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According to a survey conducted earlier this year by the National Association of Realtors®, about 75% of non-homeowners believe homeownership is part of their American Dream, while nine in 10 current homeowners said the same.

How do you feel about homeownership? What does it mean to you? Vote in our poll about homeownership.

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Do’s and Don’ts for First-Time Homebuyers

Homeownership is the bedrock of the American dream. For many people, owning their very own home is a major life ambition and motivator for how they lead their professional and personal lives. It can often seem like this goal is impossible to achieve considering the huge toll it takes on one’s bank account, but thankfully that is not the case.

To support long-term economic growth, the U.S government provides a great deal of support for homeowners. By decreasing the risks mortgage lenders take on, the government keeps interest rates low. As long as you educate yourself with helpful resources, you’ll be as equipped as the professionals when it comes to avoiding costly mistakes and taking the next step towards homeownership.

Now that it’s time to make the leap and buy a home, you’re most likely balancing your excitement with a great deal of jitters. You can breathe easy—we’ve got your concerns covered with our comprehensive Do’s and Don’ts for First-Time Homebuyers.

DON’T ONLY GET ONE RATE QUOTE

As exhilarating as it can be to hear your first mortgage offer, don’t make the all too common mistake of locking down your first offer. Even if your initial rate quote seems like a great option, there are various other factors to take into consideration such as closing costs and mortgage points. Mortgage interest rates vary based on the lender, so do yourself a favor and apply with numerous lenders. Debra Grog, an agent with Movoto Real Estate, has a great rule of thumb when choosing a mortgage, “When considering your price point, start with the amount of rent you are paying now, not necessarily what the bank/mortgage company says they will loan you.”

DO CHECK YOUR CREDIT SCORE TO ENSURE IT IS ACCURATE

Your credit score is quite possibly the most important determinant when it comes to being approved for a loan, as well as the first building block to secure a financial foundation for yourself. The first thing lenders will take a look at is your credit history and the greater your history is, the higher your chances are for acquiring a good interest rate. While achieving the highest credit score you’re capable of before applying for a mortgage is probably a given, often times checking for errors isn’t. Even the smallest glitch on your credit report could result in your interest rate skyrocketing, so this is certainly not a step to skim past. A great resource to use is Annual Credit Report, which is the only credit report website that is authorized by the federal government and good news—it’s free!

“When considering your price point, start with the amount of rent you are paying now, not necessarily what the bank/mortgage company says they will loan you.”
DON’T MAKE A DOWN PAYMENT TOO SMALL

You’ve probably heard people mention that you “have” to make a down payment of at least 20%, but today that is far from the truth. The National Association of REALTORS® conducted a study this past year showing that the median down payment for new home buyers was only 6%. While this percentage may not come as much of a shock when assuming what young homebuyers can afford, it may seem surprising that it is even possible to put down as little as 6%. Making a larger down payment is a completely viable option as long as you don’t entirely empty your savings or neglect factoring in additional expenses. Just because a loan program allows you to purchase a home with 0% down, that doesn’t mean it is the right financial choice for you. As Michael Nicholas, the director of U.S. Mortgage Sales and Service at BMO Harris Bank, says, “You don’t want to be house-rich and cash-poor—feeling comfortable and confident with the decision you make is the most important factor of all.”

DO LOOK INTO FIRST-TIME HOMEBUYER PROGRAMS

As we touched on earlier, there are dozens of programs created solely for first-time homebuyers just like you. There is no need to put your dream of homeownership on the backburner for decades while you save up every penny. Depending on where you’re located, there are an abundance of programs that offer low down payment loans, closing cost assistance, and reduced interest rates. States all over the country are proud to be offering these plans. In addition, these programs hike up home sales which improves the economy in the long run. There are also federal programs to consider, such as an FHA loan, which is a mortgage insured by the Federal Housing Administration that allows borrowers to make a down payment as little as 3.5%.

DON’T GO HOUSE HUNTING PRIOR TO GETTING A MORTGAGE

Although it seems like the most appealing and fun way to begin the homebuying process, shopping for a house before a mortgage is one of the biggest mistakes you can make. If you’re not clear on how much you can borrow, visiting properties will result in just that; a visit. To ensure you’re viewing homes that are in your price range, begin by reaching out to a mortgage professional and consider getting pre-approved for a loan. This will not only set you apart from other bidders, but give you ease when house hunting. Don’t tease yourself by jumping 10 steps ahead with a home that isn’t realistic for you.

