Feb. 20, 2019

New homes: Builders see spike in optimistic buyers

LAS VEGAS – Feb. 19, 2019 – Builder confidence in the market for newly-built single-family homes rose four points to 62 in February, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released in Las Vegas during the 75th annual International Builders' Show.

"Ongoing reductions in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment," says NAHB Chairman Randy Noel. "In the aftermath of the fall slowdown, many builders are reporting positive expectations for the spring selling season."

February marked the second consecutive month in which all HMI indices posted gains. The index measuring current sales conditions rose three points to 67, the component gauging expectations in the next six months increased five points to 68, and the metric charting buyer traffic moved up four points to 48.

"The five-point jump on the six-month sales expectation for the HMI is due to mortgage interest rates dropping from about 5 percent in November to 4.4 percent this week," says NAHB Chief Economist Robert Dietz. "However, affordability remains a critical issue. Rising costs stemming from excessive regulations, a dearth of buildable lots, a persistent labor shortage and tariffs on lumber and other key building materials continue to make it increasingly difficult to produce housing at affordable price points."

Looking at the three-month moving averages for regional HMI scores, the South posted a one-point gain to 63 while the Northeast dropped two points to 43. The Midwest and West each remained unchanged at 52 and 67, respectively.

Derived from a monthly survey NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

© 2019 Florida Realtors®

Feb. 19, 2019

Florida Housing relaunches first-time homebuyer program

TALLAHASSEE, Fla. – Feb. 18, 2019 – On March 4, the Florida Housing Finance Corporation (Florida Housing)will relaunch the Florida Hardest-Hit Fund Down Payment Assistance Program (HHF-DPA) in five approved counties.

This federal program was originally implemented to prevent foreclosures by stimulating home purchase activity and stabilizing neighborhoods in certain counties that demonstrated high levels on housing market distress.

HHF-DPA provides up to $15,000 in down payment and closing cost assistance to eligible first-time homebuyers and is forgivable over five years. Florida Housing has successfully disbursed 100 percent of the over $1 billion in HHF program funds allocated by the U.S. Department of Treasury two years ahead of schedule and is now using approximately $20 million in repayments of HHF program loans to assist additional Floridians.

Previously, HHF-DPA was available in 11 Florida counties. For the relaunch, Florida Housing used the latest market data to conduct a Treasury-mandated assessment of lingering negative effects in local housing markets. Based on this assessment, Florida Housing will assist eligible first-time homebuyers in Clay, Duval, Hillsborough, Osceola and Pasco counties.

"Statistics show that foreclosures have drastically decreased in Florida and that our state has recovered from the housing crisis," said Trey Price, executive director of Florida Housing. "This funding will further assist with the continued stabilization of recovering, distressed neighborhoods."

As of Jan. 31, 52,742 Florida families have received assistance through HHF programs and more than 20,000 received down payment and closing cost assistance through HHF-DPA. It is estimated that approximately 1,500 eligible first-time homebuyers will be assisted with this additional funding.

First announced on Feb. 19, 2010, by the U.S. Department of the Treasury, the Housing Finance Agency (HFA) Innovation Fund for the Hardest-Hit Housing Markets (HFA Hardest-Hit Fund) provides federal funding to states hardest hit by the aftermath of the burst of the housing bubble. Funding was allocated to 18 states and the District of Columbia.

Florida Housing was created by the Legislature more than 35 years ago. It's the state's housing finance agency (HFA) that administers state and federal resources to help provide affordable homeownership and rental housing options for the citizens of Florida. For more information, visit floridahousing.org.

© Copyright © 2019, Highlands News-Sun, Karen Clogston. All Rights Reserved.  

Feb. 15, 2019

Wallpaper: Should sellers tear it down or keep it up?

CHICAGO – Feb. 14, 2019 – Wallpaper is once again an attractive decorating trend for homeowners looking for textures and accents, but it's not for everyone.

Designer Jessica Lagrange of Jessica Lagrange Interiors in Chicago works primarily with luxury clients who love wallpaper. Here's what she advises about the "stay or strip" decision before listing a home.

