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Case Shiller home prices rise 4% annually | North Salem Real Estate

house down payment

In February, annual home price gains slowed across the country, according to the latest Case-Shiller Home Price Index from S&P Down Jones Indices and CoreLogic.

The report’s results showed that February 2019 saw an annual increase of 4% for home prices nationwide, falling from the previous month’s report.

The graph below highlights the average home prices within the 10-City and 20-City Composites.

(Click to enlarge)

S&P CoreLogic - Case Shiller - February

Before seasonal adjustment, the National Index decreased 0.2% month over month in February. The 10-City Composite and the 20-City Composite both posted a 0.2% month over month decrease.

After seasonal adjustment, the National Index recorded a month-over-month gain of 0.3% in February. Additionally, the 10-City Composite and the 20-City Composite posted also posted a 0.2% month-over-month increase.

The 10-City and 20-City composites reported a 2.6% and 3.1% year-over-year increase for the month, respectively. Before seasonal adjustment, 14 of 20 cities reported increases, while 17 of 20 cities reported increases after the seasonal adjustment.

S&P Dow Jones Indices Managing Director and Chairman of the Index Committee David Blitzer said the pace of increases for home prices continues to slow.

“Homes began their climb in 2012 and accelerated until late 2013 when annual increases reached double digits,” Blitzer said. “Subsequently, increases slowed until now when the National Index is up 4% in the last 12 months.”

And although sales of existing single-family homes have recovered since 2010 and reached their peak one year ago in February 2018, home sales have drifted down over the last year except for a one-month pop in February 2019, according to Blitzer.

“Sales of new homes, housing starts, and residential investment had similar weak trajectories over the last year,” Blitzer said. “Mortgage rates are down one-half to three-quarters of a percentage point since late 2018.”

Additionally, Blitzer notes that regional housing trends are changing, especially as previously thriving housing markets continue to lose appreciation.

According to the report, Las Vegas, Phoenix and Tampa reported the highest year-over-year gains among all of the 20 cities.

In February, Las Vegas led with a 9.7% year-over-year price increase, followed by Phoenix with a 6.7% increase and Tampa with a 5.4% increase. Notably, only one of the 20 cities reported larger price increases in the year ending February 2019 versus the year ending January 2019.

“The largest year-over-year price increase is 9.7% in Las Vegas; last year, the largest gain was 12.7% in Seattle. Regional patterns are shifting. The three California cities of Los Angeles, San Francisco and San Diego have the three slowest price increases over the last year. Chicago, New York and Cleveland saw only slightly larger prices increases than California,” Blitzer said. “Prices generally rose faster in inland cities than on either the coasts or the Great Lakes. Aside from Las Vegas, Phoenix, and Tampa, which saw the fastest gains, Atlanta, Denver, and Minneapolis all saw prices rise more than 4% — twice the rate of inflation.”

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Case-Shiller: Home price gains continue to slow, shifting regional housing trends

More buyers priced out of the market with higher rates | North Salem Real Estate

By Na Zhao, Ph.DNAHB Economics and Housing Policy GroupReport available to the public as a courtesy of HousingEconomics.com

This article announces NAHB’s “priced out estimates” for 2019, showing how higher home prices and interest rates affect housing affordability. The 2019 U.S. estimates indicate that a $1,000 increase in the median new home price would price 127,560 U.S. households out of the market. In other words, 127,560 households would qualify for the new home mortgage before the change, but not afterwards. Similarly, 25 basis points added to the current mortgage rate would price out around 1 million households. The article also includes priced out estimates for individual states and more than 300 metropolitan areas.

The Priced Out Methodology and Data

The NAHB Priced Out model uses the ability to qualify a mortgage to measure housing affordability, because most home buyers finance their new home purchase with conventional loans, [1] and because convenient underwriting standards for these loans exist. The standard NAHB adopts for its priced-out estimates is that the sum of the mortgage payment (including the principal amount, loan interest, property tax, homeowners’ property and private mortgage insurance premiums (PITI), is no more than 28 percent of monthly gross household income.