DO CHECK THE QUALIFICATIONS OF YOUR HOME INSPECTOR

Once you reach the home inspection step, that means you’re on the cusp of closing on your new home! There are just a couple more measures to take before closing your mortgage. To ensure you save as much money as possible, finding the perfect home inspector is crucial. A home inspection isn’t just a second or third viewing. The inspection is your chance to take a good hard look at the building and note any defects. Double checking your home inspector’s credentials will help avoid surprise repairs later that you’ll have to pay out of pocket as opposed to the former owners.

By taking all of these commonly encountered mishaps and tips into account, you’ll cruise through the homebuying process with comfort and ease. You don’t have to pinch pennies well into the future in order to turn your dreams of homeownership into a reality, you just have to enlighten yourself on the steps of purchasing a home and make financially responsible decisions along the way.

Don’t keep telling yourself tomorrow, when you can change your life today.

Supply of Inventory in New York Increases

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The weather in New York in February, which has been impressively cold, rainy and snowy, has impacted the residential real estate market throughout large portions of the U.S. for February 2019 by stalling some buying and selling actions. Nevertheless, housing markets have proven to be resilient despite predictions of a tougher year for the industry.

New Listings were down 4.1 percent to 13,562. Pending Sales decreased 1.5 percent to 8,915. Inventory grew 0.7 percent to 60,966 units. Prices moved higher as the Median Sales Price was up 9.8 percent to $280,000.

Days on Market decreased 2.3 percent to 85 days. Months Supply of Inventory was up 3.8 percent to 5.5 months.

High Student Loan Debt Restricting First-Time Homebuyers

After years of paying rent, the dream of homeownership will not only start to become increasingly appealing but begin to actually seem approachable at a certain age. As income becomes more consistent, credit scores improve and a specific lifestyle becomes predominant, you may become ready for this step sooner than you originally thought. There is, however, one large issue which can prevent homeownership from becoming a reality for millions of people: high student debt.

When you’re overwhelmed with student debt, it may seem like homeownership is unattainable, but that is far from the truth. While high student loan debt will impact your mortgage approvals, there are dozens of ways to plan accordingly and improve your odds of getting approved for loans. With attentive planning, the right resources, and a deep breath, your dreams of homeownership will transform from fantasy to reality.

There is a reason that first-time homebuyers account for a smaller percentage of the housing market, and that reason is daunting student loan obligations. There are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt, and that’s only in the United States. According to personal finance website Make Lemonade, 2019 statistics show “The average student in the Class of 2017 has about $40,000 in student loan debt, compared with $37,172 in student loan debt for the Class of 2016.” This statistic has increased drastically from college seniors in 2009 who graduated with an average of $24,000 in student loan debt. Despite these steep numbers, millennials have still been the largest group of home buyers since 2013 at 36%, and 65% of these buyers were also first-time homebuyers.

“…your dreams of homeownership will transform from fantasy to reality.”

J.R. Duren, a personal finance expert, has one of these victory stories to share. With over $100,000 in debt, he and his wife were still able to purchase a home. Duren explains how an income-based replayment plan helped him pay off his combined loan burden. Another fellow victim to student loan debt, Dr. Goldie Winge, shares, “last year, I bought the house of my dreams despite having a medical school debt of over $120,000.” She was able to do so by keeping her credit excellent and having good financial reserves.

These numbers may seem alarming at first, but it’s the next step you take that determines whether your dream house will become your new home, or someone else’s. When applying for a mortgage, there are three central factors to focus on — your down payment, your credit score, and your debt-to-income ratio.

Bills to pay

The amount of money you’re able to put down on a home will directly determine which mortgages you are eligible for. It’s a universally known challenge to bulk up your savings when you’re busy picking away at your debt, especially hefty student debt. If the amount you’re able to use for a down payment is a bit shy of your goal, there are plenty of down-payment assistance programs to help you. Sonyma, State of NY Mortgage Agency, for example, offers a program called Achieving the Dream which provides low down payment mortgage financing for qualified low income first time homebuyers in New York on 1-4 family residences. The DC Housing Finance Agency, DCHFA, also has a similar program named DC Open Doors which offers competitive interest rates and lower mortgage insurance costs on first trust mortgages, as well as fully forgivable second trust loans, whether you’re buying your first or fifth home.

