Keeping a home warm during the colder months of the year can prove to be expensive. With energy costs on the rise, many households are facing higher energy bills each year.
Fixr.com, which provides "Cost Guides" of estimates to common household remodeling projects, highlights five projects to help increase a home’s energy efficiency and keep utility bills lower. (Fixr.com also provides cost estimates below of the projects listed.)
1. Find unorthodox heat sources. More efficient sources of heat are available, particularly if the home is in a milder climate or if the home can be broken into zones.
A heat pump can help lower your electric bills by 50 percent if you currently use electricity to heat your home. Heat pumps cost about $7,500, but will pay for themselves with reduced energy costs. Switching to a geothermal heat pump will save you even more. According to Money Crashers, geothermal heat pumps qualify for a tax credit equal to 30 percent of equipment and installation costs, with no upper limit. Pumps are also frequently paired with things like radiant heat flooring in specific areas of the home, as they are more effective at using energy than either baseboards or radiators and can help supplement the heat in smaller spaces.
Radiant heat costs between $6,000 and $14,000 if covering your whole home, but you can often install it in a single room for around $700. Paired with a heat pump, this will keep your home warm while significantly lowering your energy bills.
2. Add extra insulation. The amount of insulation that your home needs is directly tied to the type of heat source you have. Many homes are actually underinsulated for their climate and their heat source, resulting in their furnaces or radiators having to work harder than they need to and causing a spike in energy bills.
Insulating even a single room in your home can dramatically increase comfort and help you lower your thermostat, resulting in smaller bills. Adding insulation to your attic can also help you prevent costly and damaging ice dams as well, saving you even more. The cost to insulate a single room in your home is around $1,200 to $1,800, and will recoup about 107 percent of the cost at time of resale, making this one of the best improvements you can do for your home.
3. Take care of your furnace. Furnaces are one of the most commonly used ways to heat large homes. Unfortunately, they often have a wide range of efficiency that could be costing you more in monthly bills than they need to.
If your furnace is less than 10 years old, make sure to schedule regular maintenance to keep it running at peak efficiency. This involves changing the filter and making repairs as necessary. The most common furnace repair involves replacing the heat exchange, for around $1,000 to $1,700.
If your furnace is older than 10 years, replacing it can dramatically increase its efficiency. Older furnaces only run at around 50 percent efficiency, while newer models can reach rates of 90 percent, making them a much better choice for keeping monthly bills down. A new furnace costs around $3,000 to $5,000, but will pay for itself in lowered bills over time.
4. Make the switch to gas. If you’re currently heating your home with electricity or oil, you’re likely spending more each month than you would if you switched to natural gas. Gas furnaces are much more efficient than oil or electric heaters, which can save as much as 30 percent on energy bills each month.
The cost to install a new gas system in your home is around $6,000 to $8,000, assuming you have ducts already in place. This upgrade makes the most sense if your current heating system is over 10 years old, as you’ll see the largest gains. The typical ROI of a new gas furnace system is around 15 percent, which means that it will pay for itself in just 6 years.
5. Complete an energy audit. Your home may be losing a great deal of the energy you use to heat it, without you even realizing it. An energy audit—or a comprehensive look at how your home uses and loses energy—will help you find ways to make your home more efficient overall.
An energy audit costs about $150, and many times this cost will be rolled into any upgrades you may choose to make, allowing you to save more. Conducting an energy audit before you have any other work or upgrades done on your home can help you make better informed decisions about the space, maximizing your potential efficiency and savings.
The Federal Reserve voted to leave its short-term rates unchanged on Wednesday but it did indicate that a rise to its short-term interest rates is likely on track for later this year.
Read more: Could Rising Rates Be Good for Housing?
"The basic message here is U.S. economic performance has been good," Fed Chairwoman Janet Yellen said at a press conference following the Fed’s two-day policy meeting. "The American people should feel the steps we have taken to normalize monetary policy ... are well justified given the very substantial progress we've seen in the economy."
The Fed kept its key rates near zero for seven years. But since 2015, it has gradually raised rates by a quarter of a percentage point four times. Most recently it raised rates in June at a range of between 1 percent and 1.25 percent. Mortgage rates are only loosely tied to the Fed’s short-term rates, but the Fed’s actions do have some influence.
Mortgage rates, for example, have benefited from the Fed’s purchases of more than $1.7 trillion in mortgage-backed securities and rates have been near their lowest levels of the year, according to the Mortgage Bankers Association.
The Federal Reserve indicated after its meeting that it will start next month to unwind its purchases of mortgage-backed securities and U.S. government bonds. But any movements likely will be done so at a gradual pace.
