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73 October 2024 J O U R N A L ARE U.S. HOMES READY FOR EXTREME WEATHER? W ith Hurricane Helene, the eighth named storm of the season, having made landfall as a Category 4 hurricane in Florida's Big Bend region, cleanup from this devastating storm is underway, as people piece their lives back together after Mother Nature wreaked havoc throughout the Southeast- ern Unite States [Editor's note: as of this issue going to press, Hurrican Milton is beginning to make landfall as a Category 5 storm.] The death toll currently stands at 180-plus from Hurricane Helene, and CoreLogic announced initial residential and commercial storm surge and wind loss estimates for Hurricane Helene for insured residential and commercial properties in Florida and Georgia are expected to be between $3 and $5 billion. In light of the damage caused by Helene, a new report from Leaf Home and Morning Consult reveals the vulnerabil- ity of American homes against extreme weather and the financial strain placed upon homeowners. Many find their insurance coverage insufficient, leaving them financially unprepared for the cost of repairs, and while 66% of U.S. homes have experienced weather-related damage, only one-third of homeowners have made im- provements to safeguard their properties. Key Report Highlights "Homes are more vulnerable than ever to the damaging effects of extreme weather, and the financial consequences can be severe. The increasing unpredictability of weather is a wakeup call for homeowners to protect their homes and wallets," said Rocco Mango, Interim CEO of Leaf Home. "By investing in essential upgrades, homeowners can safeguard their property while increasing home value in the long term." Key findings of the study, "2024 Extreme Weather Report: Homeowner Per- ceptions and the Impact on Homes," include: • Some 60% of homeowners faced significant out-of-pocket expenses for extreme weather damage, with many paying $5,000 or more. • Roughly 46% of homeowners were only somewhat or not at all prepared to cover the costs of damage. • Major damage (over $15,000) resulted in payouts of just 14%. • An estimated 62% of homeowners fear rising insurance costs due to extreme weather and nearly a third have experienced premium hikes. • While 51% of homeowners have shown increased interest in weather-related home improvements, only one-third have acted. • Interior paint jobs and flooring updates are homeowners' top priorities. • High costs and prioritizing cosmetic updates are the main barriers to weather-proofing homes. • Approximately 73% of homebuyers are willing to pay more for weather- proofed homes. • Some 53% of sellers increased their home's value by making weather- related improvements. WHERE ARE HOME PRICES HEADING OVER THE NEXT 24 MONTHS? T he latest Fannie Mae Home Price Expectations Survey (HPES), produced in partnership with Pulsenomics, examining Q3 2024 data, has found that following home price growth of 6.0% in 2023, an annual nation- al home price growth of 4.7% is forecast for the remainder of 2024, followed by growth of 3.1% in 2025. The panel's latest estimates of nation- al home price growth are higher than last quarter's expectations of 4.3% for 2024 but lower than the previous quarter's expectations of 3.2% for 2025. Terry Loebs, Founder of Pulsenom- ics, said: "Despite robust home value growth in the first half of 2024, our panelists anticipate a slowdown in price appreciation for the remainder of the year and beyond. While lower interest rates could incentivize some home- owners to sell, the deep-rooted housing supply and affordability crises will likely persist, even with a more accommodative monetary policy." Fannie Mae's HPES polls more than 100 experts across the housing and mort- gage industry and academia for forecasts of national home price percentage changes in each of the coming five cal- endar years, as measured by the Fannie Mae Home Price Index (FNM-HPI). Strength in Home Price Growth "Recent measures of home price growth, including our own, have contin- ued to come in stronger than previously expected, as reflected by the 100-plus HPES panelists who, on average, once again modestly upgraded their home price outlook for 2024," said Mark Palim, Fannie Mae VP and Deputy Chief Economist. "Strong home price appreciation has persisted despite purchase affordability remaining stretched for the vast major- ity of consumers, a dynamic that is still primarily a function of inadequate supply. Our panelists overwhelmingly agreed that there is a fundamental lack of housing in the United States relative to underlying demographic factors—and, on average, believe the nation to be short approxi- mately 2.8 million homes. We've previous- ly estimated the shortfall to be more than four million. The panelists also shared that they think speeding up construction permitting processes, increasing density around transit corridors, and allowing more 'missing middle'-type housing are the local and state policy reforms likeliest to increase housing production. However, most remain apprehensive about the near- term prospects of these sorts of reforms being enacted broadly enough to have a meaningful effect on supply and housing affordability." Gauging a Cyclical Housing Market While affordability issues still plague