[CNBCで英語学習！]米国不動産市場へのインフレの影響[8分動画]

Record high inflation may have people questioning whether homeownership is a good investment. Property taxes on the median single family home have risen by more than 25% between 2019 and 2023. There's also been about a 20% increase in home insurance premiums between 2021 and 2023, according to insurance comparison company Insurify. Insurify estimates rates will rise another 6% by the end of 2024.

What many have failed to anticipate is the rise in both property taxes, and that's correlated to the rise in the value of their home, something that at some level helps them, as well as the increased cost of paying for that insurance. 82% of recent home buyers said they regret their purchase, with 44% saying they've had to take on additional debt to maintain their standard of living. Just because a person may own a valuable home doesn't necessarily mean that they're financially set. There are other costs associated to maintaining that property. Unfortunately, a lot of people go into buying a home and they don't understand that their monthly payment could change. More than 1 in 4 homeowners with mortgages spent more than 30% of their income on housing costs, implying they're cost burdened.

Here's why home payments are skyrocketing and how people shopping for a home can prepare. Homeownership is the primary path toward wealth creation in the United States. Single family homeowners accumulate an average of $225,000 in wealth from their homes during a ten year period, according to a 2022 report from the National Association of Realtors. That wealth sort of boils down to being primarily only on paper, and the time that you cash in that asset is when you sell the home. There's a saying: house rich, cash poor. Meaning people may own a valuable home, but that doesn't always translate into having cash on hand. Home prices have been increasing over the last few years, and it's outpaced income for the average consumer. That's a problem because that creates an affordability crisis for the average person. This can be a problem because as the value of a home rises, so does the cost to maintain it. Property taxes are one of the costs that can increase with the value of the home.

Homeowners whose properties were reassessed between 2019 and 2023 amid skyrocketing valuations, saw an increase in taxes. The median taxes for properties that were reassessed increased more than $600 for the year between 2019 and 2023. Local municipalities can do these. Each local government has a different form of them in certain areas where they go. We're going to do an assessment because we need to build some new infrastructure for something, and this is how we're going to raise the funds for it. And so that's another important thing with your realtor is to talk about. Has the town and county been talking about any sort of assessment like this coming up? Have you heard anything? If your realtor says, I don't know, then go get a new realtor right away because they should be following all this stuff because they are your advocate and they're your guide. An expert had told me that property taxes rarely go down. They usually go up.

Property tax increases in the past four years varied by state, with New Jersey, Connecticut and New York seeing the highest average property tax increases, while West Virginia, Alabama, Arkansas and Mississippi saw the lowest. It's always an option for homeowners to challenge essentially the tax assessment that they're getting relative to their own property. And I've been made aware of, for example, some attorneys that actually are in the business of doing that for homeowners. And I've known of some people who said, hey, what does it hurt to challenge that assessment, I would ask, well, first of all, is it worth your time and potentially your money to challenge that? But if you're really in a situation where you think it's unfair or inaccurate, then I think that's where the challenge is really do more properly come into play. Homeowners insurance is the other major expense that can fluctuate after a home purchase.

The average annual homeowner's insurance rates in the US increased from $1,384 in 2021 to $2377 in 2023. One estimate from Insurify predicts average annual rates will rise to roughly $2,500 by the end of 2024. The last couple of years, we've seen this spike, this huge increase, and it is because we are having more natural disasters in places. We're having more wildfires, we're having more flooding, we're having more mass destruction events. And those have to be recouped by insurance companies. Somehow, with the increase of hazardous weather, lots of major insurers are leaving areas, and it's not limited to California and Florida anymore, like we're seeing that in Colorado. And like other areas where wildfires, tornadoes are common. Those states are seeing the biggest spike in insurance rates with Florida leading the pack. The average annual rate for insurance in Florida was nearly $11,000 in 2023, which is more than $8,600 than the US average. Florida cities make up six of the top ten most expensive to insure in the country.

There are some states that actually have legislation in place that insurance companies can't raise your premiums more than a certain percentage each year. Insurance is a highly regulated and complex market, but going without it is not an option for many homeowners. Homeowners insurance is a necessity for people, particularly those who have a mortgage, because if anything happens to the house, we need to be able to recover the costs of the damage to the home, particularly if it is destroyed. You need to either do the repair or the replacement of that home. The cost of repairing a home has risen, which affects insurance premiums. Obviously, over time you want to try to make sure that you have the right homeowner's insurance, whether you're doing business with the right kind of entity that is best for you, including the kinds of coverage not only for homeowners but more broadly that you want to need. And so we try to control the things that we can control. We try to manage the things that we cannot and try to anticipate.

Understanding that there's a huge array of uncertainties associated with life and with home ownership. I think this is going to be a space to watch for the foreseeable future, simply because it is such a dynamic and volatile and potentially costly environment. There are ways for prospective homeowners to set themselves up for success. People who buy today with the assumption that they qualify based on the current real estate taxes or current insurance, need to really do more homework to understand where they could really be in a year. Homeowners should lean on their realtor first, and you need to look at things like how much your homeowner insurance is going to cost, even trash removal, water bills, gas bills. How much did the electricity cost last year? Can I get a history of things like the electrical bills, things that we know we can go back and see? Does your state have any laws that my property taxes can only go up a certain amount each year? That's a great question to ask if you're relocating to another state. A realtor is really important to work with because they're going to be able to answer all those questions for you. You want to leave yourself a little bit of room. Just because you qualify for $3,000 a month in a mortgage payment, doesn't mean you should max it out right now. Look for something where you can get in around $2,500. If $3000 is your comfortable budget, go a little lower than that so that you give yourself that room.

Current homeowners who are struggling to meet their monthly payments also have some options. Start on your county assessor's website. They have a ton of resources. Generally, if you can't find what you need, ask your realtor because they should be able to point you in the right direction. There are resources available in most states for property tax relief, and so you just need to go and learn what those are, see what you might qualify for. But don't just assume I gotta quit going out to eat. I gotta cut all these other expenses. There might be a way for you to get some relief on your property taxes. The Consumer Financial Protection Bureau, or CFPB, recommends reaching out to the Department of Housing and Urban Development to see if you qualify for any programs or additional help. The CFPB also suggests homeowners call their mortgage servicer to explain why they're unable to pay, whether it's a permanent or temporary situation, and details about their income and expenses. A mortgage lender may be able to work out a repayment plan or provide a loan modification. Homeowners can also consider switching insurance companies if their rates get too high. You should be interviewing insurance companies if that's the biggest takeaway from this entire segment that you're doing is interview everyone, interview a few lenders, interview a few realtors, interview a few insurance agents because they all have different things that they offer, and you need to find what works best for you.