The volume of mortgage applications fell during the last week of June as compared to the prior week which had contained an adjustment to account for the Juneteenth holiday. The Mortgage Bankers Association (MBA) reported a decline of 4.4 percent in its seasonally adjusted Market Composite Index. The change ended a three-week streak of volume gains. On an unadjusted basis, however, that index did move 6.0 percent higher.
The Refinance Index decreased 4 percent from the previous week and was 30 percent lower than the same week one year ago. The refinance share of applications ticked up to 27.4 percent from 27.2 percent.
The seasonally adjusted Purchase Index declined 5.0 percent but was 6.0 percent higher before adjustment. Applications were down 22 percent from the same week in 2022.
“Mortgage applications fell to their lowest level in a month last week as rates for most loan types increased. As mortgage-Treasury spreads remained wide, the 30-year fixed rate increased to 6.85 percent, the highest rate since the end of May,” according to Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications decreased for the first time in a month, as homebuyers remained sensitive to rate changes. Rates are still over a percentage point higher than a year ago, and housing affordability is still a challenge in many parts of the country. However, the average loan size for a purchase application declined to $423,500 – its lowest level since January 2023. This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers searched for more affordable options.”
The recent low of $423,500 cited by Kan for purchase loans was about $4,500 below the average a week earlier. Overall loan sizes declined from $384,200 to $378,800. The last time loan sizes rose was in mid-May.
Other Highlights from MBA/s Weekly Mortgage Applications Survey
The FHA share of total applications increased to 13.0 percent from 12.9 percent and the Veterans Administration’s share decreased to 11.7 percent from 12.2 percent. USDA applications were unchanged from the prior week at a 0.4 percent share.
The 6.85 percent average contract interest rate for conforming 30-year fixed-rate mortgages (FRM) represented a 10-basis point increase from the prior week. Points rose to 0.65 from 0.64.
The rate for jumbo 30-year FRM increased to 6.95 percent from 6.91 percent,with points slipping to 0.64 from 0.69.
FHA-backed 30-year FRM had a rate of 6.68 percent with 0.98 point. The prior week the rate was 6.63 percent with 1.08 points.
Fifteen-year FRM rates averaged 6.30 percent, up 7 basis points. Points increased to 0.91 from 0.69.
The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) dropped to 6.00 percent from 6.28 percent,with points increasing to 1.23 from 1.02.
The ARM share of activity increased to 6.2 percent from 6.1 percent.
We had a few times in the previous cycle where the 10-year yield was below 1.60% and above 3%. Regarding 4% plus mortgage rates, I can make a case for higher yields, but this would require the world economies functioning all together in a world with no pandemic. For this scenario, Japan and Germany yields need to rise, which would push our 10-year yield toward 2.42% and get mortgage rates over 4%. Current conditions don’t support this.
The backstory
The lifeblood of my economic work depends greatly on the ebbs and flows of the 10-year yield, even more than mortgage rate targeting, which is unusual for a housing analyst.
When I first dipped into 10-year yield and mortgage rate forecasting in 2015, during the previous expansion, I said the 10-year yield will remain in a channel between 1.60%-3%. I’ve stuck to that channel forecast every year since — and for the most part that 10-year yield channel stuck. That range dictated that mortgage rates would roughly stay between 3.5%-4.75%.
When COVID-19 was about to hit our economy, I forecasted that the 10-year yield recessionary yields should be in a range between -0.21%-0.62%. We got to as low as 0.32% on that Monday morning in March when the crisis was hitting the markets the hardest. About a month later, I published my AB (America is Back) recovery model, which said that the 10-year yield should get back toward 1%. We got there in December of 2020 so I was able to retire my America is Back recovery model.
I said that when the economy was beginning the new expansion, the 10-year yield would create a range between 1.33%-1.60%. This couldn’t happen in 2020 but should happen in 2021. Even with the hot economic growth, the hottest inflation data in decades, and the Fed rate hike discussion picking up, this range of 1.33%-1.60% has held up nicely for most of 2021, meaning mortgage rates were going to be low in 2021.
My forecast for the 10-year yield range in 2021 was 0.62%-1.94% which translates to a bottom-end range in mortgage rates of 2.375%-2.5%, and an upper-end of 3.375%-3.625%. Single mortgage rate target forecasts have not fared well over the decades because these forecasters did not respect the downtrend in bond yields since 1981.
The X factor
Can there be a bond market sell out short term, sending yields above 1.94%, like what we saw early in the COVID-19 crisis? Yes, but if the markets do overreact for any reason, typically bond yields would fall back. Why do I not believe bond yields will push higher aggressively? The economic rate of growth peaked in 2021. The economy was on fire this year, and inflation data was super-hot. Even so, the highest the 10-year yield got was 1.75%. The economic disaster relief that boosted the recovery in 2020 and 2021 has been drawn down.
Government spending plans have also been watered down and new legislation might not even pass at all. Economic growth peaked in 2021 and some of the hotter inflation data has the potential to fall next year. The Federal Reserve wants to hike rates to cool the economy. Typically what happens before the first Fed rate hike is that the U.S. dollar has its biggest percent move higher ,which tends to hurt commodity prices and world growth. This is something to watch for next year as it could slow down world growth.
The economy won’t be as hot in 2022 as it was in 2021, but it will remain in expansionary mode. This type of backdrop will make it challenging for rates to rise in a big way and stay higher. The key with all my 10-year yield channel work is how long the 10-year stays in that channel during the calendar year. I have always believed this type of forecast is more useful than targeting a mortgage rate.
Existing-home sales
The forecast
For 2022, I am forecasting the same sales trend range as 2021 of about 5.74 million to 6.16 million. If monthly sales prints are above 6.16 million for existing homes, then I would consider the market more robust than expected. If sales trend toward 5.3 million then we will be back to 2019 levels. This would still be healthy sales considering the post-1996 trend, but it will mean housing demand has gotten softer.
This has happened before when higher rates have impacted demand. This is why since the summer of 2020 I have written about how if the 10-year yield can get above 1.94%, then things should cool down. However, as you can see it’s been hard to bond yields over that level and thus mortgage rates above 3.75%.
The backstory
If the last two reports of the year on existing home sales are above 6.2 million, I will admit that sales have slightly outperformed what I predicted for 2021. Early in 2021, I wrote that home sales would moderate after the peaks caused by the COVID-19 shutdown make-up demand and that readers should not overreact to this slowing. I wrote that sales would range between 5.84 million and 6.2 million, and that we could anticipate a few prints under 5.84 million — but sales would consistently be above the closing level of 2020 of 5.64 million. We got one print below 5.84 million and a few recent prints over 6.2 million, with two more reports. Mortgage demand was solid all year long and has picked up in the last 15 weeks.
One of my longer-term forecasts in the previous expansion was that the MBA Index would not reach 300 until 2020-2024. We got there in the early part of 2020, then the Index got hit by the COVID-19 delays in home buying to only have a V-shaped recovery that led to the make-up demand surge, moderation down and back to 300.
As you can see, it’s been like Mr. Toad’s wild ride here. We will still have some COVID-19 year-over-year comps to deal with up until mid February and then we can get back to normal. However, one thing is for sure: demand has been solid and stable in 2020 and 2021. Also, the market we have today doesn’t look like the credit boom we saw from 2002-2005.
I didn’t believe total home sales could get to 6.2 million in the years 2008-2019, this is new and existing home sales combined. We simply didn’t have the type of demographics in the previous expansion. We are in different times.
New home sales and housing starts
The forecast
My long-term call from the previous expansion has been that we won’t start a year at 1.5 million total housing starts until the years 2020-2024 and we have finally gotten here much like the 300 level in the MBA index. My rule of thumb has always been to follow the monthly supply data for new homes, and as long as monthly supply is below 6.5 months on a three-month average, they will build.
The backstory
Housing starts, permits and builders confidence are ending the year on a good note. Even though new home sales aren’t booming this year, it’s good enough to keep the builders building more homes even with all the drama of labor shortages, material cost and delays in finishing homes.
As you can see below, the uptrend has been intact even with the slowdown in 2018 and the brief pause from COVID-19.
The new home sales sector gets impacted by rates much more than the existing home sales marketplace. The last time this sector saw some stress from mortgage rates was in 2018 when rates were at 5%. Today’s 3% mortgage rates are good enough to keep things going. We should see slow growth in new home sales and housing starts as long as the monthly supply of new homes is below 6.5 months on a 3-month average. This sector has legs to walk forward slowly. I have never believed in the housing construction boom premise as mature economies don’t have construction booms with slowing population growth. More on that here.
The X factor
The one concern I have for this sector in 2022 is if the builders keep pushing the limits of home price growth to make their margins look better. When rates are low, they have the pricing power to do this. This is why the sector has done so well in 2021. If I am wrong about mortgage rates staying low in 2022, and rates go above 3.75% with duration, then demand for new homes should get hit. The longer-term concern for this sector is price growth because if demand slows down, this means a slowdown in construction and the builders really maximized their pricing power in 2020 and 2021.
Home prices
The forecast
I am looking for total home-price growth to be between 5.2% and 6.7% for 2022. This would be a meaningful cool down in price growth but would still be a third year straight of too much price growth for my taste.
The backstory
My biggest fear for the housing market during the years 2020 to 2024 was that real home-price growth can be unhealthy. When you have the best housing demographic patch ever recorded in history occurring at the same time as the lowest mortgage rates ever, with housing tenure doubling as it has in the last 12 years, it’s the perfect storm for unhealthy price growth.
Housing inventory has been falling since 2014 and mortgage purchase applications have been rising since then. As you can see below, 2021 wasn’t looking good for me regarding my fear for home prices rising too much.
The X factor
When I talk about real home-price growth being too hot, I mean that nominal home price growth is above 4.6% each year during the five-year period of 2020 to 2024, for a cumulative 23% growth. This would not be a positive for the housing market. If we end 2021 with 13% home price growth, (and it looks like we will do that or higher), then we have already achieved 23% of the price growth that I am comfortable with in just two years.
While I do believe home-price growth is cooling from the extreme high rate of growth we had earlier in the year, I would very much like to see prices get back in line with my model for a healthy market. In order for this to happen, we would need to have no increase in home prices for the next three years. Because inventory levels are falling again, and we are at risk of starting the 2022 spring season at fresh new all-time lows, this outcome is very unlikely.
Early in 2021, I had raised concerns that prices overheating should be the main concern, not forbearance crashing the market. When demand is stable, it’s extremely rare for inventory to skyrocket and American homeowners have never looked better on paper. In fact, a few months ago I talked about inventory falling again should be the concern going out.
Housing demand
The forecast
Everyone is talking about rates going higher and no one, it seems, is talking about the possibility that mortgage rates could go under 3% in 2022, except me. This is front and center in my mind. I want to see a B&B housing market: boring and balanced. In a B&B market, buyers have choices, sales move at a reasonable pace without bidding wars, and the whole home-buying experience is less stressful and more sane. I would like to see inventory get toward 1.52 – 1.93 million, (which is still historically low). However, this will be a more stable housing market.
The backstory
Millions of people buy homes each year. The only thing that cooled demand for housing in the previous expansion was mortgage rates going over 4% with duration. The increase in rates didn’t crash the market or even facilitated negative year-over-year home price declines; but it did increase the number of days homes stayed on the market.
Currently the biggest demographic patch ever recorded in U.S. history are ages 28-34, the first-time homebuyer median age is 33. When you add move-up, move-down, cash and investor demand together, demand will be stable and hard to break under the post-1996 trend of 4 million plus total sales every year in the years 2020-2024.