  1. The clash test. Some wall coverings are neutral, such as those with small patterns, intriguing textures in soft hues or subtle metallic finishes. These are assets if they're chosen in conservative or traditional colors, Lagrange says. The litmus test is how severely the print clashes with a range of furnishings and artwork.
  2. An education campaign. There are wallpaper treatments that are extraordinary, such as some scenic designs that cost thousands of dollars. Listing agents should have a strategy in place to educate buyers and other agents who aren't familiar with them if a home has one. If buyers aren't interested, wallpaper can sometimes be removed and reused by the seller, Lagrange says.
  3. Be willing to part with the paper. Big-personality wallpapers can be exciting in small doses, such as accent walls. But not everyone will agree. A seller should be ready to remove wallpaper if a buyer isn't wild about it.
  4. Get real. If wallpaper looks worn, dirty or ripped and can't be repaired, sellers need to remove it rather than have it become an eyesore during showings – no matter how much they love it, she says.

Source: Wallpaper Makes Triumphant Return, Realtor® Magazine

© Copyright 2019 INFORMATION INC., Bethesda, MD (301) 215-4688

Feb. 14, 2019

Alone on Valentine’s Day? Buy a house and find true love!

SANTA CLARA, Calif. – Feb. 13, 2019 – Owning a home might make you more attractive to that special someone you've had your eye on, especially if they are a millennial or a woman.

According to a realtor.com study, singles looking to boost their chances of dating a homeowner may want to considering living in the South or in the Midwest because they are home to the biggest shares of single female and male homeowners, respectively, according to the analysis.

"Attractiveness is in the eye of the beholder, and this survey data suggests that many beholders find homeownership attractive, perhaps using it as a signal for financial savviness and success," says Danielle Hale, realtor.com's chief economist. "Single millennials seem to find homeownership in a potential partner especially attractive."

The survey, which included 500 people who identified as single and was conducted in late January, found that 46 percent of all singles thought homeownership made a potential partner attractive or very attractive. Women were more likely than men to agree with this, as 48 percent of women found it made a potential partner more attractive, versus 43 percent of men.

Men, however, were slightly more likely to say that it made their potential partner very attractive.

The survey also asked singles how important it was for a potential partner to be a homeowner. Similar to before, women were more likely than men to agree it was either important or very important that their partner was a homeowner.

But the gap between genders was wider than when asking about attractiveness of homeowners, coming in at 29 and 19 percent for women and men, respectively.

As a whole, 24 percent of single respondents felt it was important for their partner to be a homeowner.

Millennials show strong desire for homeownership
Millennials were the most likely to feel that homeownership boosted someone's attractiveness, with nearly 60 percent of the generation agreeing with the statement. Millennials also were the generation most likely to agree that it was either important or very important for their partner to be a homeowner, as indicated by 26 percent.

Single male homeownership highest in Midwest
For those looking to find a potential home-owning male partner, the Midwest is going to be the best bet. The market with the greatest share of single male homeowners is Detroit, where they make up 23.4 percent of all males. It was followed by St. Louis with 21.3 percent, Minneapolis with 21.3 percent, Cleveland with 21.2 percent, and Pittsburgh with 19.9 percent.

Single female homeownership strong in South and Midwest
Single women are one of the fastest growing demographics in the housing market, according to a recent realtor.com analysis. This trend can be seen strongest in Detroit, where single women homeowners make up 23.1 percent of all women, followed by 21.4 percent in Baltimore, 21.2 percent in Charlotte, N.C., 20.7 percent in Philadelphia and 20.7 percent in Minneapolis.

© 2019 Florida Realtors®

Feb. 13, 2019

Florida's housing market: Sales, new listings, median price up at end of 2018

ORLANDO, Fla. – Feb. 12, 2019 – Florida's housing market wrapped up 2018 with more sales, higher median sale prices and more new listings compared to the year before, according to the latest housing data released by Florida Realtors®.

"Florida's economy is growing, the jobs outlook remains strong and more people are moving to the Sunshine State," says 2019 Florida Realtors President Eric Sain, . "And, while mortgage interest rates have fluctuated in recent months, they remain at historically low levels. All of these factors are positive signs for the state's housing market in 2019."

