The push-and-pull efforts in a battle for sustainability put climate change at the forefront of discussions among people, industries and governments across the globe — and the housing market is no different.
The mortgage market is experiencing effects of the war on climate change as discussions dictate trends from where consumers want to buy to the type of financing they're using. With that in mind, here's a look at some ways climate change is affecting the housing market.
Consumers reluctant to buy in certain cities
Consumers in Miami, San Jose, Calif., and Los Angeles are among those most likely to anticipate being personally affected by climate change, while those in St. Louis, Detroit and Philadelphia are among the least likely.
Millennials are the most conscious of climate change among all generations. And because they comprise the largest cohort of potential homebuyers, it allows them to dictate purchase demand shifts to and from certain areas.
Homebuilding goes green
One-third of homebuilders said green building was a significant share of their overall activity, with the number expected to climb to at least half by 2022, according to NAHB. National energy codes are also developed and published on a three-year cycle to help foster cost and energy efficiency, according to the organization.
PACE loans come into play
PACE loans helped finance $660 million in sustainable improvements between 2016 and 2018, compared to only $208 million over the prior six years, according to nonprofit PACENation. The PACE model can also help homeowners pay for energy modifications like solar paneling.
Rising sea levels create more risk
In the next 30 years, an estimated 802,555 homes worth $450 billion reside under the risk of flooding, according to a joint study by Zillow and Climate Central. Pollution levels from greenhouse gas build-up could cause chronic ocean flooding by 2050 and subsequent mortgage distress.
Such threats continue to spark an ongoing debate over the
Industry reducing carbon footprint
In another example, Citibank vows to be powered solely via renewable energy by next year, and is investing $100 billion in a 10-year commitment toward sustainable growth.