The X factor
Frankly, I’m getting tired of calling this market the unhealthiest since 2010. This is not due to a massive credit boom or exotic loan products contaminating the market with excess risk — it’s the lack of choice for buyers. If mortgage rates go under 3%, which I believe they can, it just keeps the low inventory story going on. The Federal Reserves wants to cool down the economy, the government is no longer providing disaster relief anymore and the world economies should get hit if the U.S. dollar gets too strong. So, my concern is about rates falling in year three of my 2020-2024 period. This is also a first-world problem to have and we aren’t dealing with the housing market of 2005-2008 when sales were declining and the U.S. consumer was already filing for bankruptcy and having foreclosures before the great recession started in 2008. This is to give you some perspectives here with my thinking.
The economy
The forecast
I expect the rate of change to slow in 2022 but the economy will still be expansionary. Retail sales have been off the charts, and this data line, which I expected to moderate, still hasn’t. The rate of growth will cool. Replicating the growth we saw in 2021 will be nearly impossible. As the excess savings have been drawn down and the additional checks that people got are no longer coming, this data line will find a more suitable and sustainable trend in 2022. Still I am shocked that moderation hasn’t happened already and I was the year 2020-2024 household formation spending guy, too.
The backstory
The U.S. economy has been on fire this year. Even with the excess savings, good demographics, and low rates, not even I thought we would see economic growth like we did in 2021. However, like all things in life, despite the peaks and valleys, the overall trend will prevail.
The X factor
I recently raised one of my six recession red flags after the most recent jobs report as the unemployment rate got to a key level for myself. These red flags are more of a progress checklist in the economic expansion, and when all six of my flags are raised, I go into recession watch. The economy is in a more mature phase of expansion since the recovery was so fast. Like everything with me, it’s a process to show you the path of this expansion to the next recession.
For housing, a strong labor market means more people are getting off forbearance, which is already under 1 million, much smaller than the nearly 5 million we had early in the crisis. I want to wish a Merry Christmas to all my forbearance crash bros who promised a housing crash in 2020 and 2021. You guys are the best trolling grifters ever!
More jobs and more robust wage growth mean the need for shelter will grow. The housing market is already dealing with too much rent inflation, but as wage growth picks up on the lower end, this means landlords will charge more rent. Again, this the problem you want to have, a tighter labor market means wage growth will pick up and we have 11 million job openings currently.
So, look for the rent inflation story to be part of the 2022 storyline, as well as the rate of growth of home prices cooling down.
There is nothing like a fifth wave of COVID-19 and a new highly transmissible variant to crank up the personal stress meter. While the continuing COVID crisis can cause havoc on some short-term data lines for the economy, we will, as we have done, get through this and move forward. Our reality is that, as a nation, we have learned to consume goods and services with an active virus infecting and killing us every day.
The St. Louis Financial Stress Index, which was a key data line to track for the America Is Back recovery model, has still been in a calm zone for the entire year, currently at -0.8564. When we break over zero — which is considered normal stress — then we have some market drama. However, that wasn’t the storyline in 2021 and we didn’t have a single day where the S&P 500 was in correction mode. It’s not normal to not have a stock correction, so a stock market correction in 2022 is in the works and this can lead more money into bonds and drive rates lower.
For more discussion on this index and the America is Back recovery model, this podcast goes over everything that has happened in 2020-2021.
Conclusion
What a ride it has been for all of us since April 7, 2020 when I wrote the America Is Back economic recovery model for HousingWire. We end 2021 with one of the greatest economic recovery stories ever in the history of the United States of America, and a terrible, dark, two-year period of failure for the extreme housing bears. Now we are well into a recovery and looking forward to a new year with its new challenges.
The job of the analyst is to forecast the positive or negative impacts that a whole slew of variables have on the economy based on carefully formulated economic models. The variables, such as demographics, the unemployment rate, what the Federal Reserve is doing, commodity prices and so many others, are constantly in flux and feed off of and influence one another. Additionally, new economic variables pop up all the time. My job, with every podcast and article, is to show you how the changes in these variables light the path to where the economy and the housing market is heading.
Take a deep breath — in through the nose and out through the mouth. The last two years have been crazy, but I am glad you are here to read this. This is our country, our world and our universe, and everyone is part of team Life on Earth. Merry Christmas, Happy Holidays and have a wonderful Happy New Year. We will get through 2022 one data line at a time.
“We have always held to the hope, the belief, the conviction that there is a better life, a better world, beyond the horizon.” Franklin D. Roosevelt
Martin Lewis has issued new advice on whether or not you should fix your mortgage after rates saw an increase. New figures this week showed a two-year fixed-rate mortgage deal is now £35 more expensive than it was a few weeks ago.
It follows a 0.3% increase in interest charges and predictions that the Bank of England could raise rates to 5% or higher despite previous forecasts that it would not rise above its current rate of 4.5%. The changes come as data shows inflation – which was 8.7% in the 12 months to April 2023 – is not falling by as much as expected.
A number of lenders have pulled mortgage deals off the market in recent weeks as well as making changes to their current deals, putting further financial pressure on cash-strapped households. To get all the latest money-saving news straight to your inbox twice a week sign up here.
Financial journalist Martin Lewis has now given his opinion on what customers whose mortgage deals are ending soon should do with many uncertain about whether to fix their rates or not.
Speaking on his BBC Martin Lewis Podcast the money guru explained the current situation, saying he was getting queries from people whose mortgage deals were coming to an end and were unsure of what to do next. He said this was a “tricky scenario” as the Bank of England base rate – against which tracker mortgage rates are set – was initially expected to peak at 4.5%, the level they are currently at.
But Mr Lewis said the bank now expects that to peak at 5% or 5.5% due to general inflation not falling by as much as expected. He said the rise in some fixed rates had come based on The City of London financial district’s long-term predictions for interest rates.
“The reason the fixed rate has gone up since the inflation period is because The City’s view is interest rates in the UK are going to rise further,” he said. “If I look at the cheapest fixes for a 75% loan-to-value mortgage right now, and I contrast where we are now to where we were three and a half weeks ago, the cheapest two-year fix that most people get with various criteria was 4.27% and is now 4.54%, so it’s gone up just under 0.3%.
“The cheapest five-year fix was 4.06% and is now 4.29%, so fix year fixes are now cheaper than two year fixes. The cheapest ten-year fix was 4.15% and has gone up to 4.39%, a rise of about 0.24%.”
Mr Lewis explained that this meant the period which the financial sector believed interest rates rises were most likely was in the next two years, which was the reason two-year fixes were more expensive than their alternatives.
“This says that they think the much longer-term view of interest rates is still relatively stable. The issue of interest rates going up by more than they thought is more about the short term, more than the longer term. It still affects the longer-term, but not as much as it affects the short term.”
Mr Lewis later heard from a caller asking for advice on whether she should move to a new rate when her current mortgage deal ends soon. He responded that this would come down to the financial situation of each customer and the length of the mortgage they wanted.
“The question is how much could you afford to miss the boat? How close are you on the new rates to not being able to pay your mortgage? The first question is ‘can I afford the gamble?’ Lots of people listening won’t be able to and will have to look to fix. If things then got better, they would feel very frustrated.”
But he urged customers who did opt for a fix not to “look back in hindsight. If you make the decision to fix, remember you made it because it gave you certainty, not because you thought it was going to be cheaper.” He added that five- and ten- year fixes looked “relatively” cheap compared to two-year fixes right now, but that it would depend on how long the customer wanted.
Mr Lewis said he would not put off buying a property if would-be buyers found one suitable to their needs given the current uncertainty. He said: “There are many people who say to me ‘when interest rates go back down’ – that is wrong. It is ‘if’ interest go back down. A 4% mortgage, historically, is a very cheap mortgage. We’ve just lived in this 17-year anomaly of hyper-low interest rates. The idea that things will go back is a very difficult concept.
“My view tends to be the more you want certainty, the more you want to know that you can afford to pay the mortgage, the more you should hedge towards a fix and the more you should hedge towards fixing for longer.
“Right now, the cheapest ten-year fixes are cheaper than the cheapest two-year fixes. So if you’re buying a property you know you’re going to be in for ten years, you might want to look at getting a ten year fix.
“Certainty is really difficult to come by. The one bit of certainty at the moment is that it will be uncertain. You have to hope for the best, plan for the worst and make a decision not assuming things are going to move in your favour or against you.”
Halifax have reported that UK house prices have dropped 1% compared to a year ago – the first drop like this since 2012. Mr Lewis said this drop had not particularly benefited first-time buyers, while mortgage rates had “gone up phenomenally.
“You combine the two and we’re sort of in the worst of both worlds at the moment.”
What are the best options if you are looking for a mortgage?
With interest rates predicted to rise again and cost of fixed-rate deals on the up, here’s what you need to know
UK homeowners face huge rise in payments when fixed-rate mortgages expire
As if things were not tough enough already, those looking for a new mortgage deal are now being squeezed on all sides.
Some experts are predicting the Bank of England will raise interest rates five more times, on top of the 12 since December 2021 that have taken the central bank’s key base rate to 4.5% – the highest since 2008.
At the same time, the cost of new fixed-rate mortgages – popular with those keen to protect themselves from rising interest rates – is rising. This week, the former Bank of England governor Mark Carney predicted interest rates would remain high “for the foreseeable future”.
Here, we consider some of the options for those seeking a mortgage.
So what’s the latest on interest rates and mortgage costs?
UK banks and building societies have been pushing up the cost of their fixed-rate mortgage deals after data published last month revealed higher than expected annual inflation of 8.7%, leading markets to bet that the Bank of England would raise interest rates above 5% by the end of the year.
However, the money markets are now predicting interest rates could be near 5.75% by the end of December, and Laith Khalaf at the investment platform AJ Bell said “a few hawkish comments from the Bank of England, or some more ugly inflation data, could easily tip those expectations up to 6%”.
With the base rate currently at 4.5%, Khalaf said the markets were now firmly pricing in an interest rate rise next week, and then four further hikes. That is bad news for the roughly 2.2 million people on a variable-rate mortgage. About half of those are either on a base-rate tracker or discounted-rate deal. The other half pay their lender’s standard variable rate (SVR).
Meanwhile, the average rate on a new two-year fixed-rate deal was 5.98% on Friday, according to Moneyfacts. The typical rate on a new five-year fix is 5.62%.
The typical new two-year fixed rate has been on a rollercoaster ride: in May last year it was just over 3%, and then 4.74% on 23 September, the day of the mini-budget, but in the weeks that followed it soared above 6% before falling. But last month’s inflation data has propelled the average rate up again.
Based on a £200,000 mortgage, someone taking out a typical two-year fix right now will pay close to £4,000 a year more than someone who signed up for an average two-year fix in May last year.
My fixed-rate mortgage is due to end soon and I’ll need to remortgage – what do I do?
Official data indicates about 1.3 million people have a fixed-rate mortgage deal that will expire between the start of next month and the end of June 2024.
If your deal is not ending for another year or so, your options are more limited, but for many others there are things you can do now.
Remortgage offers are typically valid for up to six months, so if your deal is ending in, say, five months, you can reserve a deal now and wait to see how things pan out. If the cost of new deals has come down, you are not committed to that mortgage offer. But if they have risen, you have at least locked in at a lower rate, even though it may not feel like a great result.
If your deal is ending shortly, perhaps in the next few weeks, these are tough times. You are probably looking at a big hike in payments. Deals are coming and going at breakneck speed, and the advice you may get today could be different next week.
Nicholas Mendes, a mortgage technical manager at the broker John Charcol, said: “For people looking for stability, fixed rates are still the best option.”
What other advice is there?
Talk to your broker or lender well ahead of time to see what advice they can offer. Some people will be able to extend the length of their mortgage term, which will reduce the monthly payments. Doing this means it will take them longer to pay off the loan, so they will pay more interest. However, some will see this as a price worth paying.
Meanwhile, in some cases the lender may agree to move part of someone’s mortgage over to interest-only, so they clear just the interest that accrues on that part, thereby cutting monthly repayments.
