Kay Monigold, Author at Avenue Mortgage, LLC

You Ask, We Answer: Should I Consider a Warranty when Buying a New Home? Are you buying a new home? If so, you’ve likely pondered whether or not you should invest in a warranty to protect your investment. In today’s blog post we’ll briefly explore home warranties including some of the pros and cons of buying one and how they differ from homeowner’s insurance.

The Benefits of Buying a Home Warranty

Home warranties are an excellent solution if you’re buying a brand new home which has a lot of new appliances and fixtures inside of it, or if you’re not really the “do it yourself” type and would prefer to make a service call if something inside of your home breaks down.

For example, imagine that you have a home warranty that covers your central air conditioning system and one day it stops working. You simply call the warranty provider to book a service call and as long as the problem falls within the scope of your warranty the repairs are completed without any additional cost to you.

How a Home Warranty Differs from Homeowner’s Insurance

Home warranties and homeowner’s insurance are vastly different but work together to protect your investment. Insurance policies cover your home against unexpected damage – fires, crime, wind storms, water damage and more, depending on your policy. A home warranty tends to cover items inside of the home – the furnace, the plumbing, electrical wiring and appliances – and will provide you with discounts on repairs or replacement should the covered items break down or otherwise stop working.

Cost and Other Home Warranty Downsides

Of course, there are a few downsides to buying a home warranty. You’ll need to pay the up-front purchase cost of the warranty unless you’re buying a brand new home in which the warranty is included. You’ll also find that warranties generally won’t cover a lack of maintenance due to the previous homeowner, which can be a bit of an issue if something breaks down and you find out it’s not going to be covered. Finally you may find that any necessary repairs are actually less costly than the warranty itself.

CaseShiller Home Prices Price Growth Slows in September According to the Case-Shiller National Home Price Index, annual home price growth slipped to a seasonally-adjusted rate of 4.80 percent in September. This was 0.30 percent lower than August’s year-over-year reading of 5.10 percent.

Cities posting the highest year-over-year gains in home prices were Miami, Florida 10.30 percent, Las Vegas, NV with a gain of 9.10 percent, San Francisco, California posted a gain of 7.90 percent, Dallas home prices gained 7.40 percent and home prices increased by 6.70 percent in Portland, Oregon.

David M. Blitzer, chairman of the S&P Dow Jones Index Committee, said that Florida and the Southeastern region showed sustained strength. Citing gains in builder confidence and housing starts and pre-crisis levels for foreclosures and mortgage defaults, Mr. Blitzer said that the outlook for housing in 2015 should be “stable to slightly better.”

Analysts said that higher inventories of available homes had slowed home price growth. Cooling home prices allow more buyers into the market, which creates a better balance between buyers and sellers. Rapidly increasing home prices in late 2013 through early 2014 forced buyers onto the sidelines as investors and cash buyers drove home prices higher and raised demand for available homes.

Cities Post Incremental Month-to-Month Gains

Case-Shiller’s 10-and 20-City Home Price Indices were 15 and 17 percent below their mid-2006 peaks with 18 of 20 cities tracked showing slower growth in September than in August. Top month-to-month gains were incremental, with Miami, Florida and Charlotte, North Carolina gaining 0.60 percent, Las Vegas, Nevada gained 0.40 percent and Dallas, Texas gained 0.30 percent. Denver, Colorado, Tampa, Florida and Portland, Oregon posted month-to-month gains of 0.20 percent.

Cities posting no month-to-month gain included Los Angeles, California and New York City.

The steepest decline in month-to-month home prices was seen in Washington, D.C. at -0.40 percent., followed by Atlanta, Georgia at -0.30 percent San Francisco, California, Atlanta, Georgia, Chicago, Illinois, Detroit, Michigan and Seattle Washington posted month-to-month declines in home prices of -0.20 percent. San Diego, California and Boston, Massachusetts posted declines in month-to-month home prices of -0.10 percent.

FHFA House Price Index Unchanged in September

The Federal Housing Finance Administration posted no gain on its month-to-month reading for September, although analysts had expected a gain of 0.40 percent from August to September. Year-over-year, FHFA reported a 4.50 percent gain in home prices between the third quarter of 2013 and the same period in 2014.

On a positive note, Seasonally-adjusted home prices for purchase-only transactions rose in 40 of 50 states during the third quarter of 2014. The top five states posting the highest annual home price gains were Nevada, Hawaii, California, North Dakota and Florida.

You Ask, We Answer: Should I Consider a Warranty when Buying a New Home?

Case-Shiller Home Prices: Price Growth Slows in September

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