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Zillow recently introduced climate risk scores to its home listings, bringing increased attention to how environmental changes may affect real estate, including homes in Richmond, Virginia. 

This addition follows similar moves from Realtor.com, which integrated weather-related risk factors earlier this year, acknowledging that extreme weather events, often linked to climate change, are becoming a significant consideration for buyers. 

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According to a Zillow survey, climate risk now factors into the decisions of 80% of homebuyers, and a recent report by Realtor.com found that nearly 45% of U.S. homes face moderate to extreme damage risk from environmental threats.

For Richmond homes, climate risk primarily stems from high temperatures and high winds, with First Street—Zillow’s climate risk data partner—assigning most Richmond properties a score of 7 or 8 out of 10 for extreme heat risk. 

This assessment is based on projections of days with “feels-like” temperatures reaching 107 degrees Fahrenheit or higher. Richmond experienced seven such days this year alone, but First Street anticipates a 129% increase in these extreme-heat days over the next 30 years. 

Extreme heat can challenge homes by overloading HVAC systems and potentially damaging roofs, patios, and retaining walls. Additionally, very high temperatures may influence not only the durability of homes but also long-term maintenance costs, as First Street points out.

Richmond homes also show notable vulnerability to high winds, with First Street giving these properties a score of 6 out of 10. High wind events in the area are commonly driven by hurricanes and tropical storms, which generate wind speeds of 51 miles per hour or more. 

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According to projections, most Richmond homes might experience severe windstorms over the next three decades—a sharp increase from the current risk of just 1%. Local structural challenges such windstorms pose emphasize the importance of preparing homes against this intensifying threat.

Homes in certain flood-prone neighborhoods like Shockoe Bottom, Virginia, face a significantly higher flood risk. Shockoe Bottom’s vulnerability stems from its low elevation and proximity to the James River, making it prone to rising waters during intense storms or heavy rainfall. 

Despite this, flood insurance coverage in Virginia remains low—around 3% of homes statewide carry this type of insurance, although recent flooding from Hurricane Helene damaged about 126,000 homes according to a state report.

Zillow’s new climate risk feature isn’t just about identifying potential hazards; it’s also helping homeowners and buyers plan for rising insurance costs. Over the past few years, premiums have increased significantly, especially in areas vulnerable to climate risks. 

According to research by the Wharton School, the cost of homeowners insurance has risen by 33% between 2020 and 2023 in high-risk areas, leaving many buyers to rethink their budgets.

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New industry data suggests that more than half of prospective homebuyers have set 5.5% as their target mortgage rate, but current market conditions show a wide gap between expectations and reality.

A survey cited by the National Association of Realtors (NAR) on Friday found 56% of potential buyers are holding out for rates between 5.5% and 5.75% before making a purchase. Current rates, however, stand at 6.54% for a 30-year fixed mortgage, according to Freddie Mac, marking the fourth consecutive week of increases.

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The divergence between buyer expectations and market reality comes as existing home sales hit their lowest point since October 2010. According to NAR data, sales dropped to an annual rate of 3.84 million units in September.

The report says that rising interest rates remain the chief concern for buyers, with 58% citing them as their biggest fear. Home price increases ranked second at 49%, followed by inflation and diminishing savings at 40%.

“The continued strength in the economy drove mortgage rates higher once again this week,” said Sam Khater, Freddie Mac’s chief economist. “Over the last few years, there has been tension between a downbeat economic narrative and incoming economic data that is stronger than the narrative.”

The financial strain on potential buyers remains high. Recent Bankrate data shows 34% of workers living paycheck to paycheck. Meanwhile, the median existing-home price reached $404,500 in September, nearly 50% above September 2019 levels, outpacing income growth by 25% during the same period.

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At current rates, a $400,000 home purchase with 20% down translates to a $2,031 monthly mortgage payment, according to Jessica Lautz, NAR’s deputy chief economist. A 10% down payment pushes that figure to $2,285.

First-time buyers face challenges. Their market share fell to 26% in September, among the lowest levels on record. Loan officers report increased inquiries about down payment assistance and lower down payment programs as buyers seek ways to manage higher rates and prices.

Market forecasts suggest continued challenges ahead. Fannie Mae and the Mortgage Bankers Association project 30-year fixed rates to average around 6.2% by late this year, outpacing buyer preferences.

Limited inventory continues to pressure the market, with available homes down 20% compared to five years ago. “With mortgage rates back above 6.5% this month – and unlikely to drop below 6% this year – home prices will likely continue their consistent climb until more inventory comes onto the market in the spring,” Redfin senior economist Sheharyar Bokhari said.

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A divide is emerging between young homeowners and their renting peers, according to new survey data from Redfin.

Nearly 70% of Millennial and Gen Z homeowners report being better off financially compared to four years ago, while only 52% of renters in the same age groups have seen similar improvements.

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The findings highlight a growing economic disparity tied directly to homeownership among younger Americans. The gap is more pronounced compared to older generations, where the financial differences between owners and renters are much smaller.

“Economic inequality is on the rise between young people who have been able to break into homeownership and young people who haven’t,” Chen Zhao, Redfin’s Economics Research Lead, was quoted in the report.

The timing of home purchases has proved crucial, according to the real estate brokerage. Many young buyers who entered the market during the pandemic’s low interest rates have since built substantial equity as home values surged. 

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Those who missed that window now face barriers to entry, with mortgage rates more than double their pandemic lows and home prices near record highs.

The contrast in financial outcomes is clear — only 18% of Millennial and Gen Z homeowners report being worse off compared to four years ago, while 26% of their renting counterparts have seen their finances deteriorate.

The impact extends beyond personal finances into political priorities. A related Redfin survey found housing affordability weighs heavily on renters’ minds heading into the presidential election, with 32% listing it among their top three issues compared to 17% of homeowners.

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Baby Boomers are an outlier in the data, with both owners and renters more likely to report declining financial situations. About 38% of Boomer homeowners and 40% of renters say they’re worse off than four years ago, potentially reflecting the challenges of living on fixed incomes during a period of high inflation.

The findings come from a Redfin-commissioned survey conducted by Ipsos in September, sampling 1,802 U.S. residents aged 18-65. The study defined Gen Z as ages 18-27, Millennials as 28-43, Gen X as 44-59, and Baby Boomers as 60-65.

While rent growth has recently slowed, rents remain about 20% above pre-pandemic levels. The continued pressure on renters, combined with high costs for necessities like groceries, suggests the financial gap between young owners and renters may continue to widen.

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