other times the mortgage market has lead.

The FOMC meets eight times a year to work on any necessary changes that might need to be made to the monetary policy. If they make a change, FOMC will let investors know the result of their decision before making the change. This way there will be a consensus derived from the investor’s opinion on the FOMC’s decision. The consensus, for the most part, agrees with the Fed’s decision whether to cut rates, raise them or keep them the same.

Currently, the federal funds rate has been reduced to a range of 0% to 0.25% as of March 15, 2020.

The central bank plans to keep the federal funds rate close to zero for the time being. They also will conduct a round of quantitative easing which is a form of economic stimulus the central bank has used in the past.

The quantitative easing planned is for the Feds to purchase around $500 billion of Treasurys and approximately $200 billion of mortgage-backed securities. The Fed hopes this will “add cash to the mortgage banking system to reassure lenders that it’s safe to lend because the Fed is willing to buy the resulting mortgage-backed securities.”

Federal funds rate will not only influence the mortgage rates in the housing market but will also influence the home equity lines of credit (HELOC). The HELOc rates are usually adjustable rates and are based off the Wall Street Journal’s prime rate. In a nutshell, when the Fed cuts the federal funds rate, the interest rate on HELOcs will also go down.


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