As a result the number of households that qualify for mortgages for a certain priced home depends on the household income distribution in an area and the mortgage interest rate at that time. The most recent detailed household income distributions for all states and metro areas are from the 2017 American Community Survey (ACS). NAHB adjusts the income distributions to reflect the income and population changes that may happen from 2017 to 2019. The income distribution is adjusted for inflation using the 2018 median family income published by the Department of Housing and Urban Development (HUD) for all states and metro areas, and then extrapolated it into 2019. The number of households in 2019 is projected by the growth rate of households from 2016 to 2017.

The assumptions of the priced out calculation include a 10% s down payment and a 30-year fixed rate mortgage, at an interest rate of 4.85%. For a loan with this down payment, private mortgage insurance is required by lenders and also included as part of PITI. The typical private mortgage insurance annual premium is 73 basis points[2], based on the standard assumption of national median credit score of 738[3] and 10% down payment and 30-year fixed mortgage rate. Effective local property tax rates are calculated using data from the 2017 American Community Survey (ACS) summary files. Homeowner’s insurance rates are constructed from the 2016 ACS Public Use Microdata Sample (PUMS).[4] According to Brisbane property valuers, for the U.S. as a whole, the property tax is $12 per $1,000 of property value and the homeowner insurance is $4 per $1,000 property value.

Under these assumptions, 32.7 million of the 122.5 million U.S. households could afford to buy a new median priced home at $355,183 in 2019. A $1,000 home price increase thus would price 127,560 households out of the market for this home. These are the households that can qualify for a mortgage before a $1,000 increase but not afterwards, as shown in Table 1 below.

Table 1. US Households Priced Out of the Market by Increases in House Prices, 2019

State and Local Estimates

The number of priced out households varies across both states and metropolitan areas, largely affected by the sizes of local population and the affordability of new homes. The 2019 priced-out estimates for all states and the District of Columbia are shown in Table 2 (available in the Additional Resources box), which presents the projected 2019 median new home price and the amount of income needed to qualify the mortgage, and the number of households could be priced out if price goes up by $1,000. Among all the states, Texas registered the largest number of households priced out of the market by a $1,000 increase in the median-priced home in the state (11,152), followed by California (9,897), and Ohio (7,341).

Table 3, which is available in the Additional Resources box, shows the 2019 priced-out estimates for 382 metropolitan statistical areas. The metropolitan area with the largest priced out effect, in terms of absolute numbers, is Chicago-Naperville-Elgin, IL-IN-WI, where 4,499 households are squeezed out of the market for a new median-priced home if price increases by $1,000. This is largely because Chicago is a populous metropolitan area with a large number of households; and, compared to the largest metropolitan areas on the East and West costs, the median priced home is more affordable to begin with. Around 27% of households there are capable of buying new median-priced homes. For similar reasons, Houston-The Woodlands-Sugar Land, TX metro area, where nearly 33% of households can afford median-priced new homes.to begin with, registered the second largest number of priced out households (3,546), where nearly 33% of households can afford median-priced new homes. In New York-Newark-Jersey City, NY-NJ-PA, 3,531 households are squeezed out of the housing market for a new median-priced home if price increases by $1,000. Compared to Chicago or Houston, the median-priced new home is affordable to a smaller share of the households in New York, but New York is the largest metro area by population size with over 7 million households.

Interest Rates

The NAHB 2019 priced-out estimates also present how interest rates affect the number of households would be priced out of the new home market. If the mortgage interest rate goes up, the monthly mortgage payments will increase as well and therefore higher household income thresholds to qualify a mortgage loan. Table 4 shows the number of households priced out of the market for a new median priced home at $355,183 by each 25 basis-point increase in interest rate from 2.85% to 10.85%. When interest rates goes up from 2.85% to 3.10%, around 1.26 million households could no longer afford buying median-priced new homes. An increase from 4.85% to 5.10% could price approximately one million households out of the market. However, about 423,000 households would be squeezed out of the market if interest rate goes up to 10.85% from 10.6%. This diminishing effects happen because only a few households at the thinner end of household income distribution will be affected. On the contrary, when interest rates are relatively low, 25 basis-point increase would affect a larger number of households at the thicker part of income distribution.

