(from CNBC.com)
Six months after devastating wildfires in Los Angeles, many neighborhoods are still in ruins, and rebuilding has become deeply tied to whether homeowners can get or afford insurance. While some policies are being renewed and rebuilding is underway, insurance premiums in California are expected to rise 21% this year, and many families are already stretched thin.
Experts say rising costs aren’t just a California issue.
States like Louisiana, Colorado, and even Vermont are seeing double-digit increases due to wildfires, floods, and severe storms. Nationally, the average premium is projected to hit $3,520, with companies raising rates to offset increasing disaster payouts and the growing cost of rebuilding homes. Insurance companies are trying to balance risk nationwide, which means higher rates and fewer coverage options, even in areas that haven’t seen recent disasters.
Insurance companies are also becoming more selective, in some cases dropping coverage or exiting high-risk areas entirely. For many, the ability to keep their home now depends on being able to keep their policy.
Read more here
FHA Eyes “Buy Now, Pay Later” Debt in Housing Decisions
(from HousingWire.com)
The FHA is taking a closer look at Buy Now, Pay Later (BNPL) loans (you know, those popular installment plans you see at online checkouts) to understand how they might impact housing affordability.
These loans don’t currently show up in mortgage underwriting, but that could change, especially as more people use them without realizing they still count as real debt.
A recent report showed that 1 in 5 credit-holding consumers used BNPL in 2022, and 60% of them were “heavy users.” While default rates are low (around 2%), there’s concern that too much short-term debt could chip away at a borrower’s ability to afford rent or a mortgage.
The FHA wants feedback by August 25 and is thinking about whether these “phantom debts” should be factored into lending decisions. For now, BNPL loans are often excluded from mortgage math if they’re small or paid off within 10 months, but with changes on the horizon, that might not last forever.
Heads up if you’re juggling Afterpay and a home loan at the same time… the two worlds might soon collide.
Read more here
Social Space
Our Top Social Links of the week
Video:
Homeowners are investing in repairs and remodeling – Watch here!
Read:
Michael Scott’s condo is for sale on Zillow – Read here!
See:
The most insane and unique home finishes we’ve ever seen – See here!
Read:
Home equity myths BUSTED – Read here!