A standard renters insurance policy typically covers your personal belongings should they be damaged, destroyed or stolen. Renters insurance also covers liability in case someone is injured or someone else’s property is damaged, as well as any medical payments. Lastly, it can pay for additional living expenses should your place become uninhabitable.
So, how does renters insurance work? Let’s talk about what renters insurance is, the specifics of what it covers, and how much it might cost to hop on a policy.
Renters Insurance Basics
Renters insurance offers financial protection to tenants in case anything were to happen to their personal property and in the instance of legal liability.
If you’re a renter, you may think that your landlord will foot the bill should there be a break-in and some of your belongings get stolen, or if there’s a fire in your apartment building. While a landlord might have insurance in place to cover the building, their insurance won’t cover your items should they get damaged or stolen, or pay for additional living expenses should you need to temporarily move out while your unit undergoes repairs. Rather, these are the types of things that renters insurance covers.
While renters insurance offers similar coverage to homeowners insurance (aside from covering the building, which is the landlord’s responsibility), it is generally much less costly. Some landlords require renters insurance, but not all do. 💡 Quick Tip: Online renters insurance can cover your belongings not just at home but also in your car and on vacation.
What Is Covered by Renters Insurance?
In a nutshell, standard renters insurance covers four main areas:
• Personal possessions
• Liability
• Living expenses
• Medical payments
Let’s take a closer look at each area.
Personal Property Damage
Renters insurance will cover your personal belongings if they are lost or stolen from common incidences such as:
• Theft
• Fire
• Smoke
• Lightning
• Vandalism
• Explosions
• Water-related damage from utilities on the property
• Windstorms
• Any other disasters, risks or other events listed in your policy
As mentioned before, unlike homeowners insurance, a standard renters policy typically doesn’t provide financial protection and pay for repairs to the actual structure of the building in which you live.
Renters insurance also will not cover damage to personal property during an earthquake or flood, but you can get add-on insurance or a separate policy altogether so that both are covered. If you get comprehensive renters insurance, damage and destruction from hurricanes and storms can be covered, but this type of policy usually costs more.
Liability
A standard renters insurance policy will also protect you financially should you, a family member or, in some cases, a pet cause injury or damage to other people or to their personal property. It could cover the costs of lawsuits, up to the limit of the policy, and the expense of repairing or replacing another person’s property or belongings if you are at fault.
However, it won’t replace your personal belongings or property should you, a member of your family, or your pet cause damage to your own property.
For example, let’s say you’re walking your dog, and your dog has a run-in with another canine. Chaos ensues, and your dog damages a neighbor’s fence. In that case, your renters’ insurance policy will pay to replace the fence. On the other hand, if your dog is chasing a squirrel while on her leash and tears up your mailbox, you’re out of luck. Your renters insurance policy won’t cover that.
Living Expenses
Should you become unable to live in your home and need to temporarily move out due to a covered natural disaster like a tornado, or another incident or event like damage from a fire or a storm, a standard renters insurance policy can cover the cost of additional living expenses.
This can include costs such as meals out and accommodations. It could also pay for pet boarding, the cost of doing laundry outside of your home, and storage costs. What’s covered would be based on your normal living expenses and lifestyle.
Medical Payments
Medical payments are covered under the liability portion of your insurance policy. If someone were injured in your home — say a delivery person slips and falls on your premises or your dog bites a neighbor in your apartment building — your policy can cover medical bills or funeral expenses up to a certain amount. On the other hand, if you, your family member, or your pet were injured, renters insurance would not cover that.
Unlike the liability portion of a renters insurance policy, medical payments coverage will pay for medical bills no matter who is at fault.
Recommended: Choosing a Renters Insurance Deductible
How to File a Claim
Need to file a renters insurance claim? Here’s the general process you can expect to follow:
1. Document the damage or loss: To file a renters insurance claim, you’ll first want to gather as many details about the incident as possible, including what exactly happened, when and where it happened, who was involved and what was damaged or taken. Take detailed notes and photos.
2. Tell your landlord: Next, notify your landlord. That way, if there’s any structural damage to where you live, they can handle it on their end.
3. File a police report if necessary: If there was damage to your property or loss of items due to burglary, theft, vandalism or an incident with ill intent, you’ll want to file a police report.
4. Reach out to your insurance company: You’ll then want to reach out to your insurance company and file a claim. Generally this must be done within a certain timeframe, such as two or three days. You’ll typically need to provide your policy number as well as all of the details and supporting evidence you’ve gathered. This will help the insurer to gauge what will and won’t be covered. Often, someone will come by to assess the damage.
5. Make any updates if needed: If there were any unexpected or additional costs along the way, such as staying at a short-term rental home while your place gets repaired, meals out because you couldn’t use your kitchen or personal possessions you later realized were damaged or missing, then you can update your claim along the way.
💡 Quick Tip: It’s important to create an inventory of your personal possessions in case you ever need to file a renters insurance claim. One easy way to do that is to walk through your home and photograph all your belongings — especially anything of value.
How Much Is Renters Insurance?
Average annual cost of renters insurance: $15-$30 a month
According to the most recent data from National Association of Insurance Commissioners (NAIC), the average cost of a renters insurance policy is $15 to $30 a month. However, the cost can vary depending on a handful of factors, including:
• Where you live
• Type and amount of coverage
• The size and construction of your building
• Your deductible
• Security and prevention measures in place
• Any discounts
• Your claims history
Recommended: Most Affordable Renters Insurance for Apartments
The Takeaway
While not required by your landlord, renters insurance can help cover your personal belongings, additional living expenses and liability should there be an incident, disaster, or theft where you live. To figure out how much coverage you need, it’s a good idea to take inventory of your items.
Looking to protect your belongings? SoFi has partnered with Lemonade to offer renters insurance. Policies are easy to understand and apply for, with instant quotes available. Prices start at just $5 per month.
Explore renters insurance options offered through SoFi via Experian.
Photo credit: iStock/humanmade
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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The housing market cheered as the Federal Reserve signaled interest rate cuts next year after making a series of rapid rate hikes starting in 2022.
While the central bank did not completely rule out the possibility of a rate increase in 2024, that action seems unlikely. Instead, fresh economic projections from central bank officials showed rates would be slashed to a median 4.6% by the end of 2024, suggesting three 25 basis points (bps) cuts from current levels.
The so-called dot plot estimates show interest rates falling to a median 3.6% in 2025, indicating four more 25 bps cuts. For 2026, Fed officials projected rates to fall below 3% by the end of 2026 through three more quarter percentage point reductions.
What does this mean for mortgage rates?
“Mortgage rates should get better. If the spreads get better, that will be an extra plus,” said Logan Mohtashami, lead analyst at HousingWire. “The main focus now is that if the economic data gets weaker, bond traders have the green light to take yields lower.”
