In 2020, home buyers left states with high taxes and pricey housing in favor of lower-cost metro areas, such as Texas, Florida, North Carolina, South Carolina, Georgia, and Tennessee, according to CoreLogic’s 2020 Hottest Cities for Homebuyers Report.

“The pandemic created a perfect recipe for consistently employed Americans,” said Archana Pradhan, CoreLogic’s principal economist. “If it had been any other mix of events, for example, if low housing inventory was coupled with job inflexibility, we wouldn’t have had such a large group of homebuying consumers feeling empowered to make bold moves in their living situations.”

The top 15 metros on CoreLogic’s hottest cities for home buyers report for 2020 tended to tout affordability with lower costs per square foot, lower property taxes, and no state income taxes. Also, sunny climates that offer lots of outdoor amenities tended to be a big draw.

The 15 metros with the highest inbound migration in 2020 were:

1. Riverside-San Bernardino-Ontario, Calif.
2. Lakeland-Winter Haven, Fla.
3. Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.
4. Las Vegas-Henderson-Paradise, Nev.
5. Tampa-St. Petersburg-Clearwater, Fla.
6. Port St. Lucie, Fla.
7. Jacksonville, Fla.
8. San Antonio-New Braunfels, Texas
9. Deltona-Daytona Beach-Ormond Beach, Fla.
10. Dallas-Fort Worth-Arlington, Texas
11. Stockton, Calif.
12. Cape Coral-Fort Myers, Fla.
13. Phoenix-Mesa-Chandler, Ariz.
14. North Port-Sarasota-Bradenton, Fla.
15. Greeley, Colo.

Meanwhile, the cities with the highest outbound migrations in 2020 were New York-Newark-Jersey City, N.Y.-N.J.-Pa.; Los Angeles-Long Beach-Anaheim, Calif.; and San Francisco-Oakland-Berkeley, Calif.

Home renovations have been surging during the pandemic, and homeowners aren’t shying away from major redos either. More than half—55%—of more than 2,000 U.S. homeowners recently surveyed reported making substantial improvements to their homes that they believe will boost their home’s value, according to a July survey commissioned by Selective Insurance and conducted by The Harris Poll. That marks a 25% increase in large-scale home improvement projects reported by homeowners compared to its December 2020 survey results.

The South leads the nation in home improvement projects, the survey found.

Respondents reported the following three “major” home improvement projects since the beginning of the pandemic:

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12% are adding a new room

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17% are adding a pool/hot tub

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Watch Insurance Coverage

The survey found that many homeowners are updating their insurance as they upgrade their homes. Among homeowners who improved their homes during the pandemic, only 23% said they hadn’t updated their insurance coverage; another 10% were unsure.

“Every home renovation project is unique, but every homeowner needs to protect their investment from future loss,” said Allen Anderson, senior vice president of personal lines at Selective. He urged homeowners to evaluate their coverage needs—particularly after a renovation—and update their insurance to reflect their renovated home’s full replacement value.

Higher home prices are translating into mega wealth for those who own.

Thirty-four percent of residential properties in the U.S. with a mortgage were considered “equity rich” in the second quarter, which means the combined estimated amount of loans secured by the properties was at least 50% of its estimated market value, according to a new report from ATTOM Data Solutions. The number continues to grow, increasing from 31.2% in the first quarter and 27.5% in the second quarter of 2020.

“The huge home price jumps over the past year that helped millions of sellers earn big profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years,” said Todd Teta, chief product officer with ATTOM. “Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country.”

Every state saw equity-rich levels rise in the second quarter. Western and northeastern states saw the biggest improvement, led by Arizona (up from 16.3% in the first quarter of 2021 to 39.7% in the second quarter), Massachusetts (from 25.3% to 41.7%); New Hampshire (20.4% to 36.1%); and Rhode Island (21% to 36.4%), according to ATTOM Data Solutions’ report. Overall, the states with the highest level of equity-rich homes were Idaho (54.2%) and California (53.8%).

On a metro level, the areas with the highest share of mortgaged properties that were equity rich in the second quarter were:

• San Jose, Calif.: 69.4% equity-rich
• San Francisco: 64.9%
• Los Angeles: 57.9%
• Boise, Idaho: 57.4%
• San Diego: 54.3%

In the Northeast region, Boston had the highest number of equity-rich properties at 43.9% while the South’s leader was Austin, Texas (52.3%). Grand Rapids, Mich., has the highest percentage of equity-rich properties in the Midwest at 37.2%.

Only 4.1% of mortgage homes across the U.S. were considered seriously underwater in the second quarter. That is when the combined estimated balance of loans secured by the property is at least 25% more than the property’s estimated market value.

The COVID-19 pandemic has fueled an acceleration in online transactions, including in real estate. The majority of U.S. adults are comfortable completing financial purchases digitally, too, finds a new survey released by Notarize, a company that offers remote online notarization.

Eighty-one percent of 2,000 U.S. adults who responded say they feel secure making financial transactions online. But extra authentication and verification steps make them feel safer when doing so, according to the survey.

Over half of the U.S. adults surveyed who’ve completed financial transactions online say that two-factor authentication and security questions help make them feel more secure completing an online financial transaction.

Older generations appear to feel the most secure with online transactions, the survey finds. Consumers 45 to 54 years old felt the most secure completing online financial transactions at 87% compared to 79% of younger adults aged 18 to 34, the findings show.