Year-end 2018

Statewide closed sales of existing single-family homes totaled 277,827 in 2018, up 2.2 percent compared to the 2017 figure, according to data from Florida Realtors research department in partnership with local Realtor boards/associations.

The statewide median sales price for single-family existing homes in 2018 was $254,505, up 7.2 percent from the previous year. New listings for existing single-family homes rose 6.5 percent in 2018 compared to 2017.

Looking at Florida's year-to-year comparison for sales of townhouse-condos, a total of 116,706 units sold statewide in 2018, up 4.9 percent from 2017. The closed sales data reflected fewer short sales and foreclosures statewide in 2018 compared to the previous year: Short sales for condo-townhouse properties declined 37.5 percent and foreclosures dropped 33.9 percent; short sales for single-family homes dropped 41.4 percent while foreclosures declined 39.5 percent.

The statewide median price for townhouse-condo properties in 2018 was $185,000, up 7.2 percent over the previous year. New listings for townhouse-condos for the year increased 5.9 percent compared to a year ago.

At the end of 2018 and also for 4Q 2018, inventory for single-family homes stood at a 4-months' supply, while inventory for townhouse-condo properties was at a 5.7-months' supply, according to Florida Realtors.

Florida Realtors Chief Economist Dr. Brad O'Connor said Florida's housing data shows that statewide inventory (active listings) is up, comparing year end 2018 to year end 2017.

"It's not a significantly huge increase – active inventory is up 13.3 percent in single-family homes and up 8 percent in condo-townhome properties," he said.

More inventory could help spark sales, bringing back potential buyers who have been waiting on the sidelines.

O'Connor added, "The national housing market forecast (from the National Association of Realtors) for 2019 expects flat growth, in both the condo and single-family categories. Currently, in our Florida forecast model, we're outpacing the nation in sales and employment growth, so our outlook is probably about 1 percent growth in sales and maybe 3 to 4 percent price growth. Relative to all other areas of the nation, we think Florida is doing really well."

The interest rate for a 30-year fixed-rate mortgage averaged 4.54 percent for 2018, up significantly from the previous year's average of 3.99 percent, according to Freddie Mac.

4Q 2018

Statewide closed sales of existing single-family homes totaled 63,483 in the fourth quarter of 2018, up 0.1 percent compared to the year-ago figure, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

The statewide median sales price for existing single-family homes for the quarter was $255,000, up 6.3 percent from 4Q 2017. New listings for existing single-family homes for the quarter rose 5 percent compared to a year ago.

Looking at Florida's year-to-year comparison for sales of condos-townhouses, a total of 26,069 units sold statewide in 4Q 2018, up 1.9 percent compared to the same period a year earlier. The closed sales data reflected fewer short sales and foreclosures statewide in the fourth quarter compared to the same time a year ago: Short sales for condo-townhouse properties declined 41.2 percent and foreclosures dropped 29.1 percent; short sales for single-family homes dropped 41.6 percent and foreclosures declined 26.5 percent.

The statewide median price for condo-townhouse properties in 4Q 2018 was $184,000, up 5.1 percent over the previous year. New listings for condos-townhouses for the quarter increased 2.9 percent compared to a year ago.

To see the full statewide housing activity reports, go to Florida Realtors Research & Statistics section on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors' website.

© 2019 Florida Realtors®  

Feb. 11, 2019

Mortgage rates hit 10-month low

WASHINGTON (AP) – Feb. 7, 2019 – U.S. long-term mortgage rates fell this week to a 10-month low, spurring on potential homebuyers for the upcoming season.

Mortgage buyer Freddie Mac said Thursday the average rate on the benchmark 30-year, fixed-rate mortgage eased to 4.41 percent from 4.46 percent last week. Despite the declines in recent weeks, home borrowing rates are still above last year's levels. The key 30-year rate averaged 4.32 percent a year ago.

The average rate this week for 15-year, fixed-rate loans declined to 3.84 percent from 3.89 percent.

Increases in home prices have slowed in many areas of the country, and more homes have come on the market. Those developments, along with historically low mortgage rates, should give a boost to this spring's home buying season, experts say.

"The U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view," said Freddie Mac chief economist Sam Khater.