Mortgage rates track the yield on 10-year U.S. Treasuries, which move based on anticipation about the Fed’s actions, what the Fed ends up doing and investors’ reactions. When Treasury yields go down, so do mortgage rates. The 10-year Treasury yield hit a low of 4.007% following the Fed’s press conference, declining from 4.202% at market open on Wednesday.
“While nobody in the mortgage world would say ’tis the season to be jolly’ based on current market conditions, the Fed’s outlook at its December meeting points to an increased possibility of a happier new year,” said Marty Green, principal at mortgage law firm Polunsky Beitel Green.
Expect lower mortgage rates
With the central bank shifting toward the next phase in its fight against rapid inflation, experts expect the path for monetary policy to support further declines in mortgage rates, just in time for a traditionally busy spring housing market.
“The commentary about three expected cuts next year and no rate hikes is great news for the mortgage industry,” Michael Merritt, senior vice president of customer care and default mortgage servicing at BOK Financial. “These cuts will allow mortgage rates to fall faster throughout 2024. The conservative expectation of three cuts also paints a positive overall outlook since they are not expecting to have to make large numbers of cuts to fuel economic growth or make increases to offset inflation.”
After hovering below 8% at the time of the last FOMC meeting in November, mortgage rates sit at just under 7%, according to HousingWire’s mortgage rate center on Wednesday.
“We’re probably at an inflection point where rates have come down enough that more buyers are coming back into the marketplace,” said Melissa Cohn, regional vice president of William Raveis Mortgage.
While mortgage rates are expected to decrease, high home prices combined with low inventory still pose a challenge for potential homebuyers.
“We don’t expect rates to fall that much in this period and it may not offset rising home prices in hot housing markets. So, homebuyers who wait on the sidelines for better rates next year may find the waiting game didn’t pay the dividends they expected,” said Max Slyusarchuk, CEO of A&D Mortgage.
The median price of single family homes in the U.S. is $424,900, which is up 2.4% from last year at the same time, according to Altos Research.
“There are really no national indicators, anywhere in the data, that show home prices currently falling,” Mike Simonsen, president of Altos, said in a recent commentary.
While inventory typically rises with higher mortgage rates and falls with lower mortgage rates, there is no signal of any flood of sellers, which would be bearish for home prices, Simonsen noted.
For there to be a supply-demand balance, rates would need to stay higher and cuts would have to come slower than markets are predicting, according to Jack Macdowell, chief investment officer at Palisades Group.
“The housing market plays a role in this given the contribution to headline inflation calculations,” Macdowell said.
“If rates come down too much (and mortgage rates follow), we’ll see the current supply-demand imbalance exacerbated as pent-up demand gets released into an undersupplied market, putting upward pressure on home values–and inflation. Until mortgage rates drop below 6% it is unlikely that pent-up deferred sales will meaningfully contribute to supply.”
Navigating the process of home inspections in South Dakota can be a daunting task for many homebuyers, especially those who are new to the real estate market. This comprehensive guide is designed to demystify the home inspection process, offering crucial insights and practical advice specifically tailored for those looking to purchase a home in the beautiful state of South Dakota. So whether you’re looking at homes in Sioux Falls or anywhere else in the Mount Rushmore State, here’s Redfin’s guide on what you need to know about South Dakota home inspections.
Why should you get a home inspection in South Dakota?
Investing in a home is a significant financial commitment, making a thorough home inspection in South Dakota a crucial step in the process. A comprehensive inspection can uncover potential issues, ensuring you make the right decision about your purchase. From finding structural issues to assessing the condition of electrical and plumbing systems, a professional inspection provides a holistic view of the property, offering peace of mind and potentially saving you from unexpected expenses down the road.
Are there any specialized inspections that South Dakota buyers should consider?
In South Dakota, buyers may want to consider specialized inspections based on the property’s unique features or location. For homes in flood-prone areas, a flood risk assessment is advisable. Similarly, properties with extensive acreage may benefit from a thorough well and septic system inspection. Mold and radon testing are also prudent in certain regions. Customizing inspections to suit the property’s characteristics ensures a more targeted evaluation, addressing potential issues specific to the South Dakota landscape and climate.
Are home inspections required in South Dakota?
While South Dakota doesn’t legally require home inspections, they are highly recommended and often considered a standard practice in real estate transactions. “Home inspections are not required in South Dakota, but 92% of all homes that are sold are inspected in South Dakota,” says Nick Gromicko, founder of the International Association of Certified Home Inspectors. Opting for an inspection is a proactive choice that serves the buyer’s best interests. It provides valuable information about the property’s condition and can be a negotiating tool in the buying process, allowing buyers to address issues or negotiate repairs before finalizing the deal.
How much does a home inspection cost in South Dakota?
The cost of a home inspection in South Dakota varies based on factors such as the property’s size, age, and additional services requested. On average, expect to invest a few hundred dollars. While the upfront expense may seem significant, it’s a small price to pay for the peace of mind and potential cost savings that come from identifying and fixing issues early on.
Can you sell a house in South Dakota without an inspection?
In South Dakota, sellers are not required to conduct a home inspection before listing their property. However, many sellers opt for pre-listing inspections. This approach allows them to address potential issues beforehand, presenting the property in the best possible light and potentially speeding up the selling process. While not mandatory, a pre-listing inspection can be a strategic move for sellers looking to be transparent and build buyer confidence.
Any other information or advice for South Dakota residents regarding home inspections?
Brad Banks of Black Hills Professional Home Inspections, based in Rapid City, recommends getting an independent home inspection from someone who doesn’t work with your realtor to get an unbiased opinion. “Your inspector should be working for the buyer, not the sale,” he says.
South Dakota home inspection: the bottom line
Regardless of where you choose to live, it’s important to understand the ins and outs of a home before buying. That’s what makes South Dakota home inspections so important. By having the important elements of your potential home looked at by professionals, you can eliminate the guesswork and avoid extra expenses.
Inside: Are you finding yourself struggling to cover unexpected expenses? This guide will teach you how to create a financial plan and budget that will help you avoid costly surprises.
Life is full of surprises, and not all of them are pleasant. Sometimes, these surprises come in the form of unexpected expenses, hitting when one least expects them.
This can leave you devasted financially. Over the years, we have been slapped with unplanned costs and left scrambling.
However, you can successfully navigate through the rollercoaster ride of money management.
The key is knowing “What are unexpected expenses?’ Along with the knowledge equips you to avoid or mitigate them.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What are Unexpected Expenses?
In the realm of personal finance, unexpected expenses are costs you haven’t foreseen or budgeted for. They strike out of nowhere, leaving you scrambling to balance your finances.
These expenses differ from other cost categories such as fixed expenses (weekly, monthly, and recurring costs like rent) and variable expenses (those that do not happen regularly but vary in cost like groceries).
The crux lies in not being able to anticipate these unplanned expenses, making them disruptive to financial plans.
What is an example of unplanned spending?
Unplanned spending often occurs when there’s an unforeseen event that demands immediate financial attention.