Table 4. US Households Priced Out of the Market by an Increase in Interest Rates, 2019

Footnotes[1]According to the 2017 American Housing Survey (funded by HUD and conducted by the Census Bureau), 74 percent of the home buyers who moved into their homes in 2016 or 2017 had a regular primary mortgage on the home.[2]Private mortgage insurance premium (PMI) is obtained from the PMI Cost Calculator( https://www.hsh.com/calc-pmionly.html)[3]Median credit score information is shown in the article “Four ways today’s high home prices affect the larger economy” October 2018 Urban Institute https://www.urban.org/urban-wire/four-ways-todays-high-home-prices-affect-larger-economy[4]Producing metro level estimates from the ACS PUMS involves aggregating Public Use Microdata Area (PUMA) level data according to the latest definitions of metropolitan areas. Due to complexity of these procedures and since metro level insurance rates tend to remain stable over time, NAHB revises these estimates only periodically.

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http://www.nahbclassic.org/generic.aspx?genericContentID=265844&_ga=2.145431924.1759393123.1547037557-774800730.1539205172

Decline for April Sales Masks 2017 Gains | North Salem Real Estate

Contracts for new single-family home sales fell more than expected in April, declining 11.4% to a 569,000 seasonally adjusted annual rate according to estimates from the joint data release of HUD and the Census Bureau. The decline occurred after solid, positive revisions for new home sales for the first three months of the year.

All told, total new home sales for 2017 stand at 210,000, a 11.3% gain over the 2016 comparable total of 189,000.

NAHB expects new home sales to continue to progress along the established, modest growth trend due to ongonig job growth, improving household formations, continuing favorable housing affordability conditions, and tight existing home inventory.

Inventory growth continued in April. After hovering near 240,000 for most of 2016, inventory has now risen to 268,000. The current months’ supply number stands at a healthy 5.7. Given tight existing inventory, more new homes are required to meet housing demand.

The most recent data also indicate a growing share of homes not-started in builder inventory. For example, on a year-over-year basis, homes under construction in inventory have increased by a little more than 6% over the last year. Completed, ready-to-occupy homes (there are only 59,000) are up 2% since April of last year. In contrast, homes not-started listed in inventory have increased 42%, from 36,000 in April of 2016 to 52,000 last month.

Pricing data in the April report find that the median sales price of new homes sold in April was $309,200, while the average price was $368,300. These levels are below the 2016 annual totals but remain higher than the 2015 data.

Regionally, all areas saw monthly declines in sales in April. Sales were down 26% in the West, 13% in the Midwest, 8% in the Northeast and 4% in the South. As with the national headline number, the monthly numbers obscure growth for 2017. On a year-to-date basis, new home sales are up 26% in the Midwest, 15% in the Northeast, 10% in the South and 7% in the West compared to April of 2016.

 

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http://eyeonhousing.org/2017/05/decline-for-april-sales-masks-2017-gains/

New Single-Family Home Size Continues to Trend Down | North Salem Real Estate

After increasing and leveling off in recent years, new single-family home size continued along a general trend of decreasing size during the start of 2017. This change marks a reversal of the trend that had been in place as builders focused on the higher end of the market during the recovery. As the entry-level market expands, including growth for townhouses, typical new home size is expected to decline.

According to first quarter 2017 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area was slightly lower at 2,389 square feet. Average (mean) square footage for new single-family homes declined to 2,628 square feet.

On a less volatile one-year moving average, the recent trend of declines in new home size can be see on the graph above, although current readings remain elevated. Since cycle lows (and on a one-year moving average basis), the average size of new single-family homes is 10% higher at 2,624 square feet, while the median size is 14% higher at 2,402 square feet.

The post-recession increase in single-family home size is consistent with the historical pattern coming out of recessions. Typical new home size falls prior to and during a recession as home buyers tighten budgets, and then sizes rise as high-end homebuyers, who face fewer credit constraints, return to the housing market in relatively greater proportions. This pattern was exacerbated during the current business cycle due to market weakness among first-time homebuyers. But the recent declines in size indicate that this part of the cycle has ended and size will trend lower as builders add more entry-level homes into inventory.

