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Photo Credit: Phil Hearing on Unsplash. Random, but neat home in a favorite Ohio village, Yellow Springs.

Owning a home has long been an integral part of our “American Dream”, and it is much more than just a roof over our heads, an idea that Jan Peppler, who writes the beautiful Substack newsletter, Finding Home discusses with grace. and purpose. There is also a more practical side of home ownership that’s important to think about as you ease out of the holidays and prepare for the next round of home-centered celebrations. Recent surveys show that most of new and repeat homebuyers are both older and richer, over one quarter of current homeowners can’t afford to repair damage caused by climate change-induced storms, home appraisals discriminate based on the owners’ race, and a New York Times focus on a home that has been a part of the documentary film maker, Ken Burns’ life and livelihood.

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— First up is a survey taken by the National Association of Realtors (NAR) between June 2023 and July 2024 that showed a surprising change in the age and wealth of home buyers during this period. Only 24% of all buyers were first time homebuyers , the lowest since 1981, the year the NAR began issuing its national real estate reports, and down from 32% just last year. The average age of first-time home buyers was 38, up from 35 last year, while the average age of repeat buyers was 61 versus 58 the previous year.

This means that older and wealthier, repeat buyers are cornering the market on single family homes while younger generations now are losing close to a decade from previous generations in building wealth through home ownership—the median age of first-time home buyers during the 1980’s, for example, was 28—29.

“The U.S. housing market is split into two groups: first-time buyers struggling to enter the market and current homeowners buying with cash,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “First-time buyers face high home prices, high mortgage interest rates and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers. Meanwhile, current homeowners can more easily make housing trades using built-up housing equity for cash purchases or large down payments on dream homes.”

A CNN analysis of NAR’s most recent report shows the rising cost of housing along with higher interest rates and lower inventory is giving wealthier people a greater advantage than in previous decades, with a whopping 31% of repeat buyers paying for homes with all cash offers.

— And then there is climate change. A survey conducted this year by Bankrate revealed that 26% of homeowners said they were not financially prepared to cover damage caused by extreme weather events. And it turns out that 2023, for example, was a banner year for extreme weather and climate events and government money spent to help mitigate the resulting damage sand losses. According to the National Oceanic and Atmospheric Administration (NOAA), Climate.gov site:

In 2023, the U.S. experienced 28 separate weather and climate disasters costing at least 1 billion dollars [each]. That number puts 2023 into first place for the highest number of billion-dollar disasters in a calendar year…

NOAA map, below, by NCEI.

If you’re fortunate enough to own a home, and like most of us, still have to watch expenses closely, now is a good time to follow these recommended strategies to ensure your home is appropriately insured for your location and financially prepare for an extreme weather event.

…at least 43% of homeowners say they have not done anything within the past five years to protect their property against extreme damage, according to Bankrate’s 2024 Extreme Weather Survey. The survey also found that 15% of homeowners say they would be unable to pay their deductible without going into debt if their home sustained major damage, while at least 13% said they didn’t even know what their homeowners insurance deductible is…. Plus, 44.8% of homes in America—with a total value nearing $22 trillion—confront at least one type of severe or extreme climate risk from either flood, wind, wildfire, heat, or air quality, according to the 2024 Realtor.com® Housing and Climate Risk Report.

— I was shocked, shocked I tell you, to learn that some home appraisers discriminate based on the race of their clients! Actually, I’ve been reading about it for years, including the “whitewashing” backlash: After getting a ridiculously low appraisal, Black homeowners remove everything from their home that might indicate they are Black and then have a white friend greet the appraiser—presto! The stand-in “white” owners receive a second appraisal for hundreds of thousands more.

Despite ongoing accounts of ingrained discrimination over the past two years, researchers exploring racial inequality in the housing market have not had access to appraisals. This changed last week [August 2020] when, following a directive from the Biden administration, the Federal Housing Finance Agency released 47 million appraisal reports to the public for the first time.

The appraisals, which were compiled between 2013 and 2021, present evidence of a persistent, widespread practice in the home appraisal industry to give higher values to homes when the occupants are white, and devalue them if the owners are people of color.

In October 2024, the Department of Justice sued Rocket Mortgage, the country’s largest lender, for appraisal discrimination. According to a New York Times piece published last month:

The home appraisal industry, which relies partly on subjective opinions to translate home values into dollars and cents, has faced a firestorm of criticism in recent years. Nearly 95 percent of home appraisers are white, according to the Bureau of Labor Statistics…

— It’s always good to wrap on a positive note, and this New York Times article on the documentarian, Ken Burns, is both fascinating and uplifting. The article’s focus is more on the land and home in a tiny town in New Hampshire that allowed Mr. Burns the freedom and space to create his work, and less on the person and extensive film portfolio he has created.

Ken Burns has slept in the same bedroom for the past 45 years. While numerous additions have been made to the original house, he proudly points out that the bedroom, where his first and second daughters were born 42 and 38 years ago, hasn’t changed. (Immediately, he corrects himself to mention that the mattress has changed.) The white colonial and a barn are flanked by an apple orchard in the electric green hills of New Hampshire in a town called Walpole. It’s this house and this piece of land that gave him the financial freedom to make the films of his choosing… [It] allowed Mr. Burns to explore, gave him peace and shut him out from the rest of world so he could see it more clearly.

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I’d love to hear your thoughts on today’s housing market and how it’s affecting you and your housing choices. If you can’t access one or more of the articles because of a paywall, please let me know in the comments or message and I’ll send it to you directly.

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