Picture this scenario: You take your car for a routine inspection; however, the car fails the inspection due to a defective part that needs immediate repair. Initially, you hadn’t allocated funds for this, but now you have to deal with this unforeseen cost – a classic case of unplanned spending.
Common Examples of Unexpected Expenses
Unforeseen financial events can leave many unprepared and struggling, adding unnecessary stress. This section will delve into examples of typical unexpected expenses that individuals often encounter, providing key insights into how to efficiently incorporate these into your financial plan.
By understanding and preparing for these unexpected expenses, one can effectively mitigate the surprise factor they pose, promoting a healthier and more secure financial state.
We have overcome many times and you can too!
1. Medical Emergencies and Healthcare Costs
Medical emergencies are prominent examples of unexpected expenses. Even with health insurance, costs can amass, thanks to high deductibles, co-payments, and therapies not covered by insurance.
One factor is paying for the medical costs, but the other weighing factor is loss of income when dealing with medical emergencies or critical diseases like cancer.
Overcome this by:
Contributing the max each year to your Health Savings Account (HSA). This way you have a bucket of money just for medical expenses.
Look into short-term disability insurance that can cover part of your lost wages while you can’t work.
2. Automatic Home or Vehicle Repair Needs
Home and vehicle repairs often sneak up as unexpected expenses. Time, accidents, natural disasters — all can cause wear and tear that demands immediate repair. The consequences of ignoring these repairs can be hefty.
Similarly, significant home repairs such as fixing a faulty HVAC system or leaky roof can set you back by thousands of dollars.
Overcome this by:
Be proactive with routine maintenance. Take care of your house and car before problems escalate.
Save the same amount each month for home and vehicle repairs separately.
Personally, we save $100 monthly for car repairs as one is a beater car. This amount will be increased to $350 to start saving for a new car. Conversely for home repairs, we keep a minimum of $1000. This amount will fluctuate depending on when we last did a major repair. Since we just replaced our HVAC, our funds are lower.
3. Natural disasters
Natural disasters, such as hurricanes, earthquakes, wildfires, and floods, lead to unexpected spending. The impact of these events can cause significant damage to homes, cars, and other property, leading to repair and replacement costs.
Furthermore, these situations might also necessitate expenses for emergency supplies, temporary shelter, and other necessities. For instance, Hurricane Katrina inflicted a staggering $196.3 billion in damage, illustrating the overwhelming cost of such unpredictable events.1
Overcome this by:
Make sure you have proper insurance whether it is renter insurance or flood/wildlife insurance. Also, make sure you have the proper amount of insurance. As highlighted by the Marshall Fire where most people were underinsured. 2
Storing cash on hand at home in case of an emergency. A cushion of money will always be helpful.
4. Increase in Bills
Monthly bills are a constant in our lives, but what’s not constant is their amount. Landlords may raise the rent when leases are up for renewal, utility companies could increase their rates, and insurance premiums may also inflate periodically.
All these scenarios lead to higher monthly expenses. For example, the U.S. energy costs per household rose by 13% in 2022 reaching the highest percentage increase since it was measured. 3
Being unprepared for these increases can cause significant financial strain.
Overcome this by:
Get one month ahead on your bills. Then, you will start building a cushion. Also, known as aging your money – thanks to YNAB.
Be proactive and realize that with inflation high. All of your bills will likely increase in cost.
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5. Overlooked Taxes
Overlooked taxes pose another source of unexpected expenditure.
A higher than expected tax bill can indeed surprise and unbalance your budget. This happened to my friend when she started her own fitness coaching business.
Uncertainties in estimating the exact tax amount, mathematical errors in filing, or an overlooked quarterly tax payment often culminate in an escalated tax bill. An audit from the IRS, though it may find no additional taxes owed, can lead to expensive fees from a CPA or tax attorney.
Overcome this:
Use a tax calculator to know what your estimated tax payment due.
Understand the common reasons you may owe higher taxes this year.
6. Pet Emergencies
Pet emergencies can bite a large chunk out of your budget without warning. For instance, if your cat suddenly starts having seizures or your dog gets hit by a car, the medical costs associated can spiral rapidly.
Emergency vet care can range between a few hundred dollars to several thousand dollars. For instance, a poisoning can range from $200-$3000. 4
Overcome this by:
Prevention methods like pet insurance can help you manage these costs effectively.
Decide in advance the maximum you are willing to spend on emergency vet care.
7. Delayed payments
Delayed payments may not be an external expense, but the repercussions can be just as financially challenging. This affects your income stream, potentially leading to difficulty in managing your financial obligations.
For example, if an employer goes bankrupt, salaries might be delayed or even indefinitely withheld. According to research, late payments can cost businesses $3 trillion globally, affecting both personal financial planning and business operations.5
This is a highly stressful situation.
Prepare yourself financially by:
Aging your money. By getting one month ahead of your bills, you can scrap through a delayed payment. YNAB coined this term.
Start saving for a large rainy day fund.
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8. Gifts and Special Occasions
Commemorating special occasions can lead to unexpected expenses. Life events such as birthdays, weddings, baby showers, and retirements, traditionally require gift-giving.
While typical gift giving on Christmas or birthdays should be part of your planned variable expenses. Saying yes to being a bridesmaid can definitely set you back a few thousand dollars. These are costs that we often fail to factor into our budgets.
Overcome this by:
Setting aside money monthly to cover gifts and special occasions.
If saying yes to a special event will hamper your finances, then you may have to politely decline the invitation.
9. Unexpected Travel Costs
Unexpected travel costs can significantly impact your budget, particularly when they arise from unplanned events such as attending a funeral or a wedding. The costs of last minute travel can vary widely depending on the destination, distance, and mode of transportation.
To manage these expenses, consider driving or taking public transportation for shorter trips, exploring less expensive lodging options, and creating a meal plan that limits dining out.
Overcome this by:
Setting aside a regular amount in a travel fund can help prepare for these unexpected costs that tend to crop up every year.
Decide if taking the unplanned trip is something you can feasibly manage with your current financial situation.
10. What You Forget to Budget for
Some subtle but regular expenses often sneak past our budget plans. This is why we have a full list of budgeting categories so hopefully, you don’t miss anything!
Consider online subscriptions and memberships: Many services offer free trials, but the charges kick in if not canceled. Other overlooked budget items may include pet care, parking fees, and toll fills—small amounts that may seem insignificant but can considerably dent your budget over time.
Overcome this by:
Review your checking account and credit card bills to see all of your expenses for the past year. Write down those unexpected expenses that came through.
Now, make a plan for how to spend your money in advance with your findings.
This helps you prepare for unexpected expenses
Here are simple tips to make sure you employ the habits of a financially stable person.
Tip #1 – Building an Emergency Fund
Building an emergency fund is a fundamental strategy to brace for unexpected expenses. This fund acts as a financial buffer, providing the economic security to cover unexpected costs without tapping into monthly budgets or savings aimed at other goals.