Those fortunate enough to have some spare savings cash may want to consider using some of it to reduce what they owe. However, there are sometimes restrictions on overpaying. Others who are able to may want to put as much into savings as possible now, so they are ready for the higher bills that are probably inevitable.
If you are really concerned, you can ask your mortgage lender for a payment holiday. They may say no, but if they do offer you a break, it would typically be for about six to 12 months. But you should probably treat that as a last resort.
I’m on a base-rate tracker deal – what do I do?
A tracker directly follows the base rate, so your payments will – if the predictions are correct – almost certainly be going up over the coming months.
Much of the above advice will apply to these people, too. If you are concerned, speak to your lender to see what help they can offer, and maybe consult a broker.
You could look at moving to a fixed-rate deal. That may not be a tempting proposition but at least you will know that your monthly payments are fixed and will not go up for the period of the deal, which makes it easier to budget.
I’m on my lender’s standard variable rate. Should I get off it?
The short answer for most people sitting on their lender’s SVR is yes. Borrowers typically go on to the SVR when a deal ends.
SVRs can change at the lender’s discretion but most people will probably experience an increase in their monthly costs after the next interest rate rise.
The average SVR is 7.52%, according to Moneyfacts, and some lenders charge a fair bit more: Virgin Money’s SVR is 8.74% from 1 July. So, even with everything that has been happening, some people could save several hundred pounds a month by switching to a fixed-rate deal.
In some parts of the U.S., vegetable and flower seeds can be successfully planted directly into the garden. But in many areas, the growing season is too short to allow this.
Cool spring soil temperatures and cold weather can prevent seeds from germinating or kill young seedlings. If you wait until the weather warms, the plants get off to a late start only to be zapped by fall’s first frost; they don’t get a chance to bear a full crop or to put on a full floral display.
There are three solutions for home gardeners:
Buy all of your vegetables and flowers as plant starts, once the weather warms.
Extend the growing season outside with coldframes and rowcovers.
Start your own seeds inside while the wintry weather lingers.
The first choice is best for beginning gardeners who are working on a small scale. The second option is nice for committed gardeners who want to test the limits. Starting from seed, however, is easy, is cheaper per plant and allows a greater variety of choice among both ornamentals and crops than buying nursery plants.
I’m eager each (early) Spring to get my seeds going. On March 1st, I began seven types of flowers and my basil seeds. (As of March 5th, the basil has sprouted, as have a couple of the flowers.) In two weeks, I’ll start tomatoes and a few others, and the squash, cucumbers and more flowers will follow. How do I do it, and how do I know when to start? Here are my tips:
When Should I Start My Seeds?
In order to decide when to sow your seeds, you need to find the average last frost date for your region. In Oregon’s wet and unpredictable Willamette Valley, published last frost dates range from March 23 to May 14. Based on my own experience, I pick the latter end of this range and count backward from May 1st.
Click for full version of our 2009 seed-starting agenda.
I start my tomato plants six or seven weeks before this date. Slow-to-germinate flowers get an eight-week head start. Squashes and cucumbers don’t transplant especially well, but I germinate them inside to protect them from marauding slugs. I move them outside two weeks later before they’ve developed much of a root system.
What Should I Plant Indoors?
To determine what to plant indoors, read your seed packets. Many will list instructions for both inside and outdoor seed sowing. Knowing which to do will depend on your climate. With flowers, I often do both. I’ll start a limited number indoors for “insurance” and then sow the remainder of the packet directly in the garden once true Spring arrives.
Some crops should not be started indoors because they don’t transplant well or because they need an impractical amount of room. I would not recommend starting the following inside:
These cool season plants can withstand planting directly outside even before the weather fully warms. Likewise, things you are going to plant in large numbers should wait until they can be sown into the garden soil. The following are usually grown in sizable quantities:
Corn
Peas
Beans
If you are worried about your short growing season for crops like corn, look for varieties that have a short days-to-maturity period.
Tomatoes and peppers, broccoli, eggplants, cauliflower, melons and squashes can all be started successfully indoors. Herbs and flowers, too, benefit from the controlled environment of indoor seed starting. Let’s get started!
How Do I Start Plants From Seed?
The two most important factors for seed germination are temperature and humidity. The seed contains all the nutrients the plant needs to germinate, so it doesn’t need fertilizer or fertile soil.
Note: Fertilizer may actually prevent some seeds from sprouting. Generally, I avoid fertilizing until plants have grown their first set of “true leaves”, which look different than the first pair that emerges.
To start my seeds, I used the bio-dome from Park Seeds, a device that looks like a plastic greenhouse dome with a styrofoam tray. The tray holds little soil-less planting plugs called bio-sponges. Each plug has a hole in it for the seeds. I don’t normally advocate one product over another, but I really like these.
Seeds sprout best in a light soil; don’t use potting soil or garden dirt at this first stage! You can buy seed starting mix or make your own from peat moss, sand, and compost.
Note: Take care if using vermiculite; it can be a respiratory hazard. I prefer the little soil-less planting plugs because they’re mess free and they pop out easily for transplanting, doing minimal damage to the roots, but other methods work fine too.
Any device that keeps the environment moist and fairly warm will work. You can cover trays of soil with saran wrap or a dry-cleaning bag — poke plastic forks into the soil to hold the plastic layer up off the growing sprouts. Commercial peat pots, yogurt cups or milk cartons (poke drainage holes in the bottoms) or pots made from newspapers (avoid colored ink) all work fine, too.
Set your pots in a tray, tub or rimmed cookie sheet so you can water from the bottom, letting the moisture soak up through the soil. This helps keep the moisture level constant and prevents dislodging seeds with a fountain of water. Do not let the soil dry out! Little tiny seedling rootlets need constant moisture.
Seeds vary widely in size. I like to use tweezers to place them exactly where I want them. In general, seeds should be planted approximately four times deeper than their diameter. Some seeds need light to germinate and should be scattered just on the surface of the soil. Again, read those packets!
I usually put two seeds into each hole. I use three if I think the germination rate will be low. You can test your germination rate by placing ten seeds between layers of moist paper towels in putting them in a Ziploc bag in a warm place. This is a good idea if you have saved the seeds yourself or they are several years old. Do this 2-3 weeks before you want to actually start your seeds.
As you’re planting, take good notes! Make a planting diagram and jot down how many days it takes each type of seed to germinate. Some germination times are given as huge ranges (5-20 days). The happier the seed is (warm and wet), the speedier germination may be.
If you are using individual pots, mark them with labels or masking tape, unless you know for sure that you will recognize what the leaves of your young plants will look like. There’s nothing worse than getting your plants mixed up. This is especially important if you are starting different varieties of the same crop! Free plant stakes can be made simply by cutting up a plastic yogurt tub. Store your leftover seeds in a ziploc bag or glass jar in the refrigerator.
Now that the seeds are snug in their beds, cover them to retain moisture and put them in a warm place. A temperature of 70 degrees Fahrenheit (21 degrees Celsius) is ideal, but in March our house is nowhere near 70 degrees! I like to set my mini-greenhouse on a heating pad (a wet/dry safe heating pad set on low) to maintain a more constant temperature, since our thermostat drops to 54 degrees (12 Celsius) at night. Some people recommend putting the seed tray on top of the refrigerator. If your house is more temperate, the heat source is unnecessary. I have often started seeds without a heat source, but peppers and eggplants seem especially fussy about the temperature.
What Happens After the Seeds Sprout?
Once the seeds have germinated (keep them moist!), they’ll need light, nutrients and air. Give them some ventilation and move them to a very sunny window, supplemented with artificial light. There is no need to buy an expensive grow light or full spectrum light. For these purposes, a basic 48″ fluorescent shop light is all you need.
Tip: The type I own has two tubular bulbs per light; they’re available at home improvement stores for less than $20. The critical thing is to hang them in such a way that they can be raised as the plants grow; I use a link-type chain that can be doubled-up on itself to different lengths.
As your plants grow, keep the light about 6″ from their tops. If the light is too far away, the plants will grow spindly as they stretch for it. This can be rather tricky if you are starting different types of seeds at the same time, because they will grow at varied rates. You can lift the shorter ones with shoeboxes or phonebooks to alleviate this difficulty. Once all the seeds in your tray have germinated, remove the cover completely. Too much humidity at this stage can encourage mildew and harm the seedlings.
As you water, fertilize with a weak solution of water-soluble all-purpose fertilizer. I make mine about one-quarter the strength called for. Watch out for crystallized salts forming on your soil surface — that’s a sign you’re over-fertilizing and need to cut back. Turn the lights off for your plants at night (they need a dark cycle to grow properly) but leave the heat on (temperature fluctuations can stunt them).
What About Transplanting?
When the seedlings first sprout, they will usually have a pair of first leaves that look nothing like the true leaves that come later. (Many crops are dicots, but not all.) Watch closely, and soon after they have two sets of true leaves, it’s time to move the teenage seedlings into their first real apartment. Water your seedlings thoroughly an hour or two ahead of time, and then, working carefully and quickly, remove each seedling into its own pot.
At this point I generally use an all-purpose potting soil. Scooping them up from below, try your best to get all their little roots, and handle their tops as little as possible, and always by the leaves, rather than the stem. A damaged leaf can be replaced; a damaged stem often dooms a plant at this stage.
Depending on how long your plants will be living inside, you may perform only one transplant, or you may need two. For my tomatoes, I’ll move them into 4-inch plastic nursery pots first, then into gallon-sized pots before they go outside. Everything else gets one transplant, then into the garden.
Once your seedlings are thriving, it’s tempting to treat them a bit too carelessly. Being started inside in a safe environment, they can’t stand the shock of an immediate change in their conditions. Basically, they are weak, coddled little things. Expose them gradually to the out-of-doors by setting them outside on nice days for a few hours, being sure to bring them inside at night and making sure they don’t get sunburned or blown over. Some gardeners like to have a fan blow on their indoor starts, saying it strengthens the stems to withstand windy outdoor conditions. I can’t vouch for that, but I do think it helps prevent mildew.
Happy Planting
Wow, that seems like a lot of work when I write it all out. But it’s not really! Watching my garden plants grow from tiny seeds is a thrill every year. I love trying new things each spring and learning from my successes and failures. I hope these tips get you well on your way to learning what works best for you. Happy gardening!
If you have ever applied for life insurance, then you know that there are several important criteria that you need to keep in mind.
One of these is the amount of insurance protection that you will need to have. This is because you will want to ensure that those whom you care about will have enough in benefits to pay certain debts or have enough funds in order to pay their ongoing living expenses to go on and not have to drastically alter their lifestyle.
But there is also another extremely important factor that you must also include in your purchase decision. This is the actual company in which you purchase the coverage through.
This is because you will want to make sure that the insurance carrier is strong and stable financially and that it is known for paying out its claims to its policyholders. One such insurer that has fit into this mold for many years is SBLI Life Insurance Company.
The History of SBLI Life Insurance Company
SBLI has been known for many years as being “The No Nonsense Life Insurance Company.” This insurer has been in the business of providing coverage to its customers for nearly 110 years. The company’s founder, Louis D. Brandeis, started the insurance carrier during one of the worst stock market crashes in United States history, as well as at a time when the insurance industry in the U.S. was thought to be corrupt and very expensive.
Because of this, Brandeis – who was an advocate for trustworthy and affordable life insurance for the American working family – decided to start the company. He did so by working to pass Chapter 561 of the Acts of 1907 – and act that essentially allowed savings banks that were incorporated under Massachusetts laws to establish departments to issue annuities and life insurance. Today, the company’s headquarters are still located in Woburn, Massachusetts.
Throughout the years, the company grew quite a bit – and by 1930, it already had $100 million of life insurance in force. By 1964, it had reached the mark of $1 billion of life insurance in force. Just 34 years later, in 1998, it was at $20 billion in force, and by 2003, the company had surpassed the $50 billion mark. As of 2012, SBLI had more than $125 billion of life insurance in force.
