“Financially Astute Energy Efficient Home Owners”

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A recent University of NC research study compared a sample of about 71,000 Energy Star and non- Energy Star rated homes loan performance data. It was found that homeowners who live in energy efficient properties are less likely to default on their mortgages than those who don’t. The more efficient the house, the lower the default risk, with each one point decrease in a home’s HERS index correlating to a 4% decease in the risk of default.  The study controlled for size and age of the house, neighborhood income, the local unemployment rate, and other factors.  However, a fact street from the nonprofit Institute for Market Transformation, which funded the research, notes that one possible explanation couldn’t be ruled out: “That buyers of energy-efficient homes may be more financially astute than other borrowers.”

(HERS: A home energy rating is an analysis of a home’s energy efficiency;  HERS Index is the nationally recognized scoring system for measuring a home’s energy performance. Based on the results, an energy-rated home will receive a HERS Index Score. The HERS Index Score can be described as a sort of miles-per-gallon (MPG) sticker for houses, giving prospective buyers and homeowners an insight as to how the home ranks in terms of energy efficiency. )