As a starting point, aim to save $1000 and then work your way up to save a month’s paycheck. Start small and build over time – every penny set aside helps to mitigate future financial stress.
Tip #2 – Properly Utilizing Sinking Funds
Sinking Funds are a sagacious tactic to prepare for larger, infrequent expenses. They allow you to systematically and gradually save up for anticipated financial obligations such as vacations, holiday gifts, car maintenance, etc.
By assigning a specific amount to save each month, by the time the need arises, you’ll have a pool of money ready. With platforms like YNAB, creating sinking funds becomes easier, letting you monitor your progress month by month.
This is how we have less frequent unplanned costs than we did in our 20s.
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Tip #3 – Saving for the Larger Rainy Day
Beyond smaller emergency funds and sinking funds, saving for the ‘larger rainy day’ is a crucial tactic to avoid financial duress caused by unexpected expenses. This refers to padding your savings to cover larger, more substantial financial shocks that might require more than just a few months’ worth of expenses.
It may take time to build such a fund, but even a small contribution each month can result in substantial savings over time.
Tip #4 – Pick up a Side Hustle
One way to strengthen your financial resilience against unplanned expenses is to start a side hustle. This could mean picking up extra shifts at work, selling handcrafted items online, or using skills like photography or writing for freelance work.
With the rise of the internet, making money online is really easy and simple to get started. We have a few side hustles to shield against unforeseen costs.
Tip #5 – Budget Properly and Stick to It
Budgeting is an essential line of defense against unexpected expenses. By tracking your income and comparing it against both predictable and variable expenses, you can calculate how much money can be saved each month.
Regular budget check-ins help ensure you’re staying on track, steadying your financial footing.
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Tip #6 – Regular Review of Financial Plans
Regularly reviewing and updating your financial plans can serve as a preventative measure against unexpected expenses. Consider changes in income, expenses, and lifestyles, and adjust your savings and spending plans accordingly.
Tip #7 – Utilizing Digital Banking Features for Money Management
Digital banking tools have revolutionized financial management and can be part of a robust strategy to avoid unexpected expenses.
Features such as instant account balance checking, transaction alerts, set-and-forget savings transfers, budgeting tools, and proactive spending categorization help you grasp where your money is and how it’s being spent.
Tools to Ward Off Unexpected Expenses and Not Go into Debt
Unexpected expenses are inevitable, yet going into debt to cover these costs can lead to financial strain due to accumulated interest and fees.
Here are crucial steps in preventing unexpected expenses from turning into debt.
Dealing smartly with Credit Cards options
Credit cards can serve as a lifeline during a financial crunch but should be employed judiciously.
To smartly deal with unexpected expenses, consider options like 0% or low-interest credit card offers – these are particularly useful if you can pay off the balance during the introductory period. But tread with caution: high-interest rates can cause difficulties if you can’t pay off the balance in time.
Profit from Asking for a Paycheck Advance
In times when emergency expenses arise, asking for a paycheck advance can help. Some employers offer this as part of their policy to assist employees dealing with abrupt financial needs. A salary advance allows you to ‘borrow’ from your future earnings and repay the amount through future pay deductions.
Budgeting apps like Chime not only help in tracking expenses, but they also enable early access to your paycheck, up to two days before payday. This feature ensures you avoid running short of money at the end of the week or month, allotting you ample room to plan, track, and adjust your spending and savings.
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Exploring Personal Loans for Emergency Situations
Personal loans are a convenient option during urgent monetary needs. They are unsecured loans and therefore don’t require collateral.
However, they’re typically accompanied by relatively high-interest rates. Consider using online prequalification tools for personal loans to determine if you’re eligible and view potential interest rates.
Explore different lenders, but be wary of the terms and conditions to make sure you don’t invite more financial trouble.
Which of the following is true regarding unexpected expenses?
Unexpected expenses are costs that are not anticipated or planned for, such as sudden car repairs or medical emergencies.
To efficiently manage unexpected expenses, it’s recommended to make them a part of the monthly budget. A suggested approach is to analyze past “unexpected expenses”, then estimate their costs and timing, which can provide an estimate of how much should be saved each month.
While basing future expenses on past ones only furnishes savings guidelines, this method can prevent an unexpected expense from turning into a severe financial emergency.
Planning for unexpected expenses by setting aside money from each paycheck can protect individuals from unforeseen financial difficulties.
Understanding what types of unexpected expenses might occur can help in the development of strategies to handle them successfully, reducing the impact of any unpleasant financial surprises.
Yes, all of the statements above are true.
What is not true about unexpected expenses?
Unexpected expenses are entirely out of our control.
Unexpected expenses can be completely avoided.
These unanticipated costs only occur irregularly or infrequently.
You can’t prepare for unexpected expenses.
All of these statements are not true. While the occurrence of these expenses might be unexpected, they’re not entirely unpredictable. Many times, they are the result of poor financial planning or management as they are often unforeseen costs that were not anticipated or included in a budget.
Frequently Asked Questions (FAQ)
It’s advisable to aim for at least 3 to 6 months of living costs for an emergency fund. This acts as a buffer to cover unexpected expenses and offers financial security during unexpected life events like job loss or serious illness.
However, the “right” amount to save varies depending on your personal situation, lifestyle, and financial obligations. Always remember: saving something is better than saving nothing; start small and increase gradually as your income allows.
Financial experts generally advise having an emergency fund equivalent to three to six months of monthly expenses. This guidepost factors in expenses such as food, housing, utilities, transport, healthcare, and other necessities.
However, if you are in a volatile occupation or the sole breadwinner of the family, aiming for a larger fund may be prudent. Whichever your situation, remember it’s not about reaching the benchmark overnight; the key is consistency in saving.
Managing urgent financial liabilities without incurring debt hinges on proactive financial planning.
Building an emergency fund: Start small and deposit to accumulate enough to cover at least three to six months of essential expenses.
Proper budgeting: Maintain a budget, ensuring you live within your means and regularly contribute to savings.
Insurance coverage: Adequate insurance coverage can help circumvent the financial impact of medical emergencies or catastrophic events.
Extra income: Consider a side hustle for additional income to bolster your budget and increase your savings.
Plan Ahead to Avoid Unforeseen Expenses
While unexpected expenses are an inevitable part of life, their financial stress isn’t.
Through effective planning and budgeting, you can cushion their blow, ensuring they don’t throw you into financial turmoil. Around here at Money Bliss, we strive for our readers to have less stress with money.
No matter how well you plan, unexpected costs can still arise from time to time. They can happen quite regularly, which is why it’s crucial to include them in budget planning.
By setting aside a portion of each paycheck in a savings account, you can be better prepared for such costs when they arise.
Remember, every dollar saved is a step towards greater financial stability, helping you to navigate life’s uncertainties with confidence and peace of mind.
Now, make sure you are financially sound.