These competitive rates can result in a 0% down payment loan for homes in the District of Columbia. Randall Yates, founder and CEO of The Lenders Network recommends another great resource; the HUD website, in which you can browse homebuyer programs by state. Alternatively, there are federal loan programs such as an FHA loan, which is a friendly option even if you have student loans and could allow you to make a down payment as low as 3.5%. Be sure to take your time researching your array of options and you’ll be surprised at how much lower your down payment can be.

Coins

Your credit score is one of the first things financial institutions will take into account when deciding whether to approve your mortgage. You may be thinking uh oh…I haven’t checked my credit score in a while, or even wondering what is a credit score? Many are under the impression that if you have student loan debt, your credit score will suffer. This is fortunately not the case, and in fact, quite the contrary. Melinda Opperman, an expert with over 19 years of experience in the financial industry explains, “When managed properly, student loans can be advantageous in helping to build your credit history.” Using a variety of credit methods, such as credit cards, car payments, and even student loans, shows lenders that you are capable of handling different types of debt. As long as you’re not missing any payments, your credit score should stay rather stable. What you can do is focus on boosting your credit score. A few ways to do this are by simply paying your bills in full before or on the due date and managing your credit use, in other words try to use as little of your available credit as possible. Keep a close eye on your credit score in anticipation of the home buying process to ensure your score is optimized and up-to-date.

“When managed properly, student loans can be advantageous in helping to build your credit history.”

Lenders will also take a look at your DTI (debt-to-income) ratio, which shows the percentage of your monthly income required for debt repayment. Unfortunately, your student loan payments fall under your monthly debt umbrella. The good news is that you can successfully manage your DTI with some planning and strategy. As soon as you begin to repay your existing debt, whether it be a small amount or a large amount, your debt-to-income ratio will lower and you will potentially receive a better interest rate. If you’re having trouble making your monthly payments, consider refinancing your student loans. This will lower your interest rate and demonstrate to lenders that you’re well on your way to pay off your discouraging debt.

Many dive into the house hunting process prior to getting a mortgage, and then become disappointed when they aren’t approved by a lender and miss out on the perfect home. By getting pre-approved, you will know exactly how much you can afford and avoid setbacks. Getting pre-approved for a mortgage involves a lender evaluating your financial history and then putting together a letter illustrating how much of a loan you can qualify for. This shows your seriousness and motivation as a buyer, which bumps you ahead of other interested parties without this advantage. There are dozens of costs, some hidden, when it comes to purchasing a home and getting pre-approved from a lender will assist you in preparing for the cost requirements.

The American dream of homeownership isn’t impossible. It’s actually quite attainable with the right knowledge and careful planning. Don’t allow your student debt to slow you down and keep you from your lifelong aspiration of having a home to call your own.

Mid-Market Miami Home Sales Rise in February

Miami mid-market home sales and median prices for all properties increased in February, reflecting demand for local properties, particularly in certain price points, according to the MIAMI Association of REALTORS® and the Multiple Listing Service system.

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Brooklynites Consider Homeownership to Avoid Inconsistent Rent Hikes

While Brooklyn residents are celebrating the news of the L train remaining open after initially being told three years ago that the train would shut down access between Manhattan and Brooklyn entirely for fifteen months, they are quickly realizing the result is less triumphant: rising rent prices.

The reopening of the L train, announced by Governor Cuomo as of January 3rd, has sparked huge changes in rental prices in and around Bushwick, but it has also stirred concern for those living anywhere in the metropolitan area of NYC. With the price of public transportation also increasing and the chronic maintenance issues in certain areas, renters in the most expensive cities in the U.S. like San Francisco, Seattle, and New York City are beginning to reconsider homeownership as opposed to renting. They are quickly grasping that not only can a mortgage be even cheaper than rent, but it can also help one to start building equity.

Think about every tiny thing you have to reach out to your landlord to fix. Does that apartment improvement lower your rent? No. But when you put money into your own residence, it will actually come back to you as you increase the value of your home.