SBLI Life Insurance Company Review
SBLI is known for being a strong contender in the insurance industry. It is also extremely involved in the communities that it serves. It contributes and/or is a sponsor of numerous charitable organizations, including the:
American Heart Association (AHA)
Massachusetts General Hospital Home Base Program
Boston Marathon Jimmy Fund Walk
New England Center and Home for Veterans
The Massachusetts Affordable Housing Alliance (MAHA)
The Rodman Ride for Kids
Woburn Memorial High School
The New England Center for Children
The company has also earned endorsements from organizations such as the:
Massachusetts Bankers Association
AAA Southern New England
AAA Merrimack Valley
For those who are interested in a policy, or who are current policyholders and who need assistance, the company’s customer services representatives are easy to get in touch with. They can be reached via toll-free phone line during business hours. There is also an email form or a fax that can be sent into the company. Business hours are between the hours of 8:00 a.m. and 9:00 p.m. Eastern time Monday through Friday.
Financial Strength and BBB Grade of SBLI Life Insurance Company
Over the years, SBLI Life Insurance Company has consistently earned high ratings from the insurer ratings agencies. This shows the company’s ongoing financial strength and stability. These ratings include the following:
A+ (Superior) from A.M. Best
A- from Standard & Poor’s
Good from Weiss Ratings
Since 2007, SBLI Life Insurance Company (The Savings Bank Life Insurance Company of Massachusetts) has been an accredited member of the Better Business Bureau (BBB). It has received a grade of A+ from the BBB, on an overall grading scale of A+ to F.
Throughout the past three years, SBLI has closed two complaints through the Better Business Bureau, and no complaints over the past 12 months. Of these two complaints, one centered on issues with the company’s products/services, and one had to do with billing/collections.
Life Insurance Products Offered Through SBLI
SBLI offers many different types of life insurance products so that customers can essentially customize coverage to fit their specific needs, as well as to provide what is needed throughout every stage of a customer’s life. This also helps to provide coverage, no matter what a person’s budget.
Life insurance products that are offered through SBLI Life Insurance Company include the following:
Term Life Insurance Coverage
Term life insurance coverage, provides death benefit protection only, without any cash value or investment build up. Because of this “basic” approach, term life insurance can be quite affordable – primarily if the applicant is younger and in good health.
This type of coverage is oftentimes referred to as “temporary” life insurance. This is because it is purchased for specific amounts of time such as ten years, 20 years, or 30 years. With that in mind, it will be important to have a good idea of how long you will need coverage if this is the type of life insurance policy that you choose.
SBLI offers three different types of term life insurance protection. These are:
Guaranteed Level Premium Term Life Insurance
With the Guaranteed Level Premium Term Life Insurance coverage, premiums are guaranteed to remain the same throughout the entire period of the policy. This particular plan will cover the insured until he or she reaches age 85. Once the guaranteed level premium period has ended, the premium will go up each year until the insured reaches age 85.
The level premium periods that can be chosen include durations of 10 years, 15 years, 20 years, 25 years, and 30 years, and coverage amounts can range between $100,000 to $30 million for those who are under age 70. For those who are age 70 and over, coverage may go up to $10 million.
Yearly Renewable Term Life Insurance
With Yearly Renewable Term Life Insurance, the policy will renew each year. This means that the premium that is paid by the insured will be determined based upon his or her current age. This type of coverage can be extremely affordable in the beginning years, and then increase as the insured gets older. This particular policy will automatically renew every year until the insured turns age 90. There is no medical exam that is required each year to provide proof of insurability. Between the ages of 75 and 90, the amount of the insurance will decrease each year.
Up until the time that the insured reaches age 70, he or she will be allowed to convert the term insurance coverage over into a permanent life insurance policy. This can also be done without the need for a medical exam to prove insurability.
One Year Non-Renewable Term Insurance
An individual may also choose to purchase a one-year non-renewable term life insurance policy. This life insurance coverage will stay in force for only one year. Coverage amounts on this plan can range between $100,000 and $10 million, and applicants age ranges can be between 18 and 90.
Permanent Life Insurance Coverage
SBLI Life Insurance also offers permanent life insurance coverage. With this type of life insurance, there is death benefit protection, as well as a cash value component. The funds that are in the cash value portion of the policy are allowed to grow on a tax-deferred basis. This means that no tax is due on the growth unless or until the policyholder withdraws them.
Permanent policies that are offered via SBLI include:
Continuous Payment Whole Life
The Continuous Payment Whole Life insurance option covers an insured for his or her entire lifetime. This means that the death benefit is guaranteed, and the policy will remain in force – provided that the premium is paid. The cash value will also continue to build up. This particular policy has a maturity age of 121 years old.
Single Premium Payment Whole Life
The single premium payment whole life insurance policy will also remain in force for the entire lifetime of the insured. This policy, however, only required one lump sum premium in order for the policy to be considered paid up.
Because of this, the cash value will get a “jump start” and it will continue to grow at a guaranteed rate of interest over time. The cash can be borrowed or withdrawn for any reason that the policyholder wishes.
Limited Payment Whole Life Insurance
The limited payment whole life insurance policy will also cover the insured for their whole lifetime. With this policy, the premium payments are only for a limited period. In this case, the options are for ten years, 15 years, 20 years, or until the insured is age 65. This policy also has a maturity age of 65 years old.
Other Coverage Products That Are Offered
In addition to life insurance, there are other products that are offered through SBLI Life Insurance Company. These can help the company’s customers to build and / or to protect their wealth. Some of these products include the following:
Annuities
An annuity is essentially an insurance contract that is between an individual and an insurance company. These financial vehicles can offer a guaranteed income for the remainder of a person’s lifetime. This can help to alleviate the worry of outliving your retirement income – which is a major concern of many people today.
There are several different types of annuities. SBLI offers the:
Single Premium Immediate Annuity@media(min-width:0px)#div-gpt-ad-goodfinancialcents_com-banner-1-0-asloadedmax-width:250px!important;max-height:250px!important
Optimizer MVA Series Annuity
Both of them are great options for supplementing your retirement income. There are a few different advantages to these annuities that you should take note of if you’re looking for a way to invest your money.
With their SBLI Single Premium Immediate Annuity is the best option for anyone that is looking to get payouts immediately. As you can probably guess from the name, you’ll only make one single payment, and then you start getting checks from the annuity.
With the SBLI Optimizer MVA Series on the other hand, it’s not an immediate payout. You’ll make an investment, which will then start building tax-deferred interest with payouts that will start on a date that you’ll pick. With this annuity, you’ll be able to make some withdrawals without the penalties if you’re ever diagnosed with a terminal illness.@media(min-width:0px)#div-gpt-ad-goodfinancialcents_com-large-leaderboard-2-0-asloadedmax-width:250px!important;max-height:250px!important
Elder Care Insurance
Because so many people are living so much longer today, long-term care has become a big concern as well. Unfortunately, that care can be very expensive. Therefore, many people are concerned about depleting their savings – primarily because Medicare does not typically pay for most kinds of long-term care needs.
SBLI offers SBLI Legacy Protection to help manage all of the necessary aspects of long-term care and estate planning – including legal overview, financial guidance, and nursing care management expertise.
How to Get the Best Premium Quotes on Life Insurance Coverage
When you are seeking the best premium quotes on life insurance coverage – either through SBLI Life Insurance Company or any insurance carrier – it is typically best to work with an independent agency or brokerage that has access to numerous different life insurance companies. That is because you will be better able to compare and contrast many different policies, benefits, and premium quotes, and then to determine which will be the best for you and your needs. This is not only true for when seeking the best life insurance policy, but when seeking other forms of covers as well, such as the best auto insurance companies and policies.
If you are ready to move forward with the purchase of a life insurance policy, then we can help. We work with many of the top life insurers in the industry today, and we can assist you with obtaining all of the pertinent details that you will require. All you have to do is fill out the form on this page, or you can jump over here and let Policy Genius guide you.
We understand that when it comes to life insurance coverage, there are a lot of options to choose from – even if you have been turned down in the past. But it sometimes takes having an ally on your side to help you narrow down what will be the best choices for you and your specific requirements. We will help to get you where you want to go. So, contact us today – we’re here to help.
There’s nothing worse than finding your dream apartment only to discover that you don’t quite meet the income requirements to qualify. Maybe you have poor credit or maybe you don’t make enough money each month to cover the rent. Whatever the reason, you know that you’re not quite what the landlord is looking for in a tenant. If you still have your heart set on that unit, you can bring in a co-applicant.
But there are benefits and drawbacks to co-applicants that you should know and consider before going down that road.
What is a co-applicant?
A co-applicant is an additional person you add to the rental application and resulting lease agreement for an apartment. If you have poor credit or your finances are in shambles due to recent bankruptcies, they boost your application with their improved assets like income or a great credit score.
Along with you, they jointly sign and bear the financial responsibility for paying rent for the apartment for the entire lease term. You both sign the lease agreements and are equally responsible for the apartment’s costs, but there is typically a primary applicant and then a secondary co-applicant. Think of it as a co-borrower when taking out a loan. You’re both taking out a stake to live in this apartment complex, and you’ll both be on the hook for costs. They also have the same rights to live in the apartment as you.
Both you and the co-applicant will need approval from the landlord. You’ll both need to submit apartment applications with all your personal information, rental history and employment history. The landlord will also need to run a background check and credit check to retrieve information on both you and the co-applicant to make sure you both qualify.
What is the difference between a co-applicant, a co-signer and a guarantor?
Terms like co-applicant, co-signer or guarantor are sometimes used interchangeably during the process of applying for a rental property. But in fact, there are key differences that separate all three. It’s also important to know and understand the differences between the three types in case you still need a third party to sign your lease but don’t necessarily want to live with that person.
Co-signer
A co-signer is a third-party person who signs a lease agreement along with the applicant, but they generally won’t live on the property. Similar to a co-applicant, they do have the right to live in the apartment or have access to it. People usually ask family members or friends to act as their co-signer and help vouch for them as tenants.
A co-signer is an insurance policy of sorts. By co-signing the lease, they’re guaranteeing that they’ll cover the rent in the event that the tenant fails in their responsibilities or falls behind on regular payments. For younger applicants just starting out who don’t have a good credit score or a well-paying job, many landlords prefer the stability of having someone co-sign.
Guarantor
A guarantor is a person who also signs the lease as a third party, but they aren’t entitled to live on or have access to the unit. Their relationship to the agreement is strictly financial, guaranteeing that either you or they will pay rent each month.
What are the pros of getting an apartment with co-applicants?
There are all sorts of benefits to renting an apartment with a co-applicant, from companionship to having someone to help with monthly rent payments.
Improves the odds of having your application accepted
Do you know that saying that two heads are better than one? Well, if you have bad credit or your monthly income is too low, two applicants are far better than one.
When you apply to an apartment with a co-applicant, their credit history, income and other assets are jointly considered along with yours. If you’re adding someone with more financial stability and overall better financial standing than you, it can greatly improve your odds of being accepted for the apartment.
Having someone to help pay rent
If you’re going to live with your co-applicants, odds are you’re both going to pay rent. With rental rates climbing ever higher, having someone to split the cost of the rent payment is a big money-saver.
Having an emergency fallback
Life happens and sometimes you come up short on rent on the first of the month. Knowing you have someone else you can turn to for help not only reduces stress but ensures you stay on good terms with the landlord and don’t have late payments added to your record.
Potentially lowers costs
Bringing on a co-applicant with excellent credit history can also help you save money. A good credit history shows that the co-applicant is financially responsible and more likely trustworthy. This can incentivize the landlord to reduce some fees like the security deposit.
Getting to live with someone else
Whether friend, partner or family member, living with someone you know and get along with has far more than financial benefits. It gives you the chance to create wonderful memories during a certain chapter in your life.
What are the cons of leasing an apartment with a co-applicant?