In contrast to single-family patterns, new multifamily apartment size is down compared to the pre-recession period. This is due to the weak for-sale multifamily market and strength for rental demand

 

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http://eyeonhousing.org/2017/05/new-single-family-size-continues-to-trend-down/

Mortgage rates average 4.15% | North Salem Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates slightly falling for the second consecutive week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.5 point for the week ending Feb. 16, 2017, down from last week when it averaged 4.17 percent. A year ago at this time, the 30-year FRM averaged 3.65 percent.
  • 15-year FRM this week averaged 3.35 percent with an average 0.5 point, down from last week when it averaged 3.39 percent. A year ago at this time, the 15-year FRM averaged 2.95 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18 percent this week with an average 0.4 point, down from last week when it averaged 3.21 percent. A year ago, the 5-year ARM averaged 2.85 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“For the last 46 years, the 30-year mortgage rate has been almost perfectly correlated with the yield on the 10-year Treasury, but not this year. From Dec. 29, 2016, through today, the 30-year mortgage rate fell 17 basis points to this week’s reading of 4.15 percent. In contrast, the 10-year Treasury yield began and ended the same period at 2.49 percent. While we expect mortgage rates to fall into line with Treasury yields shortly, this just may be a year full of surprises.”

Single-Family Construction Up | North Salem Real Estate

NAHB analysis of Census Construction Spending data shows that total private residential construction spending fell 0.7% in November to a seasonally adjusted annual rate of $462.9 billion.

Multifamily construction spending slowed for the first time since July to a seasonally-adjusted annual rate of $61.9 billion, down 2.9% from the revised October estimate. Despite the slowdown, multifamily spending was still 10.7% higher than the rate one year prior.  In contrast, single-family construction spending increased by 1.7% over the month, posting its second consecutive gain. However, single-family construction spending still slipped down by 0.9% over November 2015. Though not as pronounced as the drop-off in multifamily construction spending, home improvements still fell by a substantial 3.5%. On a year-over-year basis, spending on home improvements increased by 6.8%.

The NAHB construction spending index shown in the graph below illustrates the recent convergence, though small, of single-family spending with that of multifamily and home improvements.

The pace of private nonresidential construction spending increased by 2.5% over the month, more than offsetting the 2.1% October decline, reaching a pace 6.4% higher than one year ago. The primary drivers of this month-over-month increase were spending on structures to be used for lodging (+6.9%) and religious (+9.8%) purposes.

 

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http://eyeonhousing.org/2017/01/single-family-construction-up-in-november/

Housing bubble is probably more myth than reality | North Salem Real Estate

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If you own a home and you’ve visited real estate information websites Zillow, Trulia, Redfin, or any of the like recently, you’ve probably noticed an interesting trend: Your home is increasing in value at a rate that’s far and away higher than the national rate of inflation.

Is housing bubble 2.0 around the corner?

According to the S&P Case-Shiller Home Price Index, which tracks residential real estate prices nationally, as well as within 20 large metropolitan regions, residential real estate prices rose 5.3% between Aug. 2015 and Aug. 2016. By comparison, the national measure of inflation, the Consumer Price Index, has moved higher by a little more than 1% over the trailing 12-month period.

If we back the data out a bit further, the outperformance of housing prices becomes even more apparent. Real housing prices — essentially home price increases with inflation backed out — have risen by 25% just since 2012, and are now sitting at their highest point since the Great Recession. This is noteworthy considering that in the 107 years between 1890 and 1997, housing prices generally tracked the national inflation rate very closely, at least based on data from Robert Shiller in the book Irrational Exuberance. Only over the past two decades have we witnessed a diversion from the mean, with the first diversion leading to a massive housing bubble that’s still fresh in the minds of many homeowners.

