December 31st, 2018 7:54 PM by Richard Sardella MLO.100007700/NMLS 233568
Net-zero energy homes are the future
We kept saying how it could someday happen, but few of us thought it actually would. More homes may soon be energy-free, according to a recent article in Realtor.com. Homes and commercial buildings consume 40 percent of all energy used in the U.S., but the growth of net-zero homes could drastically curtail that. The Zero Energy Ready Homes (which make their own energy) are becoming more of a reality.
It was reported that in 2017, 8,547 units of net-zero housing or zero-already housing had been built in the U.S., with 38,863 under construction. That growth is expected to get a big boost when California’s new law takes effect in 2020, which will require all new homes to be net-zero, while commercial buildings will have a deadline of 2030. The European Union must meet that same goal by 2020 for all new buildings in Europe.
New technologies have significantly reduced in price over the past decade, which has helped to make net-zero homes more possible, according to the article. “Costs are changing quickly,” Alisa Petersen, a senior associate at Rocky Mountain Institute, an energy, and environmental think tank, told The Wall Street Journal. “You don’t have to throw every efficiency measures at a home to make it net-zero.”
Net-zero homes aren’t like other homes. They are sealed tightly against drafts and are well-insulated to prevent heat leaks through the walls, windows, and doors. An energy recovery system helps prevent stale air, humidity, and mold issues. Solar panels play a big role in net-zero homes, which tend to be quieter and freer of pollution than conventional structures.
While net-zero homes cost more up front to build, they can save homeowners money on their energy bills to help recoup that initial investment. Eventually, that savings adds up and the home can pay for itself, no matter where you live, a new study shows.
Net-zero energy homes usually are outfitted with rooftop solar panels, energy-efficient insulation, triple-pane windows, energy-savvy appliances, LED lighting, and smart thermostats. Builders will take the home’s design and natural lighting into account too, such as the position of windows and overhangs that could supply additional solar heating in the winter or shade in the summer months.
Research nonprofit Rocky Mountain Institute looked at how long it takes for the savings on a net-zero home to cover the initial costs of a 2,200-square-foot home in the 30 largest U.S. cities. Because the costs of building net-zero homes can vary widely geographically. The biggest savings tend to be in locales with high electricity rates and older building codes. For example, it only takes 7.8 years to pay it off in San Francisco, while in New York it takes 10.1 years and in Phoenix about 10.7 years, Los Angeles takes 11 years, and Dallas and Seattle are close to the same, with 12.4 and 12.5 years respectively.
How Rates Move:
Conventional overnment (FHA and VA) lenders set their rates based on the pricing of Mortgageand G-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market improved by +20 bps. This was enough to move rates or fees lower last week. There was a good deal of rate volatility throughout the week.
This Week's Rate Forecast: Neutral
Three Things: These are the three things that have the greatest ability to impact mortgage rates this week. 1) Trade Wars, 2) Jobs and 3) Government Shutdown.
1) Trade Wars: The U.S./China trade negotiations continue to get the most attention and weight from markets. We open the week with some potentially positive momentum in trade talks as over the weekend, President Donald Trump said he had a “very good call” with Chinese President Xi Jinping to discuss trade. The president also said that “big progress” was being made on this front. There will also be a meeting on January 7th between members on both sides.
2) Jobs: Big Jobs Friday will bring us the very closely watched Average Hourly Earnings data. The market expects that the YOY data will continue to be in the 3.0% to 3.1% range with no change in the Unemployment Rate which is currently at 3.7%.
3) Government Shutdown: With Legislators on break this week, there is no movement expected on the stalemate over the current partial government shutdown. The BLS has said it will still release the Jobs data and next week's CPI data but after that, we could start to see many key economic reports delayed as those departments are closed.
This Week's Potential Volatility: Average
Bond market closes early today and will reopen on Wednesday. We're not expecting a lot of movement or volatility from rates this week until maybe Thursday. Of course, Friday's jobs report and the average hourly earnings could cause rate volatility.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.