A new study conducted by Freddie Mac found that homes that were HERS rated sold on an average 2.7% more than comparable unrated homes. In addition, homes that received lower HERS Index Scores sold for 3 – 5% more than homes with higher HERS Index Scores. The study also found that buyers of HERS rated homes also have more desirable mortgage profiles.
The study “Energy Efficiency: Value Added to Properties & Loan Performance” looked at homes rated under RESNET’s Home Energy Rating System (HERS) between 2013 and 2017.
The analysis of this data concluded:
- From the property value analysis, HERS rated homes are sold for, on average, 2.7% more than comparable unrated homes.
- Homes with lower HERS Index Scores are sold for 3-5% more than homes with higher HERS Index Scores.
- From an underwriting perspective, there are notable differences between HERS rated and unrated homes.
RESNET-rated homes have lower delinquency rates than unrated homes, both in terms of becoming ever 60 days and over 90 days delinquent. Homes with lower HERS Index Scores had even lower delinquency rates. Homes with lower HERS Index Scores also had better mortgage profiles in general: owners with higher average credit scores (FICO), lower Loan To Values (LTV) ratios at origination, higher origination unpaid principal balances (UPB), higher owner incomes, and higher neighborhood incomes at the census tract level. The lower delinquency rates remain for HERS rated versus unrated homes even for homeowners with higher debt-to-income ratios of 45% or more. The study was not able to conclude, however, whether the HERS Index Scores were responsible for the loan performance over the better mortgage profiles of those who bought HERS rated homes.
The conclusion of Freddie Mac’s analysis is good news for builders, buyers and sellers of energy-efficient HERS rated homes. Not only did HERS rated homes sell for an average of 2.7% more than comparable unrated homes, but better-rated homes sold for more than lesser-rated homes—meaning homes with greater energy efficiency are being valued more.
Latest News & Upcoming Events
Right University RSU Residential 2-Day Training Presented by: MiTek Wrightsoft February 25th and 26th 8:00 AM to 5:00 PM Join us for a 2-day, in-person training program designed to teach HVAC Contractors how to use Right-Suite® Universal software for load...
The federal 45L tax credit provides builders a $2,000 tax credit for building and selling energy-efficient homes. The credit had expired on December 31, 2017.As part of the last-minute Congressional – White House deal on keeping the government running, Congress has...
According to RESNET, as they interviewed builders for their HERS-spotlight each month, they found that featuring the use of the HERS Index Score by comparing it to a car’s MPG, helped consumers better understand the energy costs of a home. This allows the home buyer...
Interpretations No. 301-2014-018 and No. 301-2019-002 Ventilation Run Time go into effect on May 10, 2020 The interpretations state: Where Dwelling-Unit Mechanical Ventilation Systems are specified but at the time of rater inspection lack controls to provide...
Latest News & Upcoming Events Upcoming Events Nov 2019 Lunch and Learn Commercial IECC COMcheck Review – Envelopes, Mechanical, Lighting Offered to builders, developers, building officials, architects, engineers, HVAC professionals and all subcontractors working...
Interpretation MINHERS 2019-004 Conflicts of Standard 301 with RESNET Standards of Practice: The Interpretation Request (IR) sought clarification of whether Standard ANSI/RESNET/ICC 301-xxxx supersedes the RESNET Standards of Practice when statements or...
Greenbuild 2019 will take place in Atlanta, Georgia. Greenbuild offers a forum for the green building community to unite, change lives, revolutionize business and address pressing issues. Attend Greenbuild to hear from leaders on their vision about the future of green building, learn about current research and best practices, connect with sustainability experts, and see innovative technologies and products to take your projects to the next level. More Details
The RESNET Building Performance Conference provides a diverse and dynamic venue where you can obtain usable solutions in an evolving industry. Get up to date on strategic solutions for you and your business, network with like-minded professionals, and take home fresh information and for the home performance industry. More Details