This latest outperformance in housing prices, as well as the fresh memory of the recent housing collapse less than one decade prior, has some pundits predicting that housing bubble 2.0 could be right around the corner. A Dec. 2015 interview with 66 industry experts conducted by Zillow found that more than 10 believed the Boston, Los Angeles, and Miami markets were at risk of entering a bubble, while even more pundits believed New York and San Francisco were already there.

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IMAGE SOURCE: ARMCHAIRBUILDER.COM VIA FLICKR.

Home prices can continue to soar

However, it’s possible these industry experts could be completely wrong. Based on the evidence available at the moment, I’d contend that we’re not even close to a bubble in housing prices, and that home prices could very well outpace the national rate of inflation for many years to come.

Let’s have a closer look at why home prices could keep soaring.

1. Supply constraints

The biggest factor that could push home prices continuously higher is the trade-off between homebuilder supply and homeowner demand. According to Jesse Edgerton, an economist at J.P. Morgan, most national markets simply don’t have the homebuilder supply to meet demand, and that’s unlikely to change anytime soon.

In an interview with Yahoo! Finance, Edgerton had this to say:

One might wonder if these high prices reflect growing demand that could soon elicit a wave of construction that would prove our forecasts wrong. We find, however, that high prices are concentrated in markets where supply is constrained by geography or regulation, suggesting there may be little room for additional construction.

Data from J.P. Morgan indicates that while housing prices are rebounding rapidly from their recessionary lows, homebuilders appear content in increasing their supply at only a modest pace. Furthermore, the areas where an expansion of construction would appear to be beneficial — San Jose, Los Angeles, San Francisco, and so on — are also the areas that are the most limited in their ability to respond to an increase in demand.

It’s tough to predict how homebuilders will respond if prices continue to climb. For some builders, the allure of profits may be too great to ignore. However, if homebuilders can prudently manage their supply growth, they’ll likely encourage home prices to head higher at a rate that handily outpaces inflation.

 

2. A continuation of the low-lending-rate environment

Secondly, the ongoing low-lending-rate environment should continue to spur demand for new homes.

A home is arguably the largest purchase Americans will make during their lifetimes, and historically low mortgage rates could be the catalyst that coerces prospective homeowners to pull the trigger. Even more appealing is the fact that many Americans have far better FICO credit scores than they had a decade prior, meaning they’d probably qualify for sweeter deals from lenders.

Based on data released by FICO last year, the national average FICO score of 695 was an all-time high. Comparatively, the national average FICO score in Oct. 2005 was 688. FICO’s data showed a 3% increase in the number of consumers with a FICO score above 800 compared to the prior decade (FICO scores max out at 850), with a 2.1% decline in consumers with a FICO score under 550. Long story short, Americans appear to be in better shape than ever when it comes to getting a mortgage.

Though the Federal Reserve is the “X factor” here, and it can be completely unpredictable, the case for raising the federal funds target rate isn’t that strong. Inflation remains below the Fed’s target level, job creation has been up and down in 2016, and external factors, such as Brexit and China’s slowing GDP growth, could weigh on the growth outlook in the United States. After aiming for four interest-rate hikes in 2016, it’s quite possible the Fed ends the year without making a single move, which favors the continuation of a low-lending-rate environment.

 

3. The “rent” vs. “buy” trade-off

Over the longer term, the trade-off between renting and buying a home would also seem to favor rising housing prices.

If interest rates do normalize over the long term and head back to around 3%, it would presumably work in favor of the rental market. Higher interest rates mean higher mortgage rates, which in turn should push on-the-fence homebuyers back into renting. When this happens, landlords become privy to significant rental pricing power and are able to increase rental rates well above the national rate of inflation. Just the expectation of rising interest rates at some point soon has been pushing rental prices around the country higher, at a pace that’s well above the national inflation rate.

However, there comes a tipping point in the renting vs. buying trade-off where rental prices increase enough that buying a home actually becomes the cheaper option on a monthly basis. It happened to me in 2007, and it could very well happen to millions of Americans as rental inflation increases.