Source
NOAA.gov. “Costliest U.S. Tropical Cyclones.” https://www.ncei.noaa.gov/access/billions/dcmi.pdf. Accessed December 1, 2023.
Colorado Public Radio. “Most people who lost homes in the Marshall Fire were underinsured, Colorado insurance regulators say.” https://www.cpr.org/2022/05/02/most-people-who-lost-homes-in-the-marshall-fire-were-underinsured-colorado-insurance-regulators-say/. Accessed December 1, 2023.
U.S. Energy Information Association. “U.S. residential electricity bills increased 5% in 2022, after adjusting for inflation.” https://www.eia.gov/todayinenergy/detail.php?id=56660. Accessed December 1, 2023.
BetterPet. “Average emergency vet costs: what to expect.” https://betterpet.com/emergency-vet-costs/. Accessed December 1, 2023.
Mastercard. “Your real-time guide to real-time payments.” https://www.mastercard.com/news/perspectives/2023/real-time-payments-what-is-rtp-and-why-do-we-need-instant-payments/. Accessed December 1, 2023.
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Saving up for a down payment is a common challenge for many prospective homebuyers. FHA loans allow qualifying borrowers to put as little as 3.5% down on a property, helping lower the barriers to homeownership for many.
With an FHA loan, borrowers may also be eligible for down payment assistance. But there are other out-of-pocket expenses to keep in mind when considering an FHA loan. Let’s take a closer look at FHA loan down payment requirements and how much money you’ll need to get to the closing table.
What Is an FHA Loan?
An FHA loan is a type of mortgage that’s issued by a lender, such as a bank or credit union, but insured by the Federal Housing Administration (FHA). The purpose of the FHA mortgage program is to make homeownership more affordable for low- to moderate-income buyers.
Since FHA loans are government-insured, they offer more flexible eligibility requirements for borrowers who might not qualify for a conventional home loan. FHA loans have lower minimum down payment and credit score requirements, making them popular with first-time homebuyers and applicants with limited savings or poor credit. Compared to conventional mortgages, FHA loan interest rates are typically lower, but will vary depending on the lender and on the borrower’s credit score and finances. 💡 Quick Tip: Buying a home shouldn’t be aggravating. SoFi’s online mortgage application is quick and simple, with dedicated Mortgage Loan Officers to guide you through the process.
First-time homebuyers can prequalify for a SoFi mortgage loan, with as little as 3% down.
FHA Loan Income Requirements
There aren’t any minimum or maximum income requirements to qualify for an FHA loan. However, there may be income limits for borrowers receiving down payment assistance through a state or local program.
In any case, lenders will look at an applicant’s ability to manage monthly mortgage payments and ultimately repay the FHA loan. Besides savings and assets, lenders assess an applicant’s debt-to-income (DTI) ratio, which measures the percentage of monthly income that goes toward debt payments. A lower DTI ratio is typically viewed as favorable. Depending on the lender, borrowers can get an FHA loan with a DTI ratio of up to 50%. In comparison, conventional loans typically require a DTI ratio of 43% or less.
Recommended: How Much is a Down Payment?
What Is the Down Payment Required for an FHA Loan?
Down payments are calculated as a percentage of the home purchase price. Historically, lenders looked for buyers to put down one-fifth of a home’s purchase price upfront. But you no longer always need to put down 20% on a house. The minimum down payment percentage for FHA loans depends on a borrower’s credit score.
The average down payment on a house in the U.S. was 13% in 2022. But with an FHA loan, borrowers with a credit score of 580 or more may qualify for a down payment of 3.5% of the home purchase price. Those with credit scores between 500 and 579 will need to put 10% of the home price towards a down payment. For a $400,000 house, this translates to $14,000 for a 3.5% down payment and $40,000 for a 10% down payment. 💡 Quick Tip: Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
What Other Cash Will I Need to Close?
Besides the down payment, the remaining amount you need to close on a house will depend mainly on the home’s purchase price. Taking out an FHA loan requires paying an upfront mortgage insurance premium (MIP) of 1.75% of the loan total. It may be possible to roll this cost into the loan, which would increase the loan principal and monthly payment amount.
Buyers will also be on the hook for FHA loan closing costs, which typically range from 2% to 5% of the home’s purchase price. Borrowers can potentially avoid the upfront expense by rolling closing costs into an FHA loan. By financing closing costs, borrowers will pay a portion of the costs each month, plus interest. Note that financing closing costs can increase a borrower’s DTI ratio and potentially impact their ability to qualify for an FHA loan.
An alternative option to cover closing costs would be to ask for seller concessions. FHA loans allow the seller to contribute up to 6% of the home value for closing costs as a seller concession.
Recommended: What Do You Need to Buy a House?
How to Save for an FHA Loan Down Payment
Understanding how much house you can afford is a useful place to start to determine your housing budget and savings goal. Using an FHA loan mortgage calculator can help crunch the numbers to determine your down payment and monthly payment based on different loan terms. Not sure you will choose an FHA loan? Use a home affordability calculator to determine how much house you can afford.
With a savings goal in mind, calculate how much you can set aside each month after paying for debts and expenses. Consider cutting discretionary spending, such as dining out and travel, to increase monthly savings.
Buyers can also get the money they need for an FHA down payment in the form of a gift from family, friends, employer, charitable organization, or government program. Gifted funds need to be accompanied by a gift letter to show the lender that the money is going toward the down payment and doesn’t need to be repaid.
Is Down Payment Assistance Available for FHA Loans?
Borrowers who can’t afford a down payment on an FHA loan may be eligible for financial assistance. Down payment assistance can come in several forms, including grants and forgivable loans. These programs are available through local, state, and federal government programs, as well as nonprofit organizations.
Most down payment assistance programs are geared towards first-time buyers. They may include additional eligibility requirements, such as income limits and participation in homebuyer education courses. Consult a list of first-time homebuyer programs and loans to see what you might be eligible for. If it has been more than three years since you have owned a home, you may qualify for first-time homebuyer status.
Additional Cost Considerations for FHA Loans
In addition to the upfront costs of a down payment, closing costs, and MIP, there are other expenses to plan for.
The MIP includes an additional annual fee besides the 1.75% that’s required for closing. Annual payments range from 0.15% to 0.75% depending on the loan terms and loan-to-value ratio. The total annual cost is divided by 12 and spread out across the monthly payments in a given year. Note that MIP usually spans the life of the FHA loan unless a borrower refinances.
Depending on the property location, borrowers may also need to pay for flood insurance to get an FHA loan.
Pros and Cons of an FHA Loan
FHA loans are popular for their lower down payment mortgage requirements, but they’re not for everyone. Here are some advantages and drawbacks to consider when comparing home mortgage loan options.
Pros:
• Smaller down payments
• More lenient credit score requirements
• No income limits
• Can finance closing costs
Cons:
• Required to pass an inspection and appraisal
• Must be used for a primary residence.
• Loan limits of $472,030 to $1,089,300 for a single-family home, depending on the cost of living by state.
