The Housing Scene

Most people know that 2022's Inflation Reduction Act (IRA) was passed to create jobs, catch tax cheats, lower drug prices and rebuild the nation’s basic infrastructure. But what’s frequently missed is that the law also helps homeowners make energy-efficient repairs and upgrades to their places.

The help comes in the form of federal tax credits: They cover a percentage of the cost to, say, change out your heat pump, upgrade your old windows and doors, or even have an expert perform an energy audit on your house.

The law also authorized the Department of Energy to provide millions to state governments for their own energy assistance programs. Combine these with other state, utility and manufacturer tax credit and rebate programs, and your improvements could pay for themselves in short order.

“In my almost 20 years, I’ve never seen the opportunity (to make energy improvements) so lucrative. This is the best it's ever going to get,” Melanie Paskevich of NeighborWorks of Western Vermont told me. (NeighborWorks is a community-development nonprofit with chapters all over the country.)

The DOE money, which is administered through state energy offices and local nonprofits, tends to go first -- and fast.

“We have enough folks on our waiting list to spend down our allocation every year,” said Joyce Parton of CHN Housing Partners, a NeighborWorks affiliate in Cuyahoga County, Ohio.

The problem is most folks don’t know the extent of what is available. According to the White House, 3.4 million homeowners claimed $8.4 billion in federal tax credits to lower their energy costs in 2023. But that’s only a drop in the bucket of the billions set aside for energy upgrades.

According to a survey by NeighborWorks, half of the 2,500 people polled had no clue about the financial incentives available to them. And almost that many were unfamiliar with the concept of an energy audit, in which a professional analyzes your home's energy flow to pinpoint areas of waste and recommend cost-effective improvements.

“Families could literally be letting money sweep out their windows and doors,” says NeighborWorks spokesman Douglas Robinson.

Adds Paskevich: “People should be banging on our doors” to take advantage of what’s available.

Unlike DOE’s assistance programs, there are no income limitations under the IRA’s tax credit initiative. One of the only qualifications is that the house must be your principal residence. And it usually must be an existing property, but in some instances, a new build also qualifies.

Tax credits are available for 30% of the cost of an energy upgrade, up to $2,000, in the tax year in which it was made. And they can be combined with credits of up to $1,200 for other qualified improvements in the same year for a total credit of $3,200.

You can claim 30% of the cost, up to $1,200, of energy-efficient windows, doors, even skylights and weather stripping. If you invest in renewable energy -- solar, wind, geothermal, fuel cell or battery storage technology -- you can qualify for a clean energy tax credit of 30% of the cost every year until 2032. The credit drops to 26% in 2033 and 22% in 2034.

Except for fuel cells, you may claim the clean energy credit for the above improvements on a second home, too, as long as you live in it part-time and do not rent it out. And you can carry forward any excess credit to reduce your tax bill in subsequent years. Interest on loans to pay for these upgrades cannot be claimed, nor can loan origination fees.

To max out your benefits, though, you may want to undertake your upgrades over several years, starting with an audit to identify the most beneficial improvements.

If you intend to change out your HVAC system, for example, it might be best to add attic insulation first. That way, you can claim 30% of the audit’s cost, up to $150, plus 30% of the cost of the insulation, up to $1,200. Next, you can buy an air-source heat pump and claim 30% of that cost, up to an additional $2,000.

But you aren’t done yet. Most states and public utilities offer rebate programs that you can use on top of the federal initiatives. Even some counties, cities and manufacturers have programs.

Rebate programs vary among states and product manufacturers, and they can differ depending on your income. You’ll have to do some work to find them, but the savings could be significant.

For instance, besides the Fed’s tax credit, most states offer substantial incentives for adding solar panels to your home. Many installation companies also offer zero-down options and net metering, a utility rate program that allows your power company to buy unused solar energy from your panels.

Under its Clean Energy Advantage Loan Program, Maryland provides 24 months of interest-free loans to residents purchasing solar panels by “buying down” the interest rate. Minnesota exempts from its sales tax the cost of purchasing solar energy equipment. And Missouri does the same for qualifying energy-efficient appliances, including dishwashers, refrigerators, water heaters, furnaces and air conditioners (up to $1,500 per appliance, when purchased during a one-week period).

Electric companies also offer incentives ranging from free energy audits to rebates for common household appliances, including smart thermostats and heating and cooling equipment.

Would-be sellers who have taken their houses off the market should be ready for an all-out blitz this spring from agents looking to relist their places.

There are all kinds of reasons to stop trying to sell your house: Perhaps there was very little interest, you couldn’t get the price you wanted or you were dissatisfied with your agent.

Whatever the reason, tens of thousands of listings expire each year, and agents view them as easy pickings. Denise Lones, an agent and industry coach, wrote in a blog post that working with expired listings is like “picking nice juicy ripe grapes off a vine.”

For one thing, these listings are easy to find. All agents have to do is comb their local multiple listing services for properties that haven’t been re-upped.

It's a convenient way to drum up business when needed, wrote Lones: “It is an easy faucet to turn on and off. When you need business, turn it on. When you have too much, turn it off.”

Sometimes, of course, sellers have had enough and don’t want to put their houses back on the market. But that won’t stop some agents from trying. Whether it be snail mail, email, the phone or in person, they'll try to connect to show these sellers why the next time around will be different.

If you’ve been inundated with emails, texts and phone solicitations after applying for a mortgage, here’s why: Your lender’s competitors regularly purchase customer information from the credit agencies lenders use.

The practice is known as “trigger leads” because your application triggers a barrage of rival offers. It is frowned upon by many in the mortgage community, and legislation to put an end to it was working its way through Congress last fall. Law or not, supporters have vowed to keep fighting.