At the same time, you want to use care on who you sign a binding legal contract. People can reveal a whole different side of themselves when they move in. That’s true even individuals you’ve known for years like friends or partners.
That’s why it’s important to consider the ramifications of adding a co-applicant to the application process. It’s also why you shouldn’t simply sign a lease with someone you don’t know that well.
They have the same legal rights to the apartment
Co-applicants have the same rights to the apartment as you since both yours and their names are on the lease as co-signers.
If they don’t make sure that their share of the rent gets paid, you could be on the line for repayment.
Late or missed payments could damage the credit of both applicants
If you’re the primary applicant for the property and your co-applicant doesn’t pay their share of the rent, it could hurt your credit. Their credit will also be impacted.
Your relationship with the co-applicant could be impacted
If things go south between you and the co-applicant, it’s more than your finances that could be impacted. It could damage your relationship. That’s why one of the key takeaways in this debate is that you need to fully understand the ramifications of signing a legally binding document to live with someone.
Carefully consider who you want as your co-applicant
It’s all well and good to need someone to act as a fail-safe to help you get started as a renter. A co-applicant can bolster you. But, they can also become a hindrance if they’re not reliable since they have the same rights to the apartment.
Zoe Baillargeon is an award-winning writer and journalist based in Portland, Oregon, where she covers a variety of beats including travel, food and drink, lifestyle and culture for outlets like Apartment Guide, Rent., AFAR.com, Fodor’s, The Manual, Matador Network and more. In her free time, she enjoys traveling, hiking, reading and spoiling her cat.
Are you dreaming of owning a piece of the American Southwest? Arizona, with its vibrant desert landscapes, sunny weather, and diverse cultural attractions, offers an irresistible allure for those seeking a new place to call home. However, before embarking on this exciting journey, it’s essential to understand the homebuying process specific to the Grand Canyon State. From navigating local regulations and financial considerations to finding your perfect abode in a downtown Phoenix condo or a serene house in Gilbert, this Redfin article will serve as your comprehensive guide to buying a house in Arizona.
So, fasten your seatbelts as we explore the steps, intricacies, and tips to make your Arizona homebuying experience smooth and successful.
What’s it like to live in Arizona?
With its year-round sunshine and warm climate, Arizonans enjoy an outdoor-centric lifestyle by hiking, golfing, and exploring the vast desert landscapes. The state is also home to several renowned national parks and monuments, including the breathtaking Grand Canyon and the stunning red rocks of Sedona, providing endless opportunities for adventure and exploration. Arizona is also known for its intense summer heat, and protecting yourself and your property when living there is essential. Check out this article to learn more about the pros and cons of living in Arizona.
Arizona housing market insights
The Arizona housing market is experiencing some notable trends and shifts. The median sale price currently stands at $436,100, showing a 6.2% decrease compared to the previous year. Several cities in Arizona have emerged as competitive real estate markets, including Pinetop, Flagstaff, and Cottonwood. Popular cities in the Phoenix area, such as Scottsdale, Chandler, and Gilbert, are also witnessing significant growth and attracting prospective homebuyers. However, the housing supply in Arizona has decreased by 4.7% year-over-year, indicating a tightening market. These data points suggest a dynamic and evolving housing market in Arizona, with fluctuating prices, competitive cities, and limited supply, all of which have implications for buyers.
Finding your perfect location in Arizona
For several reasons, selecting the perfect location for buying a house in Arizona is vital. First and foremost, Arizona offers diverse landscapes and communities, each with its unique charm and amenities. By carefully considering your desired location, you can align your lifestyle preferences with the area’s offerings. Additionally, the location of your home greatly impacts factors such as commuting time, access to essential services, quality of schools, proximity to recreational opportunities, and potential appreciation of property value over time.
If you’re unsure where to start, using tools like a cost of living calculator can help you determine what cities are within your budget. We’ve put together a glimpse of the five popular cities, so you can get an idea.
#1: Tucson, AZ
Median home price: $330,000 Tucson, AZ homes for sale
Moving to Tucson offers a unique and vibrant experience that blends desert beauty, cultural richness, and a relaxed atmosphere. Outdoor enthusiasts can delve into the picturesque trails of Saguaro National Park, embark on invigorating hikes or bike rides in the nearby Catalina Mountains, or indulge in a round of golf on world-class courses. Embracing its rich cultural heritage, Tucson boasts a thriving arts scene featuring captivating museums, art galleries, and the renowned Tucson Gem and Mineral Show. While the cost of living in Tucson exceeds the national average by 4%, there are affordable Tucson suburbs, ensuring a balance between cost-effectiveness and access to the city’s attractions.
#2: Mesa, AZ
Median home price: $440,000 Mesa, AZ homes for sale
As the third-largest city in Arizona, Mesa is known for its suburban neighborhoods, well-maintained parks, and outdoor activities. Moving to Mesa, you’ll enjoy over 300 days of sunshine each year, making it ideal for outdoor enthusiasts. Explore the nearby Superstition Mountains, go hiking or biking in Usery Mountain Regional Park, or enjoy water sports at the nearby Saguaro Lake. Mesa also offers a rich cultural scene, with attractions such as the Mesa Arts Center, which hosts a variety of performances, exhibits, and festivals throughout the year.
#3: Phoenix, AZ
Median home price: $439,950 Phoenix, AZ homes for sale
Known as the Valley of the Sun, Phoenix is a bustling metropolis with a thriving economy, vibrant culture, and many amenities. With a move to Phoenix, residents can enjoy an abundance of sunshine throughout the year, allowing for a wide range of outdoor activities such as hiking, golfing, and exploring the scenic desert landscapes. Phoenix is home to major sports teams, including the Phoenix Suns and the Arizona Diamondbacks, offering exciting opportunities for sports enthusiasts. Additionally, if you’re looking for affordable Phoenix suburbs, several options provide a more budget-friendly housing market while offering access to the city’s amenities.
#4: Flagstaff, AZ
Median home price: $645,000 Flagstaff, AZ homes for sale
Flagstaff enjoys all four seasons, attracting residents who revel in the mesmerizing hues of autumn, the snowy winters that offer thrilling skiing and snowboarding opportunities at Arizona Snowbowl, and the mild summers perfect for hiking and camping. If you’re a lover of stars, moving to Flagstaff will grant you the chance to experience the Lowell Observatory, where residents can delve into the wonders of the night sky. It’s worth noting that the cost of living in Flagstaff is 14% higher than the National Average. Still, the city’s unique offerings and natural beauty make it a worthwhile investment for those seeking an exceptional living experience.
#5: Scottsdale, AZ
Median home price: $830,000 Scottsdale, AZ homes for sale
Scottsdale is renowned for its world-class resorts, spas, and golf courses, attracting visitors and residents seeking relaxation and indulgence. Scottsdale’s Old Town showcases a charming blend of historic charm and modern sophistication with its trendy boutiques, art galleries, and renowned dining establishments. Moving to Scottsdale can be expensive, with the cost of living exceeding the national average by 13%. If you want to stay on a budget, there are affordable suburbs outside downtown.
The homebuying process in Arizona
If the allure of Arizona has swept you away, and you have your heart set on a specific city or neighborhood, it’s time to dive into the homebuying process.
1. Prioritize your finances
Getting your finances in order is crucial when buying a house in Arizona. You can position yourself for a smooth and successful homebuying journey with careful financial planning and preparation. Start by assessing your credit score and addressing any issues to ensure you qualify for favorable loan terms. Next, determine your budget and calculate how much you can comfortably afford, considering factors like down payment, closing costs, and monthly mortgage payments. Using tools like an affordability calculator can help you determine your budget.
Various programs are available for first-time homebuyers in Arizona, including the Pathway to Purchase, which can assist with up to $20,000 in down payment and closing cost assistance.
2. Get pre-approved from a lender
Securing a pre-approval when buying a home in Arizona can provide numerous advantages. By obtaining pre-approval from a reputable lender, you clearly understand your financial standing and borrowing capacity. This knowledge empowers you to set a realistic budget, ensuring you focus on homes within your price range. Pre-approval also enhances your credibility as a buyer, demonstrating to sellers that you are serious and financially qualified.
3. Connect with a local agent in Arizona
Working with a local agent during the homebuying process in Arizona is of utmost importance. Local agents possess invaluable knowledge and expertise specific to the Arizona real estate market, which can significantly benefit buyers. They are well-versed in the intricacies of different neighborhoods, market trends, and pricing dynamics across the state. So whether you need a real estate agent in Tucson or an agent in Phoenix, they’re here to help.
4. Start touring homes
When touring homes in Arizona, keep a discerning eye and consider key factors that can influence your decision. First, pay attention to the home’s location and neighborhood. Consider proximity to schools, amenities, and commute times to ensure it aligns with your lifestyle. Assess the property’s condition, checking for any signs of wear, structural issues, or potential maintenance needs. Look for natural lighting, functional layouts, and ample storage space that meet your requirements.
5. Make the offer
The offer is a critical aspect of the homebuying process in Arizona, carrying significant weight in determining whether your dream home becomes a reality. Crafting a strong offer is essential to stand out in a competitive market. Consider the listing price, property condition, and local market trends to determine a fair and competitive offer. Your offer should include the purchase price, contingencies, and desired timelines for inspections, financing, and closing.
6. Close on the house
The closing process is a pivotal moment in the homebuying process in Arizona, where all the necessary paperwork is finalized, and ownership of the property is transferred. It’s a critical step that requires careful attention to detail and a thorough review of the closing documents. During the closing, you will sign various legal documents, including the mortgage, deed, and other necessary paperwork. It’s essential to carefully review and understand these documents before signing to ensure you know the terms and obligations.
If you’re new to the process and still have questions, Redfin is here to help. The First-Time Homebuyer Guide goes into more detail about each step in the homebuying process.
Factors to consider when buying a house in Arizona
Due to Arizona’s geographical location, there are distinct factors to consider when buying a home.
Climate and weather
When buying a house in Arizona, it is crucial to consider the climate and weather, as well as the impact climate change is having in the state. Arizona offers a diverse range of climates, with hot summers exceeding 100 degrees Fahrenheit (38 degrees Celsius) in desert areas like Phoenix and Tucson. These cities are also known for their mild and pleasant winters, attracting snowbirds and retired individuals seeking warmer temperatures. On the other hand, the northern parts of the state, including Flagstaff and Sedona, provide a cooler and more moderate climate, with snowy winters and comfortable summers. Homebuyers must take into account their preferences and tolerance for extreme heat or cold when selecting a location within Arizona.
Additionally, the state’s unique desert climate presents both advantages and challenges. Efficient cooling systems and proper insulation are necessary to combat the intense summer heat, while the dry weather increases the risk of drought and wildfires, prompting homeowners to consider shade availability, outdoor living spaces, and landscaping options to mitigate the sun’s impact.
Dual agency
Arizona allows for dual agency in real estate transactions, which refers to a real estate agent representing both the buyer and the seller in the same transaction. In dual agency, the agent acts as a neutral intermediary, facilitating the transaction and ensuring a fair process for both parties. However, it’s important to note that dual agency requires all parties’ informed consent.
Buying a house in Arizona: Bottom line
Navigating the homebuying process in Arizona requires careful consideration and strategic decision-making. From understanding the importance of location to getting finances in order, securing pre-approval, and working with local agents, each step plays a vital role in achieving a successful and satisfying home purchase. By being well-informed, proactive, and adaptable, homebuyers can confidently navigate the Arizona real estate landscape and find their perfect place to call home in this beautiful southwestern state.
Buying a house in Arizona FAQ
What are the requirements for buying a home in Arizona?
To start it off, a down payment is necessary, although the specific amount can vary depending on factors such as the loan type and lender requirements. A good credit score is also crucial, with a minimum score of around 620 often preferred for conventional loans. Income and employment verification is required to demonstrate the ability to repay the mortgage. Lenders assess the debt-to-income ratio to ensure borrowers can manage their monthly payments. It is advisable to conduct a property appraisal and home inspection to determine the value and condition of the property.
