TITLE: You Can’t Escape Climate Change, but in Some Areas, Risk Is Lower
https://www.nerdwallet.com/article/finance/safest-place-to-live-climate-change
EXCERPT: The terrible truth about climate change is that even if you uproot your life and move to a place with low risks of natural hazards, intense weather events are still likely to find you. For example, most of the relatively high risks in midsize counties have to do with winter weather. In some places, winters are becoming less severe, but in others, they are worsening. And one big event could be devastating.
In the U.S., extreme weather events cost nearly $150 billion per year, according to The Fifth National Climate Assessment, a report released in November 2023 by the federal government. That sum doesn’t account for additional costs including loss of life, health care costs, or damages to what are known as ecosystem services — for example, food, water, timber and oil. There's a billion-dollar weather or climate disaster in the U.S. every three weeks, on average, the report found. That is compared with one every four months in the 1980s.
Despite all this, nearly half of all Americans (45%) don't believe that climate change will affect them personally, according to a December 2023 survey by Yale University. So how about what a single person pays: Issues related to climate change will cost a child born in the U.S. in 2024 at least $500,000 — and as much as $1 million — over their lifetime due to indirect and direct costs (such as missed cost-of-living increases and lower earnings), according to an April analysis conducted by ICF, a global consulting firm, and released by Consumer Reports.
Some current and future costs are likely to include:
Homeowners insurance. If you’re a homeowner, you know all too well how heightened weather-related disaster risks play into your homeowners insurance premiums. In certain places where risk is highest, private insurers won’t provide coverage for floods and wildfires.
Home maintenance, upgrades and safeguards against climate risks. These could include installing a sump pump or resealing basement walls; upgrading insulation and windows; adding or enhancing heating or ventilation systems; roofing upgrades and more.
Energy bills. With increased heating and cooling needs come higher energy bills.
Food. Weather changes present challenges to food production, which could lower supply and increase prices.
Higher taxes due to more government spending and lower government revenues. The Consumer Reports report cites reduced personal and corporation earnings that lead to less tax revenue combined with higher expenses that the government must take on for health care and infrastructure damages.
Lower income. The Consumer Reports analysis cites a possible decrease in labor hours due to extreme weather, which may lead to lower earnings.
Climate migration within the U.S. is already happening. A 2021 survey by the real estate website Redfin found that among those who plan to move, half say climate change-fueled conditions like natural disasters and extreme temperatures are factors in their decision. There are expenses associated with uprooting your life and moving elsewhere — and those aren’t costs that everyone can afford.
TITLE: It’s too hot to sell a house this summer, some real estate experts say. What home sellers can do
https://www.cnbc.com/2024/07/23/heres-how-to-sell-your-house-during-a-heat-wave.html
EXCERPT: Heat waves this summer have slowed open house foot traffic in some areas, according to a recent report. Summertime home sellers may need to get creative to beat the heat.
Pending home sales are down 5.6% from a year ago, the biggest decline in eight months, according to Redfin, a real estate brokerage firm. While prospective buyers might be waiting on potential Fed rate cuts to buy homes, as economic research lead Chen Zhao pointed out in the report, another reason for weaker demand is extreme heat in some parts of the country.
“When we get a heat wave and it’s paired with humidity, people tend to just stay indoors in the air conditioning,” said Kristin Sanchez, a Redfin Premier real estate agent in Nashville, Tennessee.
Selling a home during summer with extreme heat will call for more flexibility from sellers, according to experts.
“I’ve been having pretty good luck with doing my open houses during the morning, before the heat of the day kicked in,” Sanchez said.
TITLE: What a destructive hurricane season means for the mortgage industry
https://www.nationalmortgagenews.com/list/how-hurricanes-floods-and-tornadoes-impact-mortgages
EXCERPT: Climate change has caused an increase in extreme weather, including catastrophic storms and drought, to significantly impact the housing industry. According to preliminary estimates from CoreLogic, total insured wind and storm surge losses resulting from Hurricane Beryl's landfall in Texas will be between $700 million and $1.5 billion.
Hurricane season is not expected to soften from here. The National Oceanic and Atmospheric Administration has predicted an active hurricane season with an estimated potential combined reconstruction cost for 2024 storms of $10.8 trillion. The number of properties graded at a very high or even greater risk was slightly under 15 million, with the reconstruction cost projected to be $4.2 trillion; the subset of properties at extreme risk consisted of 6.4 million homes with a replacement cost of $1.7 trillion.
Approximately 7.7 million of these homes have an additional exposure to storm surge because of their location near the Atlantic Ocean coast, with potential replacement cost of $2.3 trillion.
Depending on the state, property owners may or may not be covered by their homeowners' insurance policy for wind damage. However, that policy does not cover water damage from storm surge. That is only covered by flood insurance, which is only required on properties in zones mapped by the Federal Emergency Management Agency and optional elsewhere.
"Insurance remains one of the most important tools for a resilient society, given the role it plays in recovery," Maiclaire Bolton Smith, CoreLogic's vice president of hazard and risk management, said in a press release. "With the potential for an active hurricane season on the horizon, insurers and homeowners should do everything they can to prepare and mitigate as much risk as possible."
Due to the extreme weather conditions, experts believe the mortgage market needs to start treating homeowners insurance like it does a one-year adjustable mortgage.
As with an ARM portfolio, the next step for lenders is to look at their portfolio and find the ways to mitigate risk, including understanding what the peril is and knowing what the related financial impact is.
"I think the challenge to the industry and inclusive of the insurance part of that industry is to come up with different solutions," George Gallagher, senior leader and principal of climate risk at CoreLogic, said at the Mortgage Bankers Association's Secondary and Capital Markets Conference in May. "How about a five-year policy where maybe there's a little buydown at the front end of it? How about something more oriented towards homes and communities that have resiliency built into it?"