“This must stop,” wrote Bob Broeksmit, president and CEO of the Mortgage Bankers Association, in a statement on the organization's website. Not only can the practice cause emotional strain on consumers, but it is also sometimes fraudulent. Worse, perhaps, it serves to undermine the trust that borrowers place in their loan officers and brokers.

“The mortgage industry depends on referrals and repeat business, which we have always enjoyed,” says a Mississippi lender in the MBA statement. “This is nearly a bygone notion thanks to trigger leads.”

Added an Oregon colleague: “I pride myself in taking great care of my customers. Trigger leads are affecting my borrowers and therefore my reputation.”

Despite new buildings popping up all over the country, finding a new apartment was a daunting task for many last year.

According to RentCafe, nearly two-thirds of renters renewed their leases in 2024, creating a nationwide squeeze. For every open apartment, nine eager renters were waiting in line to snap it up. When a unit became available, it was typically filled within 40 days.

There are few certainties about the tariffs the Trump White House has attempted to implement, but during his campaign, the president pledged to place tariffs ranging from 10% to 20% on imported goods, with a 60% tariff on imports from China. Such fees would have a massive impact on the homebuilding industry.

According to the National Association of Home Builders, in 2023, around $184 billion of goods were used to construct both new single- and multi-family houses. Of that, $13 billion worth -- about 7% -- was imported.

Commodities from China accounted for 27% of the imported total, while products from Mexico and Canada, two other countries targeted by the new president, accounted for 11% and 8%, respectively.

Though Trump disagrees, most economists maintain that a tariff is basically a tax on an imported good, meaning the company or person who imports an item pays an additional tax for doing so. An example from an NAHB press release: "Say a business in the United States needed to purchase a $100 worth of screws from China. With a 60% tariff, the business would then need to pay an additional $60 to the U.S. government to receive the screws. The exporter in China would still receive the $100 from the business and not pay the added tariff costs.

"The tariff cost falls on the importer, who would absorb the higher costs through lower profit margins or raising their own prices for consumers," explains NAHB.

By NAHB’s estimates, a 10% overall tariff with a 60% tariff on goods from China "would result in a $3.2 billion increase in the cost of imported building materials used in residential construction."

Breaking it down further, household appliances would get the largest cost hike, since 54% of those imported come from China. Some 70% of sawmill and wood product imports, which are already subject to tariffs, come from Canada, and 71% of lime and gypsum products come from Mexico.

Beware of “phantom inventory,” which makes it look as though the market is ripe with houses for sale. In fact, many properties are sitting stagnant because they are overpriced, making the market appear far healthier than it really is, says Glenn Phillips of Lake Homes Realty, a multi-state brokerage.

Odeta Kushi, deputy chief economist of First American Financial Corporation, agrees that more inventory doesn’t necessarily mean an increase in market activity.

“In some cases, higher active inventory levels may be the result of properties lingering unsold due to factors like overpricing, poor condition or decreased buyer demand," wrote Kushi in a blog post. "Indeed, rising active inventory may mean demand has cooled, and homes are taking longer to sell.”

Collectively, real estate agents don’t always have the greatest reputation. In Gallup Polls from recent years, agents' favorability ratings have been just above those of lawyers.

To be sure, some buyers and sellers do have bad experiences with their agents. Anything can go wrong in a real estate transaction: Maybe the seller didn't get their desired asking price, the sale took too long or some paperwork got messed up.

There's often some kind of hitch, but still, most agents are straight arrows who play by the book.

There are some, however, who don't always follow the National Association of Realtors’ Code of Ethics: an extensive document under which the business operates. If agents violate the code, they are subject to sanctions. If they do so often, they could be drummed out of the corps.

For instance: If you have signed a listing agreement or a buyer-broker contract with one agent, other agents should not be calling you and trying to snatch you away. It’s called poaching, and it's against the rules. Agents bad-mouthing their competitors is another code violation.

Some violations are also outright illegal. For instance, if an agent discriminates, that's likely a violation of the Fair Housing Act -- the law that protects buyers and renters from discrimination based on race, sex, religion, disability, national origin and other factors.

That’s pretty cut-and-dried: An agent can’t refuse to work with potential clients because of these factors. Further, agents can’t answer questions about the racial makeup of a neighborhood; if the would-be buyer is interested in that, they’ll have to research it on their own.

If your agent violates these rules, you should report it to the local Realtors group and maybe even to the Department of Housing and Urban Development.

Beyond discrimination, the code covers issues of fairness and strategy. For example, agents are not supposed to disclose information about their clients that may hinder them -- or help the other side. That’s why working with a so-called dual agent, who works for both the buyer and seller, is a dangerous proposition. Dual agents walk a fine line, and in the end, neither side gets the representation they deserve.

An example of what not to do: Sellers' agents shouldn’t reveal to buyers just how low their client will go price-wise. Nor should they disclose the reason for selling, or that the seller is in a hurry.

Another no-no: Agents cannot put their own interests -- or their commissions -- above the interests of their clients. They cannot misrepresent themselves or the properties they list. If a rookie agent falsely claims to have years of experience, or if they list a house as 3,000 square feet when it is only 2,500, those are violations.

Sometimes, a mistake is inadvertent, with the agent just repeating what they were told. But some agents fudge things intentionally and just hope they don't get caught. Such misrepresentations are a major cause of consumer complaints and legal disputes and, therefore, a key focus of regulatory efforts at the state level.

Another area where agents step over the line: giving legal advice. They’re not supposed to. The closest they should come is filling in the blanks of a listing agreement or sales contract. They often write addendums or add clauses, but that really should be left to the lawyers. If you have legal questions, obtain advice from an actual attorney.

Most real estate agents aren’t qualified to answer tax questions, either. Buyers and sellers should seek the advice of an accountant or tax professional if they have questions about the tax implications of their transaction.