What is a typical down payment on a house in Arizona?
A typical down payment on a house in Arizona can vary depending on various factors. Generally, it ranges from 3% to 20% of the purchase price. The percentage often depends on the loan type, lender requirements, and the borrower’s financial situation. For conventional loans, a down payment of around 20% is ideal for avoiding private mortgage insurance (PMI). However, options are available for lower down payment percentages, such as 3% or 5%, particularly for first-time homebuyers or through government-backed loan programs like FHA loans.
What credit score do I need to buy a house in Arizona?
When buying a house in Arizona, the credit score requirement can vary depending on the type of loan and the lender’s criteria. Generally, a good credit score is preferred to qualify for favorable mortgage terms. A minimum credit score of around 620 or higher is typically required for conventional loans. However, loan programs, such as FHA loans, offer more flexibility and can accommodate borrowers with lower credit scores, sometimes as low as 580. It’s important to note that a higher credit score generally improves your chances of securing a mortgage with competitive interest rates and favorable terms.
High above the Las Vegas Strip, solar panels blanketed the roof of Mandalay Bay Convention Center — 26,000 of them, rippling across an area larger than 20 football fields.
From this vantage point, the sun-dappled Mandalay Bay and Delano hotels dominated the horizon, emerging like comically large golden scepters from the glittering black panels.Snow-tipped mountains rose to the west.
It was a cold winter morning in the Mojave Desert. But there was plenty of sunlight to supply the solar array.
“This is really an ideal location,” said Michael Gulich, vice president of sustainability at MGM Resorts International.
The same goes for the rest of Las Vegas and its sprawling suburbs.
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Sin City already has more solar panels per person than any major U.S. metropolis outside Hawaii, according to one analysis. And the city is bursting with single-family homes, warehouses and parking lots untouched by solar.
L.A. Times energy reporter Sammy Roth heads to the Las Vegas Valley, where giant solar fields are beginning to carpet the desert. But what is the environmental cost? (Video by Jessica Q. Chen, Maggie Beidelman / Los Angeles Times)
There’s enormous opportunity to lower household utility bills and cut climate pollution — without damaging wildlife habitat or disrupting treasured landscapes.
But that hasn’t stopped corporations from making plans to carpet the desert surrounding Las Vegas with dozens of giant solar fields — some of them designed to supply power to California. The Biden administration has fueled that growth, taking steps to encourage solar and wind energy development across vast stretches of public lands in Nevada and other Western states.
Those energy generators could imperil rare plants and slow-footed tortoises already threatened by rising temperatures.
They could also lessen the death and suffering from the worsening heat waves, fires, droughts and storms of the climate crisis.
Researchers have found there’s not nearly enough space on rooftops to supply all U.S. electricity — especially as more people drive electric cars. Even an analysis funded by rooftop solar advocates and installers found that the most cost-effective route to phasing out fossil fuels involves six times more power from big solar and wind farms than from smaller local solar systems.
But the exact balance has yet to be determined. And Nevada is ground zero for figuring it out.
The outcome could be determined, in part, by billionaire investor Warren Buffett.
The so-called Oracle of Omaha owns NV Energy, the monopoly utility that supplies electricity to most Nevadans. NV Energy and its investor-owned utility brethren across the country can earn huge amounts of money paving over public lands with solar and wind farms and building long-distance transmission lines to cities.
But by regulatory design, those companies don’t profit off rooftop solar. And in many cases, they’ve fought to limit rooftop solar — which can reduce the need for large-scale infrastructure and result in lower returns for investors.
Mike Troncoso remembers the exact date of Nevada’s rooftop solar reckoning.
It was Dec. 23, 2015, and he was working for SolarCity. The rooftop installer abruptly ceased operations in the Silver State after NV Energy helped persuade officials to slash a program that pays solar customers for energy they send to the power grid.
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“I was out in the field working, and we got a call: ‘Stop everything you’re doing, don’t finish the project, come to the warehouse,’” Troncoso said. “It was right before Christmas, and they said, ‘Hey, guys, unfortunately we’re getting shut down.’”
After a public outcry, Nevada lawmakers partly reversed the reductions to rooftop solar incentives. Since then, NV Energy and the rooftop solar industry have maintained an uneasy political ceasefire. Installations now exceed pre-2015 levels.
Today, Troncoso is Nevada branch manager for Sunrun, the nation’s largest rooftop solar installer. The company has enough work in the state to support a dozen crews, each named for a different casino. On a chilly winter morning before sunrise, they prepared for the day ahead — laying out steel rails, hooking up microinverters and loading panels onto powder-blue trucks.
But even if Sunrun’s business continues to grow, it won’t eliminate the need for large solar farms in the desert.
Some habitat destruction is unavoidable — at least if we want to break our fossil fuel addiction. The key questions are: How many big solar farms are needed, and where should they be built? Can they be engineered to coexist with animals and plants?
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And if not, should Americans be willing to sacrifice a few endangered species in the name of tackling climate change?
To answer those questions, Los Angeles Times journalists spent a week in southern Nevada, touring solar construction sites, hiking up sand dunes and off-roading through the Mojave. We spoke with NV Energy executives, conservation activists battling Buffett’s company and desert rats who don’t want to see their favorite off-highway vehicle trails cut off by solar farms.
Odds are, no one will get everything they want.
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The tortoise in the coal mine
Biologist Bre Moyle easily spotted the small yellow flag affixed to a scraggly creosote bush — one of many hardy plants sprouting from the caliche soil, surrounded by rows of gleaming steel trusses that would soon hoist solar panels toward the sky.
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Moyle leaned down for a closer look, gently pulling aside branches to reveal a football-sized hole in the ground. It was the entrance to a desert tortoise burrow — one of thousands catalogued by her employer, Primergy Solar, during construction of one of the nation’s largest solar farms on public lands outside Las Vegas.
“I wouldn’t stand on this side of it,” Moyle advised us. “If you walk back there, you could collapse it, potentially.”
I’d seen plenty of solar construction sites in my decade reporting on energy. But none like this.
Instead of tearing out every cactus and other plant and leveling the land flat — the “blade and grade” method — Primergy had left much of the native vegetation in place and installed trusses of different heights to match the ground’s natural contours. The company had temporarily relocated more than 1,600 plants to an on-site nursery, with plans to put them back later.
The Oakland-based developer also went to great lengths to safeguard desert tortoises — an iconic reptile protected under the federal Endangered Species Act, and the biggest environmental roadblock to building solar in the Mojave.
Desert tortoises are sensitive to global warming, residential sprawl and other human encroachment on their habitat. The U.S. Fish and Wildlife Service has estimated tortoise populations fell by more than one-third between 2004 and 2014.
Scientists consider much of the Primergy site high-quality tortoise habitat. It also straddles a connectivity corridor that could help the reptiles seek safer haven as hotter weather and more extreme droughts make their current homes increasingly unlivable.
Before Primergy started building, the company scoured the site and removed 167 tortoises, with plans to let them return and live among the solar panels once the heavy lifting is over. Two-thirds of the project site will be repopulated with tortoises.
Workers removed more tortoises during construction. As of January, the company knew of just two tortoises killed — one that may have been hit by a car, and another that may have been entombed in its burrow by roadwork, then eaten by a kit fox.
Primergy Vice President Thomas Regenhard acknowledged the company can’t build solar here without doing any harm to the ecosystem — or spurring opposition from conservation activists. But as he watched union construction workers lift panels onto trusses, he said Primergy is “making the best of the worst-case situation” for solar opponents.
“What we’re trying to do is make it the least impactful on the environment and natural resources,” he said. “What we’re also doing is we’re sharing that knowledge, so that these projects can be built in a better way moving forward.”
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The company isn’t saving tortoises out of the goodness of its profit-seeking heart.
The U.S. Bureau of Land Management conditioned its approval of the solar farm, called Gemini, on a long list of environmental protection measures — and only after some bureau staffers seemingly contemplated rejecting the project entirely.
Documents obtained under the Freedom of Information Act by the conservation group Defenders of Wildlife show the bureau’s Las Vegas field office drafted several versions of a “record of decision” that would have denied the permit application for Gemini. The drafts listed several objections, including harm to desert tortoises, loss of space for off-road vehicle drivers and disturbance of the Old Spanish National Historic Trail, which runs through the project site.
Separately, Primergy reached a legal settlement with conservationists — who challenged the project’s federal approval in court — in which the company agreed to additional steps to protect tortoises and a plant known as the three-corner milkvetch.
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The company estimates just 2.5% of the project site will be permanently disturbed — far less than the 33% allowed by Primergy’s federal permit. Regenhard is hopeful the lessons learned here will inform future solar development on public lands.
“This is something new. So we’re refining a lot of the processes,” he said. “We’re not perfect. We’re still learning.”
By the time construction wraps this fall, 1.8 million panels will cover nearly 4,000 football fields’ worth of land, just off the 15 Freeway. They’ll be able to produce 690 megawatts of power — as much as 115,000 typical home solar systems. And they’ll be paired with batteries, to store energy and help NV Energy customers keep running their air conditioners after sundown.
Unlike many solar fields, Gemini is close to the population it will serve — just a few dozen miles from the Strip. And the affected landscape is far from visually stunning, with none of the red-rock majesty found at nearby Valley of Fire State Park.
But desert tortoises don’t care if a place looks cool to humans. They care if it’s good tortoise habitat.
Moyle, Primergy’s environmental services manager, pointed to a small black structure at the bottom of a fence along the site’s edge — a shade shelter for tortoises. Workers installed them every 800 feet, so that if any relocated reptiles try to return to the solar farm too early, they don’t die pacing along the fence in the heat.
“They have a really, really good sense of direction,” Moyle said. “They know where their homes are. They want to come back.”
Primergy will study what happens when tortoises do come back. Will they benefit from the shade of the solar panels? Or will they struggle to survive on the industrialized landscape?
And looming over those uncertainties, a more existential query: With global warming beginning to devastate human and animal life around the world, should we really be slowing or stopping solar development to save a single type of reptile?
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Moyle was ready with an answer: Tortoises are a keystone species. If they’re doing well, it’s a good sign of a healthy ecosystem in which other desert creatures — such as burrowing owls, kit foxes and American badgers — are positioned to thrive, too.
And as the COVID-19 pandemic has demonstrated, human survival is inextricably linked with a healthy natural world.
“We take one thing out, we don’t know what sort of disastrous effect it’s going to have on everything else,” Moyle said.
We do, however, know the consequences of relying on fossil fuels: entire towns burning to the ground, Lake Mead three-quarters empty, elderly Americans baking to death in their overheated homes. With worse to come.
The shifting sands of time
A few miles south, another solar project was rising in the desert. This one looked different.
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A fleet of bulldozers, scrapers, excavators and graders was nearly done flattening the land — a beige moonscape devoid of cacti and creosote. The solar panel support trusses were all the same height, forming an eerily rigid silver sea.
When I asked Carl Glass — construction manager for DEPCOM Power, the contractor building this project for Buffett’s NV Energy — why workers couldn’t leave vegetation in place like at Gemini, he offered a simple answer: drainage. Allowing the land to retain its natural contours, he said, would make it difficult to move stormwater off the site during summer monsoons.
Safety was another consideration, said Dani Strain, NV Energy’s senior manager for the project. Blading and grading the land meant workers wouldn’t have to carry solar panels and equipment across ground studded with tripping hazards.
“It’s nicer for the environment not to do it,” Strain said. “But it creates other problems. You can’t have everything.”
This kind of solar project has typified development in the Mojave Desert.
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And it helps explain why the Center for Biological Diversity’s Patrick Donnelly has fought so hard to limit that development.