“That means that mortgage rates would rise up only modestly over time,” says Lawrence Yun, the chief economist of the National Association of REALTORS®. “Given the pace of unwinding asset purchases with the fewer rounds of anticipated short-term rate hikes over the next two years, it’s expected that mortgage rates should still remain at historically attractive levels.”
Yun predicts that the 30-year fixed-rate mortgage may rise to slightly above 4 percent by the end of the year, and may reach just 4.7 percent by the end of 2018.
Source: “Fed to Start Paring Holdings, Keeps December Rate Rise on the Table,” The Wall Street Journal (Sept. 20, 2017) [Log-in required] and National Association of REALTORS®
Article Submitted by Fixr.com
With warmer weather and longer days, summer is the ideal time of year to take on a project in or around your home. Many contractors and other pros often find this time of year a little slower, as many homeowners are waiting until fall to tackle big interior projects, which means that you’ll have an easier time finding the right person for the job.
These eight projects are designed to add value to your home, without breaking the bank at the same time. Tackling them now will make your home more comfortable for the coming months, while ensuring that you can get maximum ROI when the time comes to sell.
1. Fix Window Leaks
Air gap around your windows could be driving your air conditioning bill up higher than it needs to be this summer. Old or leaking windows can cause you to lose as much as 20% of the energy you use to heat and cool your home, which can also make it less comfortable as well.
There are two ways to fix window leaks: installing new replacement windows, or installing weatherstripping around your existing windows. While both will help you save money on your energy bills, replacement windows will also help you recoup about 73.9% ROI at time of resale.
Cost: Weatherstripping your windows costs around $168 on average, while replacement windows cost between $650 and $1,500.
Money Saving Tips: Get an energy audit done on your home before you start replacing windows. You may find that only a few need to be replaced, while the rest can be caulked or weatherstripped to save.
2. Basement Remodel
Remodeling your basement is a great way to increase your existing living space, without the hassle or expense of a major addition. Basements are often cooler in the hot summer months than the rest of the home, so remodeling can help you gain more usable living areas during this time of year. A basement remodel featuring things like waterproofing or french drain installations can also recoup you about 70% at time of resale.
Cost: A full basement remodel including a new bathroom can cost around $50,000. However, waterproofing costs around $5,000, while installing a new set of stairs costs around $1,000 to $2,000.
Money Saving Tips: Simply waterproofing your basement will help make the area livable, allowing you to simply paint the concrete walls and floors, and begin furnishing the room for less.
3. Bathroom Remodel
Bathrooms are among the most frequently used rooms in the home. During the humid summer months, older bathrooms can often become home to things like mold and mildew, which makes now the best time to start remodeling. A bathroom remodel, including all new fixtures, shower, and ceramic tile can recoup you around 64.8% at time of resale, while making your home healthier and more functional at the same time.
Cost: A full scale bathroom remodel costs around $18,000. However, there are many components that can be done for less, such as installing a new bathroom fan to help dry out the room for $350 – $400 or putting in a new mirror for $120 – $150.
Money Saving Tips: Cosmetic updates to an otherwise functional bathroom can save you a lot of money. Simply painting the walls or replacing the sink and faucet can give your bathroom a facelift for less.
4. Add Attic Insulation
Another way to help lower energy costs this summer is to add some insulation to your attic. Most homes are underinsulated, particularly in this area, which can contribute to higher energy costs. Insulating your attic will make your home more comfortable, while saving you money on your AC bill this summer. Best of all, attic insulation recoups a whopping 107% at time of resale.
Cost: The cost to insulate an attic is around $400 for fiberglass insulation.
Money Saving Tips: Purchase the highest R-value you can find for your climate, and you’ll save even more on your energy bills year round.
5. Build a New Deck
Enjoy more time spent outdoors this summer on a new wood deck. Decks increase your usable outdoor space, make entertaining easier, and have a rate of return at around 71.5%. Start this project early in the summer to make the most of your new space before fall.
Cost: The average cost to build a new deck is around $10,630.
Money Saving Tips: If you have an existing deck, consider having it repaired, rather than replacing it. Often pressure washing and staining a deck, while replacing some of the boards can help extend its life.
6. Replace Your Roof
After a long winter filled with ice dams, your roof may be in poor condition and in need of replacement. Don’t wait until summer storms send water pouring in through your ceiling; have your roof taken care of at the start of the season to ensure that it’s in good condition for the rain to come. A new roof will help you recoup about 68.8% at time of resale as well.
Cost: The average cost of a roof replacement is around $6,000.
Money Saving Tips: If the majority of your roof is in good condition, you may want to opt for a partial replacement or roof repair to save money.
7. Replace Your Siding
Siding is just as important as your roof when it comes to both protecting your home from the elements, and to giving it its curb appeal. The nicer weather of the summer makes this the ideal time of year to take care of this important project. Replacing your siding can recoup you as much as 76.4% at time of resale. Replacing your siding can also help you take care of other issues such as rotting fascia, and can improve the appearance of your home at the same time.