• Can require an inspection and stricter standards for the condition of the property.
The Takeaway
What is the minimum down payment for an FHA loan? Borrowers with credit scores of 580 or more can put just 3.5% down, while those with scores between 500 to 579 need to put 10% toward a down payment. The combination of lower minimum credit score and low down payment make FHA loans one attractive option for first-time homebuyers.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
What is the lowest down payment for an FHA loan?
The lowest down payment for an FHA loan is 3.5% of the loan amount. Borrowers can explore down payment assistance programs to help cover the cost.
What is the down payment for an FHA loan 2023?
The down payment for an FHA loan in 2023 ranges from 3.5% to 10% depending on the borrower’s credit score.
What will disqualify you from an FHA loan?
Borrowers could be disqualified from an FHA loan based on a high debt-to-income ratio, poor credit, or insufficient funds to pay for the down payment, closing costs, and monthly mortgage payment.
Photo credit: iStock/Edwin Tan
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Pennsylvania, the Keystone State, offers a range of diverse living experiences from bustling urban centers like Philadelphia and Pittsburgh to serene rural boroughs. Amidst this diversity, cost of living is a key factor for many looking to relocate within the state. For renters, some cities in Pennsylvania stand out as particularly economical options. Our analysis identified five cities – Johnstown, Indiana, Pottsville, McKeesport, and Butler – as the most affordable places to live for renters. Each of these cities offers the charm and amenities of Pennsylvania living, while being friendly on the pocket too.
Johnstown, PA
Johnstown, home to close to 20,000 residents, shines as one of the most affordable cities in Pennsylvania. With a median income of $29,171 and a median rent for a two-bedroom apartment at just $685, Johnstown is a great option for renters. Despite the modest cost of living, the city doesn’t lack for attractions. It’s home to the Johnstown Flood National Memorial, the Johnstown Inclined Plane – the world’s steepest – and the Grandview Cemetery. The city’s rich industrial heritage and resilient spirit offer a unique living experience.
Indiana, PA
Indiana, Pennsylvania, offers a compact small-town charm with a population just above 13,000. Notwithstanding the median income of $30,934, the living expenses here are quite low with a two-bedroom rental asking price of $601. Indiana is home to the Jimmy Stewart Museum, dedicated to the legendary actor and native son. Access to education is easily available with the Indiana University of Pennsylvania in town. With many parks and recreational spots like Blue Spruce Park and Yellow Creek State Park nearby, Indiana provides a balanced and affordable living experience.
Pottsville, PA
Pottsville, with a population of over 13,000, boasts a remarkably reasonable median two-bedroom rent of $412. The city, with a median income of $39,154, offers a high quality yet economical lifestyle. Home to the historic Yuengling brewery, the oldest in America, Pottsville is rich in culture and history. Beautiful local parks like Rotary Park and JFK Memorial Pool and recreation areas offer ample opportunities for outdoor activities.
McKeesport, PA
In terms of affordability, McKeesport stands out, especially with a modest median home value of $51,200. Renters will find it good value for money with a median rent of $903 for a two-bedroom home. McKeesport’s population of 19,128 benefit from the city’s great location at the confluence of the Monongahela and Youghiogheny rivers. The city’s Renziehausen Park Rose Garden is a local treasure, and the Great Allegheny Passage trail offers a great opportunity for biking and hiking.
Butler, PA
Despite being the smallest city on the list with a population of 13,008, Butler packs in an impressive punch when it comes to affordability. With a median income of $32,746 and a median rent of $785 for a two-bedroom home, it makes for a great place to live for renters. Butler is known for its historic landmarks like the Butler County Courthouse and is just a short drive from Moraine State Park, offering lots of outdoor activity options.
Methodology
The cheapest cities in each state were ranked based on its median home price and median asking rents for studio, one-, two-, and three-bedroom units. Prior to ranking, inputs were normalized, and weights were applied using a 1.25:1 ratio of asking rents to home prices. Data on home prices are from the U.S. Census 2016-2020 American Community Survey 5-year estimates. Data on asking rents are from Rent. Cities without data for one- or two-bedroom asking rents or a population of less than 10,000 were removed from this ranking. Any other missing values were zeroed and did not impact the final score.
Top 10 builder now offering model home tours at Maggy’s Ridge Estates, selling from the mid $200s
LAFAYETTE, La., Nov. 30, 2023 /PRNewswire/ — Century Communities, Inc.—a top 10 national homebuilder, industry leader in online home sales, and the highest-ranked homebuilder on Newsweek’s list of America’s Most Trustworthy Companies 2023—is excited to announce the debut of Century Complete’s new model home at Maggy’s Ridge Estates in Sulphur, showcasing the community’s single-story Douglas floor plan. Maggy’s Ridge Estates boasts a prime location with convenient proximity to cultural hotspots and business hubs in the Lake Charles area—with quick access to McNeese State University, outdoor recreation and more. The location also comes with a desirable Flood Zone X rating, meaning a lower risk of flooding and thus lower insurance rates compared to higher-risk zones.
Available through Century Complete’s streamlined online homebuying process, the community is now selling an inspired lineup of single-story floor plans on wide homesites from the mid $200s—with each plan offering a versatile open-concept layout with exceptional included features, such as brick exteriors, stainless-steel appliances, granite countertops, and white cabinets. Buyers will also appreciate an inviting covered patio on each plan for a seamless flow between outdoor and indoor living spaces.
Learn more & view available homes at www.CenturyCommunities.com/MaggysRidgeEstates.
“We’re excited for area homebuyers and real estate agents to come tour our beautiful new Douglas model at Maggy’s Ridge Estates,” said Greg Huff, president of Century Complete. “Offering generous homesites, this community provides the opportunity to be the first to live in a quality-built new home at an affordable price, which is why we anticipate these homes to sell quickly.”
Wednesday, December 6: Homebuyer Webinar With Dinner at Maggy’s Ridge Estates
Homebuyers are invited to attend a special event at the community’s model home to enjoy complimentary dinner and watch a webinar livestream with information about home financing options with affiliate lender, Inspire Home Loans®!
MORE ABOUT MAGGY’S RIDGE ESTATES Now selling from the mid $200s
Conveniently situated near I-10 W/US-90 in Calcasieu Parish, Maggy’s Ridge Estates boasts a desirable location with easy access to restaurants, shopping, entertainment, museums and year-round community events. Exuding small-town charm, Sulphur offers a slower pace of life and an abundance of recreational opportunities, including recreation at nearby Lake Charles, the Creole Nature Trail, and more.
Three single-story floor plans
Three-sided brick exteriors
Up to 4 bedrooms, up to 3 bathrooms, 2-bay garages
Covered patios (per floor plan)
1,684 to 2,020 square feet
Model Home Address: 4987 Carlyss Drive Sulphur, LA 70665 337.210.2050
OTHER AREA COMMUNITIES
Maggy’s Ridge | Sulphur Now selling from the low $200s
Adjacent to Maggy’s Ridge Estates
2 single-story floor plans
4 bedrooms, 2 bathrooms, 2-bay garages
1,684 to 1,773 square feet
Learn more & view available homes at www.CenturyCommunities.com/MaggysRidge.