The morning after touring the solar construction sites, we joined Donnelly for a hike up Big Dune, a giant pile of sand covering five square miles and towering 500 feet above the desert floor, 90 miles northwest of Las Vegas. The sun was just beginning its ascent over the Mojave, bathing the sand in a smooth umber glow beneath pockets of wispy cloud.
On weekends, Donnelly said, the dune can be overrun by thousands of off-road vehicles. But on this day, it was quiet.
Energy companies have proposed more than a dozen solar farms on public lands surrounding Big Dune — some with overlapping footprints. Donnelly doesn’t oppose all of them. But he thinks federal agencies should limit solar to the least ecologically sensitive parts of Nevada, instead of letting companies pitch projects almost anywhere they choose.
“Developers are looking at this as low-hanging fruit,” he said. “The idea is, this is where California can build all of its solar.”
We trekked slowly up the dune, our bodies casting long shadows in the early morning light. When we took a breather and looked back down, a trail of footprints marked our path. Donnelly assured us a windy day would wipe them away.
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“This is why I live here, man,” he said. “It’s the most beautiful place on Earth, in my mind.”
Donnelly broke his back in a rock-climbing accident, so he used a walking stick to scale the dune. He lives not far from here, at the edge of Death Valley National Park, and works as the nonprofit Center for Biological Diversity’s Great Basin director.
As we resumed our journey, the wind blowing hard, I asked Donnelly to rank the top human threats to the Mojave. He was quick to answer: The climate crisis was No. 1, followed by housing sprawl, solar development and off-road vehicles.
“There’s no good solar project in the desert. But there’s less bad,” he said. “And we’re at a point now where we have to settle for less bad, because the alternatives are more bad: more coal, more gas, climate apocalypse.”
That hasn’t stopped Donnelly and his colleagues from fighting renewable energy projects they fear would wipe out entire species — even little-known plants and animals with tiny ranges, such as Tiehm’s buckwheat and the Dixie Valley toad.
“I’m not a religious guy,” Donnelly said. “But all God’s creatures great and small.”
After a steep stretch of sand, we stopped along a ridge with sweeping views. To our west were the Funeral Mountains, across the California state line in Death Valley National Park — and far beyond them Mt. Whitney, its snow-covered facade just barely visible. To our east was Highway 95, cutting across the Amargosa Valley en route from Las Vegas to Reno.
It’s along this highway that so many developers want to build.
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“We would be in a sea of solar right now,” Donnelly said.
Having heard plenty of rural residents say they don’t want to look at such a sea, I asked Donnelly if this was a bad spot for solar because it would ruin the glorious views. He told me he never makes that argument, “because honestly, views aren’t really the primary concern at this moment. The primary concern is stopping the biodiversity crisis and the climate crisis.”
“There are certain places where we shouldn’t put solar because it’s a wild and undisturbed landscape,” he said.
As far as he’s concerned, though, the Amargosa Valley isn’t one of those landscapes, what with Highway 95 running through it. The same goes for Dry Lake Valley, where NV Energy’s solar construction site is already surrounded by energy infrastructure.
What Donnelly would like to see is better planning.
He pointed to California, where state and federal officials spent eight years crafting a desert conservation plan that allows solar and wind farms across a few hundred thousand acres while setting aside millions more for protection. He thinks a similar process is crucial in Nevada, where four-fifths of the land area is owned by the federal government — more than any other state.
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If Donnelly had his way, regulators would put the kibosh on solar farms immediately adjacent to Big Dune. He’s worried they could alter the movement of sand across the desert floor, affecting several rare beetles that call the dune home.
But if the feds want to allow solar projects along the highway to the south, near the Area 51 Alien Center?
“Might not be the end the world,” Donnelly said.
He shot me a grin.
“You know, one thing I like to do …”
Without warning, he took off racing down the dune, carried by momentum and love for the desert. He laughed as he reached a natural stopping point, calling for us to join him. His voice sounded free and full of possibility.
Some solar panels on the horizon wouldn’t have changed that.
Shout it from the rooftops
Laura Cunningham and Kevin Emmerich were a match made in Mojave Desert heaven.
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Cunningham was a wildlife biologist, Emmerich a park ranger when they met nearly 30 years ago at Death Valley. She studied tortoises for government agencies and later a private contractor. He worked with bighorn sheep and gave interpretive talks. They got married, bought property along the Amargosa River and started their own conservation group, Basin and Range Watch.
And they’ve been fighting solar development ever since.
That’s how we ended up in the back of their SUV, pulling open a rickety cattle gate off Highway 95 and driving past wild burros on a dirt road through Nevada’s Bullfrog Hills, 100 miles northwest of Las Vegas.
They had told us Sarcobatus Flat was stunning, but I was still surprised by how stunning. I got my first look as we crested a ridge. The gently sloping valley spilled down toward Death Valley National Park, whose snowy mountain peaks towered over a landscape dotted with thousands of Joshua trees.
“Everything we’re looking at is proposed for solar development,” Cunningham said.
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Most environmentalists agree we need at least some large solar farms. Cunningham and Emmerich are different. They’re at the vanguard of a harder-core desert protection movement that sees all large-scale solar farms on public lands as bad news.
Why had so many companies converged on Sarcobatus Flat?
The main answer is transmission. NV Energy is seeking federal approval to build the 358-mile Greenlink West electric line, which would carry thousands of megawatts of renewable power between Reno and Las Vegas along the Highway 95 corridor.
The dirt road curved around a small hill, and suddenly we found ourselves on the valley floor, surrounded by Joshua trees. Some looked healthy; others had bark that had been chewed by rodents seeking water, a sign of drought stress. Scientists estimate the Joshua tree’s western subspecies could lose 90% of its range as the world gets hotter and droughts get more intense.
But asked whether climate change or solar posed a bigger threat to Sarcobatus Flat, Cunningham didn’t hesitate.
“Oh, solar development hands down,” she said.
Nearly 20 years ago, she said, she helped relocate desert tortoises to make way for a test track in California. One of them tried to return home, walking 20 miles before hitting a fence. It paced back and forth and eventually died of heat exhaustion.
Solar farms, she said, pose a similar threat to tortoises. And at Sarcobatus Flat, they would cover a high-elevation area that could otherwise serve as a climate refuge for Joshua trees, giving them a relatively cool place to reproduce as the planet heats up.
“It makes no sense to me that we’re going to bulldoze them down and throw them into trash piles. It’s just crazy,” she said.
In Cunningham and Emmerich’s view, every sun-baked parking lot in L.A. and Vegas and Phoenix should have a solar canopy, every warehouse and single-family home a solar roof. It’s a common argument among desert defenders: Why sacrifice sensitive ecosystems when there’s an easy alternative for fighting climate change? Especially when rooftop solar can reduce strain on an overtaxed electric grid and — when paired with batteries — help people keep their lights on during blackouts?
The answer isn’t especially satisfying to conservationists.
For all the virtues of rooftop solar, it’s an expensive way to generate clean power — and keeping energy costs low is crucial to ensure that lower-income families can afford electric cars, another key climate solution. A recent report from investment bank Lazard pegged the cost of rooftop solar at 11.7 cents per kilowatt-hour on the low end, compared with 2.4 cents for utility solar.
Even when factoring in pricey long-distance electric lines, utility-scale solar is typically cheaper, several experts told me.
“It’s three to six times more expensive to put solar on your roof than to put it in a large-scale project,” said Jesse Jenkins, an energy systems researcher at Princeton University. “There may be some added value to having solar in the Los Angeles Basin instead of the middle of the Mojave Desert. But is it 300% to 600% more value? Probably not. It’s probably not even close.”
There’s a practical challenge, too.
The National Renewable Energy Laboratory has estimated U.S. rooftops could generate 1,432 terawatt-hours of electricity per year — just 13% of the power America will need to replace most of its coal, oil and gas, according to research led by Jenkins.
Add in parking lots and other areas within cities, and urban solar systems might conceivably supply one-quarter or even one-third of U.S. power, several experts told The Times — in an unlikely scenario where they’re installed in every suitable spot.
Energy researcher Chris Clack’s consulting firm has found that dramatic growth in rooftop and other small-scale solar installations could reduce the costs of slashing climate pollution by half a trillion dollars. But even Clack said rooftops alone won’t cut it.
“Realistically, 80% is going to end up being utility grid no matter what,” he said.
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All those industrial renewable energy projects will have to go somewhere.
Sarcobatus Flat may not be the answer. Federal officials classified all three solar proposals there as “low priority,” citing their proximity to Death Valley and potential harm to tortoise habitat. One developer withdrew its application last year.
Before leaving the area, Cunningham pointed to a wooden marker, one of at least half a dozen stretching out in a line. I walked over to take a closer look and discovered it was a mining claim for lithium — a main ingredient in electric-car batteries.
If solar development didn’t upend this valley, lithium extraction might.
On the beaten track
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The four-wheeler jerked violently as Erica Muxlow pressed her foot to the gas, sending us flying down a rough dirt road with no end in sight but the distant mountains. Five-point safety straps were the only things stopping us from flying out of our seats, the vehicle leaping through the air as we reached speeds of 40 mph, then 50 mph, the wind whipping our faces.
It was like riding Disneyland’s Matterhorn Bobsleds — just without the Yeti.
Ahead of us, Muxlow’s neighbor Jimmy Lewis led the way on an electric blue motorcycle, kicking up a stream of sand. He wanted us to see thousands of acres of public lands outside his adopted hometown of Pahrump, in Nevada’s Nye County, that could soon be blocked by solar projects — cutting off access to off-highway vehicle enthusiasts such as himself.
“You could build an apartment complex or a shopping mall here, and it would be the same thing to me,” he said.
To progressive-minded Angelenos or San Franciscans, preserving large chunks of public land for gas-guzzling, environmentally destructive dirt bikes might sound like a terrible reason not to build solar farms that would lessen the climate crisis.
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But here’s the reality: Rural Westerners such as Lewis will play a key role in determining how much clean energy gets built.
Not long before our Nevada trip, Nye County placed a six-month pause on new renewable energy projects, citing local concerns about loss of off-road vehicle trails. Similar fears have stymied development across the U.S., with rural residents attacking solar and wind farms as industrial intrusions on their way of life — and local governments throwing up roadblocks.
For Lewis, the conflict is deeply personal.
He moved here from Southern California more than a decade ago, trading life by the beach for a five-acre plot where he runs an off-roading school and test-drives motorcycles for manufacturers. His warehouse was packed with dozens of dirt bikes.
“This is my life. Motorcycles, motorcycles, motorcycles,” he said, laughing.
Lewis has worked to stir up opposition to three local solar farm proposals. So far, his efforts have been in vain.
One project is already under construction. Peering through a fence, we saw row after row of trusses, waiting for their photovoltaic panels. It’s called Yellow Pine, and it’s being built by Florida-based NextEra Energy to supply power to California.
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Lewis learned about Yellow Pine when he was riding one of his favorite trails and was surprised to find it cut off. He compared the experience to riding the best roller-coaster at a theme park, only to have it grind to a halt three-quarters of the way through.
“I don’t want my playground taken away from me,” he said.
“Me neither!” a voice called out from behind us.
We turned and were greeted by Shannon Salter, an activist who had previously spent nine months camping near the Yellow Pine site to protest the habitat destruction. She and Lewis had never met, but they quickly realized they had common cause.
“It’s the opposite of green!” Salter said.
“On my roof, not my backyard,” Lewis agreed.
Never mind that conservationists have long decried the ecological damage from desert off-roading. Salter and Lewis both cared about these lands. Neither wanted to see the solar industry lay claim to them. They talked about staying in touch.
It’s easy to imagine similar alliances forming across the West, the clean energy transition bringing together environmentalists and rural residents in a battle to defend their lifestyles, their landscapes and animals that can’t fight for themselves.
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It’s also easy to imagine major cities that badly need lots of solar and wind power — Los Angeles, Las Vegas, Phoenix — brushing off those complaints as insignificant compared with the climate emergency, or as fueled by right-wing misinformation.