L Train

Anyone who lives in New York, or any urban city in America for that matter, understands how crucial public transportation is. Not only does it directly affect the length of your daily commute, but it also plays a huge factor when apartment or house hunting in terms of both your wallet and convenience. The executive director of an advocacy group called the Riders Alliance, John Raskin, expresses his blunt concern on the issue, “The subway system is at the breaking point, and honestly, subway riders are too.”

“… not only can a mortgage be even cheaper than rent, but it can also help one to start building equity.”

The long-awaited “L-pocalypse” has been looming over Brooklynites for the past three years. Amongst sporadic MTA shutdowns and incessant under performance, both individuals and families residing in Bushwick and East Williamsburg have considered, or actively made steps toward, uprooting their entire lives. Citizens have been exploring new job opportunities and new boroughs to better accommodate their schedule and avoid spending half of their time on a train or bus, only to find that within a matter of weeks, the entire shutdown plan was scrapped.

Before Governor Andrew M. Cuomo’s unexpected proposal changes, neighborhoods that fell along the L train line became more affordable for renters. Now that the train will still be operating during typical business hours – you guessed it – rent prices are climbing back up.

Brooklyn

Local bars and restaurants suffered once the train shut down in the early evening, losing the majority of their usual business as a result. Landlords also suffered from offering incentives and concessions to renters that they now regret, such as reduced monthly rates. Grant Long, an economist at StreetEasy, explains that renters who locked down leases in 2018 got an incredible deal. Long estimates, “…renters signing new leases in these units in 2018 saved a minimum of $6.4 million compared to what they’d have paid if there were no shutdown and rents had remained flat.” Rental prices in said area have dropped 1.5 percent since the shutdown was first proposed in 2016, while rental prices in other areas have gone up 3.3 percent.

“The dream of homeownership isn’t as out of reach as you may imagine.”

Inconvenience and frustration aside, residents who bit their tongues and waited for the shutdown to actually take place are now seeing the quick jump in rental prices. Sadly, with convenience comes higher expenses.

So…what can residents do?

Considering these rental prices took a drastic turn in a matter of days, renters are hesitant to rely on rent breaks from brokers and landlords when choosing an apartment, especially while the market is just as confused as residents. The repairment plans for the Canarsie tunnel between Manhattan and Brooklyn quickly altered from being closed for 15 months to just temporary night and weekend closures. With how unpredictable rental prices are in the (recently) more affordable neighborhoods, many residents are realizing that homeownership may be a more viable option.

For those living in a large city, pursuing the dream of homeownership may sound intimidating. Most people are aware it is a huge financial investment, but the initial down payments are tough to comfortably dish out and the commitment can make one weary. Although, if you’re confident you’ll be sticking around the area for the next five years and you’re sick of the sporadic rent hikes, homeownership could be the right choice for you.

Brooklyn

The American dream of homeownership isn’t as out of reach as you may imagine. Owning your home isn’t only a rewarding decision because you’ll have control over your surroundings, but between tax benefits, first time homebuyers programs in New York, and consistent monthly payments, it could be an extremely beneficial financial investment. We all know how jarring rental applications can be when we skim past the required annual income, so perhaps it’s time to consider putting that money towards your future. After all, homeownership is the cornerstone of long-term investing.


Interested in learning more about the journey to homeownership? Check out our newly updated guide for First-Time Homebuyers.

The 2017 “Sixth Penny Tax” Projects in Laramie County

Did you know that state law allows counties, in cooperation with cities and towns, to fund specific projects through a voluntary sales tax? It’s called “The Sixth Penny Tax.”

There are nine projects on the ballot this year.  For projects that are approved by voters, a “sixth penny” sales tax will be added to the purchases you make. When the specific amount is collected, the tax stops.

Here is more information on this year’s proposed projects:

Court Expansion (Prop. 1)

The City of Cheyenne seeks $9 million for the construction of a new Municipal Court facility to be located at 2101 O’Neil Ave. as an addition or remodel to the City of Cheyenne’s current government building. The facility would house three judges (two court judges and a juvenile judge) and administrative staff.

Laramie County seeks $9 million to remodel and expand the existing Laramie County Courthouse to provide courtroom and office space for a fourth District Court Judge authorized by the Wyoming Legislature along with building systems and physical plant upgrades.