Cost: The average cost of replacing your siding is around $7,510 for vinyl siding.
Money Saving Tips: If your siding is in decent condition, consider making repairs to those areas that require it, and painting the entire exterior to give it a fresh look for less.
8. Universal Bathroom Design
Universal design is one of the newest trends that’s recouping costs in a big way. In many cases, universal design costs less than a complete bathroom remodel, but can make your home easier to sell because it appeals to a wider group of people. Take on the project this summer when plumbers aren’t as busy to get the job done faster. This type of project also recoups about 68.4% at time of resale.
Cost: The average cost of universal bathroom design is around $9,000.
Money Saving Tips: Many things in a universal bathroom can be installed DIY for less, including lever handles on faucets and a universal height toilet.
To find out more about projects you can tackle around your home, be sure to visit the Cost Guides.
Your clients may be able to shave up to 30 percent off their energy bills this fall by conducting appropriate preparation measures on their home. For example, stripping and caulking the home to prevent drafts could be a major money saver, according to WIN Home Inspection.
WIN President Steve Wadlington offers the following five tips to share with your clients on how to clean and update the home to get it cold weather-ready:
Source: WIN Home Inspection
“Projects that take a home significantly beyond community norms are often not worth the cost when the owner sells the home,” says Scott Robinson, president of the Appraisal Institute. “If the improvements don’t match what’s standard in a community, they’ll be considered excessive.” Lifestyle website CheatSheet.com highlights a few renovation mistakes that could inadvertently lower a home’s resale value.
Source: “5 Ways You Can Accidentally Lower Your Home’s Resale Value,” CheatSheet.com (Aug. 24, 2017)
Borrowers applying for a 30-year fixed-rate mortgage this week locked in the lowest rate of the year, as it dropped to its lowest average since November 2016, Freddie Mac reports. Additionally, “the 10-year Treasury yield fell 6 basis points this week amid concerns over lagging inflation,” says Freddie Mac chief economist Sean Becketti.
Freddie Mac reported the following national averages with mortgage rates for the week ending Aug. 24:
Source: Freddie Mac
Kitchen remodels don’t come cheap. The average cost to update a 200-square-foot kitchen—including installing new flooring, semicustom wood cabinets, and standard appliances—is a whopping $62,000, according to Remodeling Magazine. Homeowners who want to add in more luxurious touches, such as stone countertops, a commercial-grade cooktop, designer faucets, and top-of-the-line custom cabinets, may pay as much as $123,000.
Before your clients gut their kitchen, advise them to consider more affordable options that can still make a big impact at resale. The New York Times recently spoke with designers to get some of their best budget-friendly tips for remodeling a kitchen.
Try painting or resurfacing cabinets instead of replacing them. “A bold color and modern hardware can breathe new life into old, ordinary cabinetry,” interior designer CeCe Barfield Thompson told the Times. She gave her own 1990s-era kitchen a makeover by painting the cherry wood cabinets a smokestack gray color. She also covered pea-green tile floors with a parquet charcoal laminate surface. She says the renovations cost her $7,050, which included the labor, laminate flooring, paint, and new cabinet handles and drawer pulls.
You can also reface or resurface dated cabinets, keeping the existing cabinet framework and replacing the doors, drawer fronts, and side panels. New York–based designer Carolyn DiCarlo, who used this approach when working on a Manhattan loft, says new cabinets would have cost about $22,000—but the price to reface was just $2,500.
Consider alternative materials for countertops. Instead of choosing high-end items such as quartz or stone, go for less expensive options such as butcher block. This material can be purchased for as low as $99 in standard sizes. “It’s kind of like having a built-in cutting board throughout your kitchen,” says Kimberly Winthrop, an interior designer in Santa Monica, Calif. She says she paid $500 for a 20-foot butcher block to use in a recent kitchen makeover. But it requires some maintenance: Butcher block typically needs to be sanded and oiled twice a year.
Keep the layout intact. “Moving walls, electrical, and plumbing is where installation costs spike,” says Dana Hudson, divisional merchandising manager for kitchens at Home Depot. Mina Fies, a Reston, Va.–based designer and creator of RenovationRoadmap.com, recalls a client who wanted to reconfigure the kitchen walls to allow for more natural light. The layout changes would have required moving plumbing. Fies says she was able to show the client a design that met her needs but did not open up the walls, instead installing recessed lighting, pendant lights, and under-cabinet lighting. The client saved $8,000, Fies says.
Source: “Seven Ways to Save on Your Kitchen Renovation,” The New York Times (Aug. 11, 2017)
First-time home shoppers come to you eager to buy, but there’s a lot they need to do before they start touring listings and submitting offers. Make sure you keep them on track so that the path to closing is smooth. Here are a few items you can remind them to do to make sure their finances are in order.