 

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http://www.fool.com/mortgages/2016/11/07/no-were-not-in-a-housing-bubble-and-yes-home-price.aspx

FHA increases loan limits going into 2017 | North Salem Real Estate

house sun

Home prices force loan limits higher

The Federal Housing Administration announced plans on Thursday to increase loan limits in 2017, announcing a significant jump in counties set to increase compared to last year.

Due to home price increases, the FHA said that most areas in the country will see a slight increase in loan limits in 2017.

These loan limits are effective for case numbers assigned on or after Jan. 1, 2017, and will remain in effect through the end of the year.

The FHA recalculates its national loan limit on a yearly basis. The limits are based on a percentage calculation of the nation conforming loan limit.

Here are the upcoming changes. In high-cost areas, the FHA national loan limit “ceiling” will increase to $636,150 from $625,500.  FHA will also increase its “floor” to $275,665 from $271,050.

Additionally, the maximum claim amount for FHA-insured Home Equity Conversion Mortgages (HECMs), or reverse mortgages, will increase to $636,150.

The FHA noted that this amount is 150% of the national conforming limit of $424,100.

The maximum loan limits for forward mortgages increased in 2,948 counties, which is attributed to changes in housing prices and the resulting change to FHA’s “floor” and “ceiling” limits.

There were no areas with a decrease in the maximum loan limits for forward mortgages though they remain unchanged in 286 counties.

This is compared to last year, which increased the loan limits in 188 counties due to changes in housing prices.

As an added note, FHA’s minimum national loan limit “floor” is set at 65% of the national conforming loan limit of $424,100. The FHA said the floor applies to those areas where 115% of the median home price is less than 65% of the national conforming loan limit.

For any area that doesn’t fit this and the loan limit exceeds the “floor,” it’s considered a high cost area. The maximum FHA loan limit “ceiling” for high-cost areas is 150% of the national conforming limit.

Check here for a complete list of FHA loan limits.

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FHA increases loan limits going into 2017

McMansion home construction rises | North Salem Real Estate

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chart1finalNew homes with 5,000 square feet or more of living space increased both as a share of all new construction and in absolute number in 2015, according to the Census Bureau’s Survey of Construction read more about this below in this article. In 2015, the share of new homes this size reached a post-recession peak of 3.9% of new homes started. The total number of 5,000+ square-foot homes started that year was 28,000 units.

chart2finalIn 2012, the number of new homes started with 5,000+ square feet rose to 15,000 units, yet their share remained at only 2.8%. In 2015, while the number of 5,000+ square feet homes started (28,000) was the highest since 2008, their share of the new market (3.9%) was the highest since 2004. A previous postdiscussed the declining trend in the median and average size of new single-family homes due to an expansion in entry-level market wherein home size is expected to trend lower. This is not necessarily a contradiction, because 5,000+ square foot homes are relatively uncommon and represent the extreme upper tail of the distribution. The extreme upper tail can behave differently than the center of the distribution, measured by the average or median.

In the boom year of 2006, 3.0% or 45,000 new homes started were 5,000 square feet or larger. In 2007, the share of new homes this size was 3.6%, yet the total number of 5,000+ square-foot homes started that year fell to 37,000. In 2008, only 20,000 such homes were started or 3.2% of the total. From 2009 to 2011, fewer than 13,000 of these large homes were started every year, accounting for less than 3% of all new construction during this period. The extent to which the 5,000+ square foot homes have recovered, roughly to where they were in 2008, shows a growing trend at the top of the market at least through 2015.

Growing number of firms offering energy-efficient modular design | North Salem Real Estate

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The Alfreds' net-zero residence, in Cumberland, Maine, is a modular design by BrightBuilt Home.
James R. SalomonThe Alfreds’ net-zero residence, in Cumberland, Maine, is a modular design by BrightBuilt Home.

When Shaun Alfreds and his wife decided to build a house for their family of five in Cumberland, Maine, they didn’t know if a high-performance project would be within their budget. “We aren’t wealthy by any stretch of the imagination, but we wanted an energy-efficient home,” says Alfreds, a chief operating officer at HealthInfoNet, a local health information technology company.