The Federal Reserve held its benchmark interest rate steady last week and sent its strongest signal to date that it sees no need to raise rates anytime soon. Its message ignited a rally on Wall Street, which cheered the prospect of continued modest borrowing rates for the near future.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.

The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages fell this week to 0.4 point from 0.5 point. The fee on 15-year mortgages held steady at 0.4 point.

The average rate for five-year adjustable-rate mortgages dropped to 3.91 percent from 3.96 percent last week. The fee was unchanged at 0.3 point.

AP Logo Copyright © 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Feb. 7, 2019

A ‘perfect’ credit score is a myth

NEW YORK – Feb. 6, 2019 – Question: I'm currently purchasing a house and I noticed on my credit report that my score is 807. One of the items hurting it is length my accounts have been open.

I have Lowe's, Home Depot and Discover cards all with zero balances. Should I close them? If so, all at once or filter them over the course of time? I've always liked having them for just in case, but I don't use them very often if at all. Thoughts? – Todd

Answer: You've been bamboozled. Tricked. Hoodwinked. We all have. Collectively, we've decided we're going to let an otherwise meaningless score mean a lot to us. And in the process, we've made decisions that make no sense whatsoever, and in turn damaged the meaningful signs of financial stability.

Todd, this isn't necessarily your fault, but if you let me, I'd like to save you from caring about your credit score any more than you have to.

You have an 807. That's enough. It's fine. Stop. Despite popular belief, the goal isn't to have a perfect score. I hear that all the time. "I have perfect credit," someone will lob at me in an attempt to elicit some sort of figurative cookie. But it takes every ounce of restraint not to scream back "Who cares?! It doesn't matter!"

Your credit score is no longer a measure of your financial health. More than anything, it's used to gamify your involvement in the selling of your data. The credit bureaus, or data bureaus as I prefer to call them, sell what they call your "decision analytics" to companies who want to sell you things and want to know exactly how you think and act.

Because every time you swipe a card, dozens of data points are captured about your transactions. Those data points, when aggregated over time with your other purchase data points, write your financial memoir.

"We don't eat much junk food," you assert. Well, that's not what your purchase of an economy box of Ding Dongs every other Thursday at 8:57 a.m. at the grocery store on 95th Street says. I'm not kidding.

The decision analytics data know more about you than you know about yourself. It's very powerful and valuable information, which is sold over and over and over again. You can't escape your own decisions, because your decisions are used against you to provoke more suboptimal decisions.

This isn't science fiction. This is real.

If you ever find yourself sleeping too well, and you'd like to terrify yourself with the ins and outs of decisions analytics – and more specifically data crimes – read Marc Goodman's "Future Crimes: Inside the Digital Underground and the Battle for Our Connected World."

So, to answer your question, once you close on your new home, close the credit lines you don't need. And yes, your credit score will temporarily suffer. Your credit score easily qualifies you for great interest rates, and you have plenty of room to spare. Plus, I'm guessing you won't be buying another home anytime soon.

Simply put, sometimes we're encouraged to make poor decisions in order to improve our credit scores. You can't take the bait.

Not too long ago when I was refinancing my mortgage, the lender told me to improve my score, which was somewhere in the high 700s, by diversifying my credit. "Diversify my credit?" I replied with a scrunched face.

I was told my purposeful decision to maintain only three credit lines, which included two mortgages on two different properties, wasn't good enough. Did it affect my rate? No, of course not.

But the bank wanted me to know I was making a poor decision by not borrowing more money, and my "poor" credit score was the result. They encouraged me to consider taking out a home equity line, a car loan or any other different type of loan that could display my ability to handle different types of credit. Hard pass.

You don't have an actual problem, Todd. You've just been convinced that it's a problem. This medium shirt doesn't fit because my biceps are too big. See? That's not an actual problem.

And by the way, that was merely an example. Sadly, my arms have plenty of room in my shirt, but at least I don't care about my credit score.

Peter Dunn is an author, speaker and radio host, and he has a free podcast: Million Dollar Plan.

Copyright 2019, USATODAY.com, USA TODAY, Peter Dunn – "Pete the Planner"

Feb. 6, 2019

Florida sees more out-of-state buyers from high-tax states

NEW YORK – Feb. 5, 2019 – The massive tax reform package signed in December 2017 changed things. With a new state and local tax cap of $10,000, high-income homeowners in high-tax states such as New York found themselves facing a notably bigger tax burden than they once did.