1. Determine total monthly housing budget.
What can your clients really afford? The total should include estimated taxes and home insurance costs, too. After all, in some places, that can double your mortgage payment. Buyers should be encouraged to talk to an insurance agent to get an estimate of the costs in the areas in which they’re looking to buy. Mortgage financing giant Fannie Mae recommends home buyers spend no more than 28 percent of their income on housing. Buyers may start to struggle financially when housing costs take 30 percent or more of their income, financial experts warn.
2. Factor in the closing costs.
Buyers shouldn’t be blindsided by the cost of a transaction. Be sure you explain everything from origination fees, title and settlement fees, taxes, and prepaid items (such as homeowners insurance or homeowners association fees). They’ll get more precise numbers from their lenders as they get through the paperwork, but a general estimate will help them ensure they’re shopping within their budget from the onset.
Read more: 4 Expenses Your Buyers Don’t Expect
3. Examine creditworthiness.
Will your client even be able to qualify for a loan? Buyers should get a free annual credit report and look for any errors or unresolved issues. They should contact the credit reporting bureau immediately if they spot any errors. They also might want to determine their FICO credit score, which many lenders use to help determine an interest rate for financing.
4. Prepare documents.
Buyers will need to be ready to show a lot of documents when applying for a home loan. These include pay stubs, bank account statements, W-2s, tax returns for the past two years, statements from current loan and credit lines and names and addresses of landlords for the past two years. Gathering these together ahead of time will help make the process smoother and faster.
5. Get preapproved.
This not only helps buyers get a better understanding of what they can truly afford, but it also puts them in a better position to submit an offer when they find a home they love. Also, financial planners say applying to multiple lenders in the same month may help boost a buyer’s chances of getting a loan approved at the best rate possible without dinging their credit score too much.
Source: “11 Must-do’s for the First-Time Homebuyer,” Las Vegas Review-Journal (Aug. 7, 2017)
Home buyers would be wise to interview a home inspector before they hire one. But what should they ask? Here are a few questions to consider.
Read more: Do You Trust Home Inspectors?
1. What do you check?
A home inspector will look at everything from the roof to the foundation and in between, Frank Lesh, executive director of the American Society of Home Inspectors, told realtor.com®. But they are restricted to visual, general inspections. A specialist may be needed for further investigation on some items. Buyers will want to get a clear understanding of what the inspector will and will not be checking. For example, will they scrutinize the inside of the fireplace or the well and septic systems? Read: 4 Things Home Inspectors Don’t Often Check
2. What do you charge for an inspection?
Home inspections typically cost between $300 to $600. That will depend on the size of the house and the market area, however. Lesh cautions buyers about choosing an inspector based on a low price alone. “That’s often a sign they’re having trouble getting customers,” he says.
3. How many inspections have you done?
You can’t discount a home inspector just because they’re new on the job. That doesn’t mean lower quality. But experience is also important, especially if your home is an older one or something with unusual home features, realtor.com® notes.
4. Can I come along during the inspection?
Inspectors should want you present during the inspection. They’ll be able to explain the home’s system and how it works. The opportunity also gives you the chance to ask questions and get clarifications. A red flag would be a home inspector who asks you not to join him or her.
5. Can I view a sample report?
You may find it helpful to see an inspection report of someone else’s home inspection. While every home has problems, many aren’t a big enough deal to jeopardize a sale. A sample report may help prevent you from panicking if you see something come up on your report and also give you more of a feel for the information you’ll be receiving from your inspector.
Source: “7 Questions to Ask a Home Inspector Before Your Home Inspection Even Begins,” realtor.com® (Aug. 1, 2017)
The Federal Reserve said on Wednesday that it will hold off on making any increases to its short-term interest rate, at least for a while longer. The Federal Open Market Committee voted to keep the federal funds rate at its current range between 1 percent and 1.25 percent.
“In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1 to 1 1/4 percent,” the committee said in a statement on Wednesday. “The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.”
Fed Chair Janet Yellen recently indicated to Congress that Fed officials will continue to closely monitor inflation and hinted at a third rate hike sometime this year. Yellen has said that the Fed will continue to use its short-term rate as its main tool for controlling inflation or stimulating the economy.
“The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further,” the committee released in a statement on Wednesday.
The Fed has raised its benchmark rate so far twice this year (in March and June).
Mortgage rates aren’t directly tied to the Fed’s short-term interest rates but they do tend to follow them.
Source: “Fed Elects to Hold Off On Interest Rate Hike,” HousingWire (July 26, 2017) and “Fed Stands Pat on Rates, Signals Sept. Cut in $4.5T Balance Sheet,” USA Today (July 26, 2017)