Mills Terrace | Scott Now selling from the low $200s
2 single-story floor plans
4 bedrooms, 2 bathrooms, 2-bay garages
1,684 to 1,773 square feet
Learn more and view available homes at www.CenturyCommunities.com/MillsTerrace.
Timberstone Estates | New Iberia Now selling from the low $200s
3 single-story floor plans
Up 4 bedrooms, 2 bathrooms, 2-bay garages
1,416 to 1773 square feet
Learn more and view available homes at www.CenturyCommunities.com/TimberstoneEstates.
Copper Oaks | Baton Rouge Now selling from the mid $200s
2 single-story plans, 2 two-story plans
4 bedrooms, up to 3 bathrooms, 2-bay garages
1,684 to 2,014 square feet
Learn more and view available homes at www.CenturyCommunities.com/CopperOaks.
VISIT OUR LOUISIANA SALES STUDIO IN BROUSSARD! While our industry-leading online homebuying process allows you to buy on your terms—24 hours a day, 7 days a week, 365 days a year—we also offer in-person assistance from local experts at our sales studio.
481 Albertson Parkway, Suite 2 Broussard, LA 70518 337.210.2050
DISCOVER THE FREEDOM OF ONLINE HOMEBUYING: Century Complete is proud to feature its industry-first online homebuying experience on all available homes in Louisiana.
How it works:
Shop homes at CenturyCommunities.com
Click “Buy Now” on any available home
Fill out a quick Buy Online form
Electronically submit an initial earnest money deposit
Electronically sign a purchase contract via DocuSign®
Learn more about the Buy Online experience at www.CenturyCommunities.com/online-homebuying.
About Century Communities Century Communities, Inc. (NYSE: CCS) is one of the nation’s largest homebuilders, an industry leader in online home sales, and the highest-ranked homebuilder on Newsweek’s list of America’s Most Trustworthy Companies 2023. Through its Century Communities and Century Complete brands, Century’s mission is to build attractive, high-quality homes at affordable prices to provide its valued customers with A HOME FOR EVERY DREAM®. Century is engaged in all aspects of homebuilding — including the acquisition, entitlement and development of land, along with the construction, innovative marketing and sale of quality homes designed to appeal to a wide range of homebuyers. The Company operates in 18 states and over 45 markets across the U.S., and also offers title, insurance and lending services in select markets through its Parkway Title, IHL Home Insurance Agency, and Inspire Home Loans subsidiaries. To learn more about Century Communities, please visit www.centurycommunities.com.
View original content to download multimedia:https://www.prnewswire.com/news-releases/online-homebuying-leader-century-complete-unveils-new-model-home-near-lake-charles-la-302002687.html
Tucked alongside a large dorm building on the fringes of Woodbury University’s campus in Burbank is a small but very eye-catching house. The 425-square-foot home is contained by a gently curving concrete form equipped with a generous porch and a dramatic sloping roof. Slender, carefully staggered floor-to-ceiling windows gently illuminate the interior.
It’s a nice piece of architecture. What makes it truly remarkable is who built it — and how.
The Solar Futures House, as it is formally known, was designed by Woodbury architecture students and constructed out of concrete using the latest 3-D printing technology. It is the first such permitted structure in the city of Los Angeles, according to Woodbury architecture dean Heather Flood. And it was built by Emergent, a 3-D printing construction firm based in Redding. (A quick geography explainer: While Woodbury has a Burbank address, a piece of the campus, where the house was built, is located within Los Angeles city limits — hence the L.A. permits.)
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Most notable is how quickly this project came to fruition. “It was 15 months from design, going through the permitting process with the city, working with the printing company and dealing with 14 atmospheric storms,” says Kishani De Silva, chair of the construction management program at Woodbury, who served as faculty lead on the project. “It came to life on the 12th of May. … The next day the students literally graduated.”
From design to near completion in 15 months? In bureaucratic Los Angeles, that counts as damn near miraculous.
Certainly, it helped that students were collaborating with municipal experts from the Mayor’s Office of Energy and Sustainability, the Bureau of Engineering and a nonprofit clean tech incubator at the Los Angeles Department of Water and Power — organizations that could help navigate the red tape. But at a time when our region is gripped by a housing and homelessness crisis, it is nonetheless a model worth examining.
To be clear, the house is not 100% complete — though it’s awfully close. A couple of the interior areas are still in need of drywall, and some exterior features and the landscaping remain unfinished. Moreover, the building will require a certificate of occupancy from L.A.’s Department of Building and Safety.
But it is an impressive piece of design, achieving a lot in a small space.
The layers of 3-D-printed concrete give the walls a geologic look, and the curving shape and high ceilings prevent this intimately scaled studio from feeling like a shoebox. In addition, the covered porch and the living room are connected by a sliding door; throw it open and the space feels bigger and airier.
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And, true to its name, this is a structure that prioritizes environmental concerns.
The Solar Futures House began as an entry in the Solar Decathlon, a national collegiate competition organized by the U.S. Department of Energy that encourages budding designers to create high-performance structures powered by renewable energy.
In the spring of 2022, a class of Woodbury students submitted a design proposal and was selected as one of 14 finalists, receiving a $50,000 grant for construction. By the fall of that year, the team was breaking ground.
The structure they proceeded to build was all about efficiency. Shower water is recirculated for toilet flushing. The home’s bending form and sloped roof are designed to respond to the angle of the sun over the course of the year, thereby maximizing the generation of solar power. Currently, the structure features one solar array on the roof, which makes the building net zero (meaning no additional electricity is needed to power the home). Add another and it becomes net-positive, supplying energy to the grid.
The angled roof is made out of a reflective, resin-coated metal and sits atop 9 inches of mineral wool insulation, which helps preserve the building’s interior temperatures and buffer external noise. (Woodbury’s campus sits next to the 5 freeway, but between the double-layer concrete walls, the triple-glazed windows and the insulation, the house feels peaceful.) Mineral wool insulation also functions as a fire barrier — addressing another environmental concern in California.
To mitigate the use of concrete, which is carbon-intensive, the team developed a formula that contained a higher percentage of fly ash, making it more sustainable. The precise nature of 3-D printing also means that no concrete goes to waste.
This new construction method allowed for the speedy erection of the building’s double-layer walls: De Silva estimates that printing took about three days. It also let students play with form. In a traditional stick-build structure, 90-degree angles are the most efficient way for walls to meet. But 3-D printing allows for more flexible shapes; hence the curving walls, which give the house a more organic feel. Take the bathroom: Designed to be compliant with the Americans With Disabilities Act, it is no afterthought — it’s tucked into an attractive rounded room that also includes laundry facilities.