County Jail Expansion (Prop. 2)

Laramie County seeks $16,176,680 to construct an addition on the existing Laramie County Detention Center located at 1910 Pioneer Ave., for the purpose of expanding inmate capactiy, for any additional administrative space, and for updating and improving existing infrastructure of the current facility.

Christensen Project (Prop. 3)

The City of Cheyenne seeks $15 million for The Christensen Road and Overpass Project which begins at Commerce Circle, near the I-80 and Campstool Road interchange in the center of the Cheyenne LEADS Business Parkway. The new road crosses the Union Pacific Railroad mainline, then continues north to US Highway 30. The length of the project is 1.25 miles. Constructed with the road and bridge project will be a new water main and storm sewer for drainage. The absence of the Christensen Project is a critical public safety concern. This relates to access and response times for fire, police and emergency personnel, particularly to the eastern portion of the LEADS Business Park and to the I-80/Campstool developments and nearby neighborhoods.

Multi-Purpose Event Facility (Prop. 4)

$9,885,000 and interest earned thereon to the Laramie County Fair Board to be used for the design, construction, equipping, and furnishing of a Multi-Purpose Facility at the Laramie County Archer Complex. The proposed facility will be an open-span building that will host a variety of events year-round for both residents and visitors, including Trade Shows, Expositions, Sporting Events, RV Rallies, Concerts, and Horse and Stock Shows. The Archer Complex was purchased in 2004 by Laramie County for the purpose of a Multifunctional Campus for citizens to use and enjoy year-round.

Proposition 5 ($11.970 million)

  • Albin housing expansion
  • Burns road, parking, watering improvements
  • Pine Bluffs electric infrastructure improvements
  • Cheyenne Street Improvements
  • Cheyenne Greenway expansion/maintenance
  • Albin emergency generators/water source
  • Pine Bluffs clean water system renovation
  • Pine Bluffs new public works facility
  • Laramie County Fire District#1 construction of a new fire station

Proposition 6 ($11.969 million)

  • Cheyenne mulitpurpose indoor turf facility
  • Burns remodel/O&M of town owned facilities
  • Albin (O&M) new water meter system
  • Burns street maintenance
  • Laramie County radio equipment/O&M
  • Pine Bluffs refurbish recreational facilities

Proposition 7 ($14.870 million)

  • Albin replace vehicle storage facility
  • Burns dump truck and attachments
  • Albin replace parking lot at Town Hall
  • Pine Bluffs upgrade town cemetery
  • Laramie County emergency services storage
  • Cheyenne Construct Indoor Gymnasium/offices (O&M)
  • Burns 4th Street sewer line completion (O&M)
  • Cheyenne fire station improvements/fire engines

Proposition 8 ($8.848 million)

  • Albin purchase utility pickup truck, toolboxes
  • Cheyenne street improvements
  • Albin sewer line replacement
  • Pine Bluffs debt reduction
  • Cheyenne purchase land East Community Park
  • Pine Bluffs replace town equipment
  • Burns Radios, Pagers, and other communication equipment

Proposition 9 ($11,700,500)

  • Eastern Laramie County Solid Waste Disposal District purchase new scraper, shop addition
  • Laramie County enhance emergency computers
  • Laramie County Fire District #2 new station
  • Cheyenne West Edge District enhancements
  • Laramie County Sheriff video recording system
  • Pine Bluffs street maintenance/repair program
  • Albin replace existing water lines
  • Albin Community Center repairs/maintenance
  • Burns improvements to town parks
  • Burns improvements to water and sewer system

2016 Utah home sales highest on record

Utah Home Sales
With nearly 50,000 in sales in 2016, the Utah housing marketing continues to break annual sales records.

Utah’s booming economy, high job growth and low interest rates led the state to a record-breaking year for home sales in 2016. Statewide, Utah Realtors sold 49,399 homes, townhomes and condominiums — the most transactions ever in a single year and more than 800 sales higher than 2015.

That’s according to the newly released December 2016 housing market report from the Utah Association of Realtors.

For a decade, 2005 held the statewide record for the most homes sold in a year at 47,987 sales. Realtors crushed that record in 2015 as Utah’s housing market came roaring back. The momentum continued in 2016 with sales nearly 2 percent higher than the 2015 tally.