However, that makes low-tax states, such as Florida, more attractive.

New York Gov. Mario Cuomo is now facing a $2.3 billion budget deficit that he says, in part, is due to an exodus of homeowners seeking a better tax picture – and he specifically noted that many New Yorkers unhappy with the new tax laws are moving to South Florida.

The Wall Street Journal, citing a Zillow study, says "preliminary data show a jump in Florida home purchases by buyers from high-tax states," and that "home values in lower-tax areas have been rising faster than those in places where limiting the ability to deduct high state and local taxes eroded some of the savings from the federal tax reduction."

Jonathan Miller, a real estate appraiser who focuses on the South Florida market, says he's "starting to see New Yorkers as Florida's new foreign buyer. … If they were already on the fence, I think the tax law has changed the calculus for some."

According to July 2017-2019 Census data, Florida had the nation's highest level of net domestic migration, while New York lost the most residents.

Source: The Wall Street Journal, Laura Kusisto, Arian Campo-Flores and Jimmy Vielkind

© 2019 Florida Realtors®

Feb. 5, 2019

Zillow spends $1M trying to improve its ‘Zestimates’

SEATTLE – Feb. 4, 2019 – Zillow's estimate of a home's value, called the Zestimate, can be powerful: Some homeowners track them like a stock, and when it gets to a certain point, they may decide to sell. Home shoppers gauge the estimate against the list price of a home. Others use it just to gawk at their neighbor's home values.

But it's far from perfect: In Seattle, the Zestimate is off by a median of 4.7 percent compared to the actual sale price, according to the company – a $35,000 difference on the typical house. Real-estate brokers have long complained that the numbers give sellers, in particular, a distorted view of their home's true worth.

Now the Zestimate, that little number that appears at the top of every home's Zillow page and updates daily, is in line to get more accurate.

On Wednesday, the Seattle-based company awarded a $1 million prize to the winners of a public contest to improve its algorithm. The winning team, three guys from Raleigh, Toronto and Morocco who teamed up despite never having met in person, came up with a way to beat Zillow's own data scientists to a better estimate.

The contest started a year and a half ago with 3,800 teams from 91 countries and was narrowed down to 100 finalists last year. The teams were given seven years' worth of data on a sample of millions of homes across the country, and were tested to see how closely their estimated values for each home matched up with the actual sale prices of homes that sold in the ensuing months.

Jordan Meyer, the American on the winning team, reduced his workload at his day job as CTO of an analytics company and poured about six hours a day into the contest, communicating with his teammates, Moroccan computer science professor Chahhou Mohamed and Canadian artificial intelligence startup founder Nima Shahbazi, on the messaging application Slack.

Meyer started by finding every data source he could – the exact longitude and latitude of houses could be used to determine the proximity to streets and therefore determine noise near the house. Slight differences in distance from a body of water could influence a home price by thousands of dollars. In the end each home had hundreds of different data points.

But the strategy that set them apart was trying wildly different algorithms and merging the ones that worked together to get the best blended average.

"It was extremely hard," Meyer said in an interview. He called the process "relentless experimentation" and echoed Shahbazi, who said in a statement: "For every idea that worked, there were a hundred that didn't work. But we kept going."

Zillow has slowly improved its Zestimate from a median error rate of 14 percent when it started in 2006 to 5.7 percent when the contest began in mid-2017. It's now down to 4.5 percent nationally (it's higher in some cities and lower in others), and once the winners' tweaks to the algorithm are incorporated, the company expects the error rate to dip to about 4 percent.

"We're happy with the progress we're making." said Stan Humphries, Zillow's chief analytics officer. "You're going to get some way off. We do 115 million of these every day," referring to the number of homes on Zillow with a Zestimate, "so yes, we get concerned when we're off, and we're committed to making them even more accurate. This is an important number. The implications of getting it right are really important."

Humans are still better than machines

Homes nationally sell on average for about 2 percent less than the list price set by brokers, according to data from Redfin. Brokers have access to information that an algorithm often doesn't – the Zestimate relies on publicly available data and voluntary input from homeowners, which can give an incomplete picture of a house.

