The Importance Of An Energy Efficient Home

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June 01, 2016

Energy efficiency is no longer an aspect of a home that is completely ignored or forgotten about like in the past, but it isn’t of primary concern to many homeowners or sellers, either. Part of the problem is that you can’t see an energy efficiency; it isn’t tangible. But just because it isn’t tangible doesn’t mean it can’t have very real benefits for homeowners who make it a primary concern.

For example, mortgages are beginning to value energy efficiency. The FHA announced in the fall of 2015 that its borrowers can qualify for a “stretch ratio” of 2 percent if the home meets a six or higher on U.S. Department of Energy’s Home Energy Score, Redfin reports. This means, according to the DOE, that a homebuyer with a $75,000 income who currently qualifies for a monthly mortgage payment of $1,938 per month can borrow an extra $125 per month for a more energy efficient home. If that is financed with a 30-year mortgage at today’s rates, that means the homebuyer can now qualify for a house valued at approximately $26,500 more than a less efficient house.

Additionally, across the country, 90 percent of homes are under insulated. That is a huge number when considering insulation is one of the best ways to improve a home’s energy efficiency. A better insulated home leads to more efficient heating and cooling and reduced costs but it can also help reduce pollutants and improve air quality.

Properly insulating a home, or more specifically, adding fiberglass attic insulation to a home, provides the highest return on investment for homeowners of any home improvement project. At 117 percent, it was the only project that had an average national return of more than 100 percent. The average cost and return at resale for 30 of the other top home improvement projects was only 64.4 percent.

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