“Huge demand from buyers combined with low interest rates created incredibly high housing activity,” said DeAnna Dipo, 2017 president of the Utah Association of Realtors. “While that momentum could lose some steam because of increases in home prices and interest rates, markets are still hot. Even in January, which is the slowest month of the year for home sales, we’ve seen bidding wars for properties.”

In counties with more than 200 sales, the areas with the largest sales gains in 2016 were Wasatch County (up 16 percent), Sevier County (up 11 percent) and Washington County (up 9 percent).

With the high demand, home prices headed up in 2016. At $246,000, the Utah median sales price rose nearly 8 percent from 2015. Prices increased nearly $18,000 during the year. December marked the 57th consecutive month of year-over-year gains.

In counties with more than 200 sales, prices increased the most in Summit County (up 19 percent), Sevier County (up 15 percent) and Wasatch County (up 12 percent).

Utah housing inventory remained at very low levels. As of Dec. 31, 2016, the number of homes for sale in Utah was at an all-time low, according to records dating back to 2003.

The 11,133 properties on the market represent a supply of 2.6 months. In other words, all homes would be sold in less than three months if no additional properties came on the market. Conversely, at the height of the housing downturn, it would take more than 12 months to deplete supplies.

Buyers have the most selection and least competition in the higher price ranges, especially for homes more than $500,000. In fact, sales in the $500,001-to-$750,000 category increased 24 percent. Meanwhile, sales fell in categories below $200,000 as buyers fought for relatively few houses.

“With the market moving as quickly as it is, it’s important for both buyers and sellers to be working with an expert who can guide them through the process,” Dipo said. “Buyers need to know how to make their offers competitive so they have the best chance of getting the property they want. On the other hand, sellers need to be very careful as they manage multiple offers — both to get the best price and to avoid going under contract with two buyers.”

Affordability continues to be a challenge, especially with higher interest rates. The Utah Association of Realtors’ Housing Affordability Index fell 10 percent in 2016 to 121. That means a Utah family making the median income had 121 percent of that needed to qualify for the median-priced home — lower than last year but still better than during the 2006-07 housing boom.

While the jump in interest rates after the election dampened some buyers’ enthusiasm, sales were still strong in December, up about 2 percent from last year. Pending sales, a measure of sales activity over the next couple months, also rose 16 percent — evidence the market is still active despite the higher costs.

Originally published in the UAR Blog.

Montana REALTORS Discuss Homeowner Issues With State Legislators

Manoa flood
REALTORS® from across the state met with legislators to talk about a range of issues important to homeowners.

Montana REALTORS® are not only community builders they are political advocates, working to ensure that homeowners’ legal rights are protected and that they are given a voice in the Capitol. On February 15, a group of around 100 REALTORS® did just that by gathering together at the Montana REALTORS® Association (MAR) offices in Helena.

MAR assisted REALTOR associations throughout the state by organizing transportation so that REALTORS® from all areas could attend the event. Once assembled at MAR offices, the REALTORS traveled together to the state capital where they attended a rally and information session with Governmental Affairs Directors and guest speakers. Afterwards, REALTORS® spent one-on-one time discussing relevant issues with Butte-Silver Bow Legislators as well as others.

Rich Mayo, Vice President at MAR shared details about the event, “We welcomed the legislators to a luncheon in the rotunda of the capitol building. Tables were set up with elevated cards identifying the different regions of the state. Representatives sat at their respective tables with REALTORS® from their areas.”

Rocky Mountain Association of REALTORS® President Jennifer Shea touched on some of the topics that REALTORS® focused on during their time with state legislators. “We discussed water policies, mortgage exemptions, landlord tenant notifications, subdivision phasing, condominium and townhouse conversions as well as other bills facing both the Senate and House.” Mayo added that, “In addition to the conversation, we shared informational card packets containing perspective on all the bills we are working on and the rationale behind them.”

MAR felt that it was a very successful event with a lot of productive and healthy dialogue. “We are confident that the legislators left with a better understanding of what we are fighting for and why” stated Mayo. MAR plans to repeat A Day On The Hill next year and will continue to seek opportunities to advocate for homeowners.