Naturally, the DOE’s grant didn’t cover all of the costs.
Flood estimates that the budget for the house currently stands at about $250,000, including in-kind support and donated services from area firms. L.A.-based Nous Engineering pitched in on the structural work, while Breen Design Group in Torrance helped with the mechanical systems; Mitsubishi Electric donated an HVAC system and Ikea supplied furnishings.
The Solar Futures House is a significant achievement — especially considering that Woodbury is a small school (with fewer than 1,000 undergraduates) and its accredited architecture program is relatively new, established in 1994. The university serves students primarily from Southern California, many of them Latino, making it a designated Hispanic-Serving Institution. (The school plays a critical role in diversifying the field, since architecture remains overwhelmingly white.)
Two dozen students worked on the Solar Futures House over a period of two academic years, rotating in and out of the project as part of their coursework. But a number of them were able to see it through from beginning to end, including Karin Najarian and Jade Royer; Sergio Santos was able to work on the home throughout the entire final year.
The Solar Futures House soon will be habitable; university administrators are debating how it might be used. Possibilities include a guest house for visiting speakers or a residence for a housing-insecure student.
Whatever its ultimate purpose, the home will continue to function as a teaching tool. “It’s a prototype for a method of design and construction and the actual shape and form could be varied,” says Flood. “It could conform to many different site conditions. You can nest multiple units together in a way that would take advantage of structural efficiencies.” (Construction companies already have begun to create two-story structures using 3-D printing technology.)
Woodbury students will be able to take this initial concept and run with it, refining and adapting it to suit the needs of other constituencies, such as the elderly.
The house may be almost complete, but the ideas that informed it are just beginning to take off.
To learn more about the Solar Futures House, and keep up on any upcoming public events, check the project’s website at solar.woodbury.edu.
Last week, I asserted that housing inventory growth had finished for the year. Turns out I was wrong!
This week, the available inventory of unsold single-family homes crept up minimally. It looks like this is evidence that housing markets are returning to normal rather than a case of sellers panicking, but it’s worth keeping an eye on.
After all, more sellers means more sales in 2024.
Watch the video above to get the latest housing market update from Altos Research.
Short on time as you prepare for Thanksgiving? Check out some key data takeaways below for the week ending Nov. 20.
Housing inventory inches up
There were 570,000 single-family homes on the market, or 0.5% more homes for sale than last week and 36% lower housing inventory than in 2019.
Keep in mind that those snowbird states in the South aren’t as affected by the seasonal slowdown in sales thanks to their warmer weather. For instance, we are seeing inventory growth this month in Florida cities such as Sarasota, Miami and Tampa.
Texas housing inventory is inching up this month notably higher than last year. In fact, Austin and San Antonio in Texas, as well as Memphis, have more housing inventory now than in 2019.
More new listings could help boost sales
We saw 58,000 new listings added to the housing inventory this week, with 9,000 of those already under contract. That’s more new sellers this year than the same week a year ago, signaling a tiny improvement in our supply-starved housing market.
This means we should see slightly better home sales volumes in November compared to a year ago. However, we’re watching to make sure there’s no flood of sellers or a shrinking of immediate sales that would indicate a weakening market.
Pending-home sales grow
Pending-home sales are finally getting close to eclipsing last year. We started 2023 with 30% fewer homes under contract than in 2022, however, that gap has narrowed to just 3% now.
What does that mean? It’s a positive sign we’re near the bottom of the housing recession and maybe we can claw our way back to a more stable housing market in 2024.
Home prices hold their own amid higher housing inventory
Notably, there are no signs of falling home prices with this fall’s sellers. The median price of single-family homes in the U.S. is at $428,000, which is 2% higher than this week a year ago.
It’s also worth noting that the home prices of new listings (a leading indicator) isn’t strained by downward price pressure.
Mike Simonsen is the president and founder of Altos Research.
Download the free Altos eBook: “How to Use Market Data to Build Your Real Estate Business”
NEW ORLEANS (WVUE) – High property insurance costs are doing more than straining some people’s budgets. The ongoing insurance crisis in Louisiana is forcing some people into foreclosure.
Andreanecia Morris is the executive director of Housing NOLA.
“We’re seeing people who are having their principal and interest which is the largest part of your loan be eclipsed by the taxes and insurance portion, be double what that principle and interest payments to the banks is. That’s a dramatic increase in your monthly payment and it’s leading to foreclosures,” said Morris.
Insurance Commissioner Jim Donelon recently told FOX 8 that many people are losing their homes due to higher insurance costs.
“They are losing their houses every month because we had to raise the rates for Citizens, 120,000 policies at the time, this past January 1, so that 10,000 renew each month throughout the year and are hit with that 63% rate increase,” said Donelon.
Morris says, “We’re seeing that as well. We’re seeing people who are, foreclosure takes a minute, so we’re seeing people who are behind. We’re seeing particularly for people who were able to buy in the last 18 years through the myriad of programs that we stood up to help first-time homeowners build wealth here in New Orleans.”
Guy Williams is president and CEO of Gulf Coast Bank & Trust.
“Fortunately, none of our customers have lost their homes because of insurance but what we are seeing is some of our citizens, particularly the seniors that don’t have mortgages are choosing not insure and that’s unfortunate because if there’s a storm or hurricane they’ll have no ability to rebuild unless they have substantial assets,” said Williams.
He added that some real estate deals are not closing because of the insurance cost.
“Definitely, it makes the real estate business tougher we’re seeing fewer sales this year than last and I think people are having to adjust to higher insurance but also higher interest rates. And so it has been a challenge,” said Williams.
Typically, insurance costs get factored into monthly mortgage payments.
“When the buyer finds out what their premium is, particularly some of the new flood numbers they’re saying well I just can’t afford it and either the deal has to be renegotiated to a lower price or some cases the transactions just doesn’t occur at all.”
According to ConsumerFinance.Gov which has data through March 2023, Louisiana had a 2.5% mortgage delinquency rate compared to the national average of 1.3%.
And that’s not all. ConstructionCoverage.Com shows New Orleans-Metairie at the top of the list in terms of large metro areas and mortgage delinquencies.
Morris says it is not a surprise.
“Unfortunately, it’s not.”
She says communities could have done more years ago to help give people more of financial cushion.
“And so, when the recovery dollars come in, when the insurance proceeds come in, when the bank financing comes in, it’s all of our responsibility. I’m not letting the bankers off the hook, I’m not letting the insurance companies off the hook, I’m not letting our policymakers off the hook, I’m saying we need to design programs and we need to be holding that line that we are creating success stories not simply saying you’re going to pull yourself up by your bootstraps,” said Morris.
Meanwhile, Williams says people who want to become homeowners should not give up.
“What we encourage people to do is what we call, “marry the home and date the mortgage. If you find a home you love, go ahead and buy it and then when rates drop which we think they will in a year or so refinance to a lower mortgage,” he said.
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