After some research, however, the couple realized that they achieve their dream for a nominal additional investment over the cost of a conventional house if they opted for a modular high-performance house. They chose a two-story, Cape Cod–style design from Portland, Maine–based BrightBuilt Home, and moved in last December.

At more than 3,000 square feet, the house is spacious, but its full sun exposure and a 10-kilowatt solar array of 39 photovoltaic (PV) panels should cover its energy consumption year-round. Alfreds says the house cost “almost exactly what other [builders] were bidding” for a standard, code-compliant project that was custom designed. And their small additional investment goes to building equity in the house, rather than to paying utilities.

BrightBuilt, a sister company of local firm Kaplan Thomson Architects (KTA), joins an increasing number of design companies that are expanding the market for high-performance residential projects. While KTA has custom-designed many energy-efficient houses, principal Phil Kaplan, AIA, says the firm also wanted to offer an off-the-shelf product. In 2015, it launched BrightBuilt with nine design templates. Starting at $175 to $180 per square foot, the houses bring net-zero energy to a price more people can afford. “We’re definitely seeing a lot of demand,” Kaplan says.

But some architects and builders have found ways to lower the price of net-zero housing even more.

De Verneil residence, by Deltec Homes (Ridgeline model)
Marie de VerneilDe Verneil residence, by Deltec Homes (Ridgeline model)

Marie de Verneil dreamed of building a retirement home on land she owned in central Virginia. “To me, green was very important,” she says. However, her savings from teaching French and international relations at the University of Maryland, Baltimore County, didn’t seem like enough. “It’s kind of discouraging for someone like me,” she says.

Kitchen, de Verneil residence
Marie de VerneilKitchen, de Verneil residence

Then de Verneil heard about Deltec Homes, in Asheville, N.C. The company—known for its distinctly round, prefabricated, and hurricane-resistant houses—recently launched Renew, a collection of models that use about two-thirds the energy of a conventional house and can include a PV array. De Verneil estimates she spent $250,000 on her 1,600-square-foot house (less than $160 per square foot), which includes a roof-mounted solar array. Her monthly electric bill is $30, the base fee for taxes and distribution. And when she is retired and living on a fixed income, she knows she’ll never have to say, “I can’t put the heat on.”

For those wanting to build a passive or net-zero energy house, right-sizing expectations is a crucial step to meeting one’s budget. And, as Deltec president Steve Linton adds, every project—modular or not—must be tailored to the particular site and climate. The company’s design team also conducts an energy model to evaluate site variables, solar energy capacity, building-shell size, features, and cost trade-offs.

Much of the market for high-performance housing is around single-family units in the suburbs, but the past few years have seen an uptick for multifamily dwellings and affordable housing projects in cities, including Washington, D.C., New York, and Philadelphia.

For low- and middle-income residents, in particular, an energy-efficient house can provide substantial benefits, says Orlando Velez, director of Housing Programs and Community at Habitat for Humanity of Washington, D.C.The organization recently built six passive townhouses last year in the district’s Ivy City neighborhood, whichhas a lot of air pollution. By creating a tight building envelope and filtering outside air, “you’re improving the air quality significantly,” Velez says. “It’s a healthier living environment.”

With savings from the lower utility bills, he says, residents may be able to spend more within the community. The organization plans to study those benefits over time to know whether energy efficiency is the best investment for its limited funds.

Ridgeline model in Deltec Homes' Renew Collection
Spacialists.com courtesy Deltec HomesRidgeline model in Deltec Homes’ Renew Collection
Interior rendering, Ridgeline model
Courtesy Deltec HomesInterior rendering, Ridgeline model

Living in a high-performance house can take some adjustment. Residents are often unfamiliar with high-tech HVAC equipment, such as energy recovery ventilators and solar water heaters. A tight building envelope also means that the size of the HVAC system can be decreased (fresh air supply is increased for indoor air quality purposes). The word that many residents use is “comfort”—indoor temperatures stay remarkably consistent across different areas of a house throughout the year.

 

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http://www.architectmagazine.com/technology/living-the-dream-of-a-net-zero-house_o