"There are way too many factors for a certain algorithm to work," said Sam Mansour, a managing broker with John L. Scott in Lynnwood. He said he constantly has to battle with clients who cling to their Zestimate. "I've been to homes and people say 'my Zestimate is worth X amount,' and I'm like, 'no, no.'"

He said he's also heard of homeowners who use their Zestimate, and the company's one-year forecast of their home value, to justify how much they'd like to borrow against their home. (Zestimates aren't used in official proceedings, like a home appraisal or a home-equity loan.)

Mansour said the biggest factor a computer can't track is the emotional appeal of a home, which can vary wildly from buyer to buyer and is a primary driver in how much people offer. And certain attributes that get plugged into algorithms are going to be weighed differently by various buyers – a large lot might appeal to some, but to others, it just means extra yard work.

Sometimes Zillow is really off – the median error rate of 4.5 percent nationally means half of home values are wrong by more than 4.5 percent.

Zillow says about 1 in 8 Zestimates winds up being wrong by at least 20 percent. That includes the 2016 home sale made by Zillow CEO Spencer Rascoff – who sold his Seattle home for 40 percent less than his Zestimate. In some counties where public data isn't great or there aren't many homes, Zestimates don't exist, or the median error rate can be above 10 percent.

Zillow is the most-clicked real estate site in the nation and was the first to offer a home-value estimator, but these days other websites like Redfin and realtor.com also offer their own home-value estimates.

The winners of the prize agreed to split their $1 million share evenly. As for what Meyer will do with his cut?

"I'll be investing in real estate for sure," he said.

© 2019 The Seattle Times, Mike Rosenberg. Distributed by Tribune Content Agency, LLC.

Feb. 1, 2019

Federal agencies propose private flood insurance fix

WASHINGTON – Jan. 31, 2019 – The National Flood Insurance Program (NFIP) is in trouble. Thanks in part to a multitude of national disasters, the program has paid out far more money than it's taken in by way of premiums but hopes of a federal fix through legislation has been delayed so far. Instead, Congress has authorized a series of short-term delays rather than tackling a broader reform package.

A move by the Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency late last week could be the first step in attacking the problem from a different direction, though.

The rule proposal would make private flood insurance more available in flood zones, but it's not official yet – it still needs three other federal regulators, including the Federal Reserve, to sign off on it. It also doesn't tackle all the important issues for homeowners and buyers.

"It appears that regulators are attempting to adopt, by rule, a portion of what was contained in an earlier bill (Ross-Murphy)," says Trey Goldman, Florida Realtors® legislative counsel in the Office of Public Policy. "Under this proposal, banks must recognize and accept private flood coverage. But the bill's 'continuous coverage' language is just as important to homeowners, and the proposed regulations really don't address that. Without continuous coverage, policyholders who leave the NFIP and later come back could be subject to a full risk rate instead of their previous subsidized rate."

Under the FDIC/Comptroller proposal, lenders would have to accept private flood insurance policies if they offer coverage at least as comprehensive as NFIP. Lenders would also have an option to accept private flood insurance policies that don't offer as much coverage as NFIP, which the insurance industry and others want.

Still, any increase in private policy acceptance by lenders offers a ray of hope for homeowners and buyers, in part because a private policy often costs less.

"This ruling has the potential to open up the private insurance market," Michael Barry, a spokesman at the industry-funded Insurance Information Institute told The Wall Street Journal.

Federal law doesn't generally recognize private flood policies. Owners who leave NFIP and return – perhaps because their new cheaper coverage suddenly becomes more expensive later – can lose their grandfathered status under "continuous coverage" if they return to NFIP. If that happens, they often find themselves stuck with two bad choices: Stick with their current private policy that now has a higher premium or return to NFIP and also pay a higher premium because their coverage is no longer subsidized.

Another problem: Some lenders will accept private flood insurance coverage but some do not. For the latter, a homebuyer only has two choices – take out NFIP coverage or find another lender.

Ideally, Congress will address the "continuous coverage" risk when it updates NFIP, which now expires on May 31, 2019.

Source: The Wall Street Journal, Lalita Clozel