But many of concerns raised by critics are legitimate. And their voices are only getting louder.
As night fell over the Mojave, Lewis shared his idea that any city buying electricity from a desert solar farm should be required to install a certain amount of rooftop solar back home first — on government buildings, at least. It only seemed fair.
“Some people see the desert as just a wasteland,” Lewis said. “I think it’s beautiful.”
The view from Black Mountain
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So how do we build enough renewable energy to replace fossil fuels without destroying too many ecosystems, or stoking too much political opposition from rural towns, or moving too slowly to save the planet?
Few people could do more to ease those tensions than Buffett.
Our conversation kept returning to the legendary investor as we hiked Black Mountain, just outside Vegas, on our last morning in the Silver State. We were joined by Jaina Moan, director of external affairs for the Nature Conservancy’s Nevada chapter. She had promised a view of massive solar fields from the peak — but only after a 3.5-mile trek with 2,000 feet of elevation gain.
“It’ll be a little StairMaster at the end,” she warned us.
The homes and hotels and casinos of the Las Vegas Valley retreated behind us as we climbed, looking ever smaller and more insignificant against the vast open desert. It was an illusion that will prove increasingly difficult to maintain as Sin City and its suburbs continue their march into the Mojave. Nevada politicians from both parties are pushing for legislation that would let federal officials auction off additional public lands for residential and commercial development.
Vegas and other Western cities could limit the need for more suburbs — and sprawling solar farms — by growing smarter, Moan said. Urban areas could embrace density, to help people drive fewer miles and reduce the demand for new power supplies to fuel electric vehicles. They could invest in electric buses and trains — and use less water, which would save a lot of energy.
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“As our spaces become more crowded, we’re going to have to come up with more creative ideas,” Moan said.
That’s where Buffett could make things easier.
The billionaire’s Berkshire Hathaway company owns electric utilities that serve millions of people, from California to Nevada to Illinois. Those utilities, Moan said, could buck the industry trend of urging policymakers to reduce financial incentives for rooftop solar and instead encourage the technology — along with other small-scale clean energy solutions, such as local microgrids.
That would limit the need for big solar farms — at least somewhat.
Berkshire and other energy giants could also build solar on lands already altered by humans, such as abandoned mines, toxic Superfund sites, reservoirs, landfills, agricultural areas, highway corridors and canals that carry water to farms and cities.
The costs are typically higher than building on undisturbed public lands. And in many cases there are technical challenges yet to be resolved. But those kinds of “creative solutions” could at least lessen the loss of biodiversity, Moan said.
“There’s money to be made there, and there’s good to be done,” she said.
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It’s hard to know what Buffett thinks. A Berkshire spokesperson declined my request to interview him.
Tony Sanchez, NV Energy’s executive vice president for business development and external relations, was more forthcoming.
“The problem for us with rooftop solar,” he said, is that it’s “not controlled at all by us.” As a result, NV Energy can’t decide when and how rooftop solar power is used — and can’t rely on that power to help balance supply and demand on the grid.
Over time, Sanchez predicted, a lot more rooftop solar will get built. But he couldn’t say how much.
Rooftop solar faces a similarly uncertain future in California, where state officials voted last year to slash incentive payments, calling them an unfair subsidy. Industry leaders have warned of a dramatic decline in installations.
As we neared the top of Black Mountain, the solar farms on the other side came into view. They stretched across the Eldorado Valley far below — black rectangles that could help save life on Earth while also destroying bits and pieces of it.
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Moan believes the key to balancing clean energy and conservation is “go slow to go fast.” Government agencies, she said, should work with conservation activists, small-town residents and Native American tribes to study and map out the best places for clean energy, then reward companies that agree to build in those areas with faster approvals. Solar and wind development would slow down in the short term but speed up in the long run, with quicker environmental reviews and less risk of lawsuits.
It’s a tantalizing concept — but I confessed to Moan that I worried it would backfire.
What if the sparring factions couldn’t agree on the best spots to build solar and wind farms, and instead wasted years arguing? Or what if they did manage to hammer out some compromises, only for a handful of unhappy people or groups to take them to court, gumming up the works? Couldn’t “go slow to go fast” end up becoming “go slow to go slow”?
In other words, should we really bet our collective future on human beings working together, rather than fighting?
Moan was sympathetic to my fears. She also didn’t see another way forward.
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“We really need to think holistically about saving everything,” she said.
The sad truth is, not everything can be saved. Not if we want to keep the world livable for people and animals alike.
Some beloved landscapes will be left unrecognizable. Some families will be stuck paying high energy bills to monopoly utilities, even as some utility investors make less money. Some tortoises will probably die, pacing along fences in the heat.
The alternative is worse.
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In a nondescript building adorned with the LATAM logo sits a handful of Delta Air Lines employees — an arrangement that would’ve been unthinkable just a few years ago.
Earlier this month, Delta officially inaugurated its new South Florida offices, which are now in LATAM Cargo’s Miami headquarters.
There you’ll find about 10 full-time Delta employees, some of whom are working closely with LATAM to build out a joint-venture partnership between the two carriers.
The walls feature pictures of Delta and LATAM airplanes, and the space is so new that one of the conference rooms hasn’t even been built yet.
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The Delta employees working from this office even have a front-row view of LATAM’s cargo operations, watching as some of the airline’s freighters load and unload their goods before their next mission.
Every few minutes, you might even glimpse an American Airlines jet taking off in the distance — a somewhat ironic sight considering the circumstances.
Until mid-2020, the South American conglomerate LATAM was a member of the Oneworld frequent flyer alliance and a partner with American Airlines.
However, Delta wooed the airline away from its U.S. rival back in late 2019, in a move that shocked many industry observers. It acquired a 20% ownership stake in LATAM and also filed plans to begin a joint venture partnership (that includes profit sharing and schedule coordination) between the U.S. and South America.
That joint venture was approved in late September, and both Delta and LATAM have raced to implement it.
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Now that we’re nine months into the tie-up, Delta and LATAM invited me to check out their new digs and learn more about their nascent joint venture. Here’s what I learned.
Delta bolsters presence in key region
From Delta’s perspective, the joint venture was designed to quickly fill a noticeable gap in the airline’s global route map, Perry Cantarutti, senior vice president of alliances for Delta, said.
“When we looked at the world, that was one part of the world where we were not very well covered,” Cantarutti told TPG.
Before the tie-up, Delta was far from being the market leader in flights between the U.S. and South America. It offered just 122 flights on average a week between the two regions. Cirium schedules show that this was well below the 475 and 200 weekly flights American Airlines and United Airlines offered in 2019, respectively.
Nowadays, “We are together the No. 1 player between North and South America,” Cantarutti was proud to share.
The joint venture already connects more than 200 North American destinations served by Delta to the more than 120 South American destinations served by LATAM.
Also, at least nine new routes were teased as part of the pact, and five of them were formally announced, including:
Orlando-Bogota, Colombia (starts July 1)
Los Angeles-Sao Paulo (starts Aug. 1)
Miami-Medellin, Colombia (starts Oct. 29)
New York-Rio de Janeiro (starts Dec. 16)
Atlanta-Cartagena, Colombia(starts Dec. 22)
Together with some additional frequencies on existing routes, this translates to a 75% capacity increase since the pact was implemented — an impressive feat for such a new partnership.
Miami is becoming a ‘gateway hub’
When the joint venture was announced, Delta promised to turn Miami into a “gateway hub.”
Since then, Delta and LATAM have grown the Miami operation by nearly 40% more flights, according to Luciano Macagno, Delta’s managing director of Latin America, the Caribbean and South Florida.
From Miami, Delta has launched or recently increased service to Boston, Los Angeles, Orlando, Salt Lake City and Washington, D.C.
Additional domestic connectivity may be in the works. However, Delta’s existing domestic flights now cover most of the demand for travelers headed to or from Miami and those connecting beyond Miami into South America (and vice versa), Macagno said.
For instance, that short Orlando flight — a rare point-to-point route for Delta — is largely about funneling connections through Miami.
In addition to the new routes, Delta is upgrading its Miami terminal to better support the LATAM joint venture. This includes a more streamlined connecting experience when landing from an international destination, as well as adding Spanish signage across the entire facility.
Delta’s operations are co-located with LATAM’s in Miami (and a handful of other key airports). That’s a big improvement for travelers who used to connect from LATAM to American — a process that required a ton of walking and maneuvering around the airport.
The airline is also modernizing and expanding its Miami Sky Club to accommodate a total of 320 flyers with more than 12,000 square feet. Delta is even starting to insource its ground handling in Miami, too.
Although it’s not necessarily specific to Miami, Delta unveiled a Spanish version of its mobile app last week, a project that was accelerated due to the joint venture. Portuguese support is coming soon, according to Cantarutti.
Delta fills a bigger gap than American
When Delta purchased a stake in LATAM, it sent shockwaves throughout the aviation industry. The news upended some long-standing alliances throughout the hemisphere, perhaps most notably the deep-seated tie-up between American and LATAM.
While some industry insiders might’ve been surprised by the move, it makes total sense from LATAM’s perspective: Delta fills a bigger gap than American, providing access to more one-stop destinations for flyers.
“We’re very excited about the access to the interior of the U.S. and their gateways,” Marty St. George, chief commercial officer at LATAM, said in an interview.
Relative to American’s operation in Miami (the key connecting city under the American-LATAM pact), Delta’s Atlanta hub offers “many, many more destinations,” St. George said. “The thing I say to my team is that we will be selling customers to cities you have never heard of in your entire life.”
There is a “very, very long tail of demand to and from South America,” which accounts for roughly 20% of the traffic between the two continents, St. George added. The Delta joint venture enables LATAM to serve these cities with one-stop itineraries that wouldn’t have been possible with American.
While LATAM isn’t as big in Miami — the key U.S. gateway to South America — as it was with access to American’s big hub there, St. George isn’t worried. “We can manage Miami on our own … we have a lot of service there anyway,” he said.
SkyTeam membership could be coming
Delta and LATAM have already added reciprocal loyalty benefits, giving frequent travelers access to perks, such as lounge access, regardless of which airline they fly.
You can now earn and redeem miles on either airline, too.
But as exciting as the Delta partnership is, LATAM was once a key member of the Oneworld frequent flyer alliance. Membership in a global airline alliance helps boost connectivity and provides access to a broader network of customers. LATAM might consider joining Delta’s alliance, SkyTeam.
“Our focus right now is Delta … I think the concept of SkyTeam is a little bit in the future,” St. George said.
Pressed further, he added that the “experience working with Delta has been fantastic so far. They’re a great poster child for what the possible benefit of the SkyTeam would be.”
Reading between the lines, I wouldn’t be surprised if LATAM’s long-term plan includes membership in SkyTeam.
For now, though, it maintains a limited partnership with two Oneworld airlines, Iberia and Qantas, which help bolster its connectivity to Europe and Australia, respectively.
Metal neutrality is the goal
So far, executives at both airlines are happy with the progress that they’ve made in just under a year.
In the future, Delta and LATAM will continue working toward “metal neutrality,” Alain Bellemare, Delta’s president-international, said. This basically means that fares, loyalty benefits and the passenger experience will be aligned between both airlines.
The executive teams at both carriers meet once a quarter to go over long-term plans. They gather in cities that are commercially important to the joint venture, such as Atlanta, Miami and Lima, Peru.
While more route announcements and flyer benefits are in the works, both carriers are also doubling down on building their brands and awareness across the continents; this is especially true for Delta, which has historically been weak in South America.
Such measures include an advertising campaign and customer outreach across the continent. “We find it’s important because people don’t know what Delta is as a credit card or a faucet,” Cantarutti said.
Fast forward a few years, and I bet South American flyers will know Delta as the airline that’s partnered with LATAM — and vice versa in the U.S.