Younger Americans, ages 18 to 34, say they feel the most comfortable with an online financial transaction if they are also able to talk to customer service by phone or online (53%). Americans between the ages of 45 to 54 say that two-factor authentication (56%) and security questions (61%) make their online financial transactions feel safer.

The awareness of online notarization—another piece to digitizing more financial transactions—is highest among younger generations (18 to 34 years old and 35 to 44), while awareness drops off significantly among older Americans, 65 and older, the report finds.

“Even the most traditional, in-person transactions have quickly shifted online and as a result, consumers are rethinking every facet of how they conduct sensitive financial transactions digitally,” says Pat Kinsel, founder and CEO of Notarize. “The data confirm what we at Notarize know to be true—people trust digital transactions, but still want safety and security throughout the process and are willing to go through the extra steps to give them peace of mind that their transactions are verified and safe. The takeaway for businesses is to make sure you enable technology that provides ease, speed, and security if you want to keep your customers coming back.”

Notarize was part of Second Century Ventures’ 2017 REach program, a strategic investment arm of the National Association of REALTORS® that helps companies launch into the real estate, financial services, banking, home services, and insurance industries spaces.

More homeowners say they plan to renovate their homes this year, and they are increasingly planning to take advantage of higher home prices and use their home’s equity to complete the renovations, according to Bank of America’s “2021 Homebuyer Insights Report: Home Improvement and Equity Spotlight.”

As home prices surge, more homeowners are tapping HELOCs to make significant home improvements. Gen X homeowners (ages 44 to 56) are the most likely to report using HELOCs for home improvements, the survey finds.

“Greater reliance on the home as both a workspace and a family center has led many owners to tailor their homes to their needs,” the report says.

The majority of respondents said they’re approaching their home improvements as a way to bring greater enjoyment to their living space (67%)—more so than seeking to increase their home’s value (33%). “Traditionally, home improvement projects have been measured through the lens of return on investment, but we’re seeing that the emotional connection to one’s home is just as important,” says Ann Thompson, specialty lending executive at Bank of America.

Remodeling Trends

The survey uncovered several trends with home improvement projects, including:

• Greater modernization: Many homeowners are taking on home improvement projects because they want to bring their homes up to date or need to replace dated areas of their homes. The median age of a U.S. owner-occupied housing stock is 39 years, according to the National Association of Home Builders.
• Fixer-uppers are OK: About 42% of younger home buyers surveyed say they would prefer to buy a fixer-upper and improve it over time than to purchase a home that’s move-in ready.
• DIY is trending: Many homeowners are taking a do-it-yourself approach to some of their smaller house projects, such as painting or upgrading hardware and fixtures. Fifty percent say they’ve learned how from watching videos. Nearly 40% say they were inspired by TV shows such as HGTV to do more DIY projects in their home. Younger adults are the most likely to do DIY. Nearly three-quarters of younger homeowners between the ages of 18 to 43 say they’ve completed DIY work around their house.
• Sustainability is important: Younger generations tend to value sustainability features the most. Half of younger generations want to add solar panels (51%) and energy-efficient appliances (48%). On the other hand, only one-third of older generations want to add solar panels (33%) and energy-efficient appliances (36%).

Profit margins for home sellers took an unexpected dip in the second quarter, but they continue to significantly exceed levels from a year ago. The dip may be a sign that investment returns may be declining, according to ATTOM Data Solutions’ second-quarter 2021 U.S. Home Sales Report.

In the second quarter, the typical single-family and condo sale in the U.S. posted an average profit of $94,500. That was up from $90,000 in the first quarter and $60,575 from the second quarter of 2020. But the profit margin—the return on investment that sellers made on their original purchase price—declined from 48.4% in the first quarter of this year to 44.9% in the second quarter, ATTOM Data Solutions reports.

That drop marked a “rare decline during a time of year that usually produces some of the best returns for sellers,” the report says. “The last time typical returns on investment dropped nationally during any second-quarter period was in 2008.”

Also unexpected, the drop in profit gains comes as the national median home price surged to another record in the second quarter of $305,000, ATTOM Data Solutions reports, up 22% compared to a year earlier.

“Still, profits dropped in the second quarter of this year because price gains—high as they were—were smaller than increases that recent sellers had been paying when they originally bought their homes,” the report notes. “The gap between the latest price gains and earlier increases caused the dip in profit margins.”

Profit margins dropped year over year in 37 of 195 metro areas analyzed but declined quarterly in 86—or 44%–of the metros, the report notes. The largest annual decreases were in San Jose, Calif. (margin down from 85.6% in the second quarter of 2020 to 67.4% in the second quarter of 2021), followed by Las Vegas (down from 45.8% to 30.5%); Kansas City, Mo. (down from 41.4% to 26.5%); Myrtle Beach, S.C. (down from 26.6% to 11.7%); and Los Angeles (down from 55.7% to 41.3%).

“Prices and profits from the second quarter painted yet another picture of a housing market in high gear—except for one thing,” said Todd Teta, chief product officer at ATTOM. “Profit margins dropped in the second quarter, which is very unusual for any springtime period because that’s when the housing market is usually hottest or close to it. While it may just be a momentary thing in today’s volatile market, it’s definitely something to keep an eye on in case it’s a sign that the market is finally cooling or giving in to some of the economic forces connected to the virus pandemic.”

In the second quarter, the largest annual increases in profit margins occurred in Boise City, Idaho (up from 59.6% in the second quarter of 2020 to 124.3% in the second quarter of 2021), followed by Charlottesville, Va. (up from 202.% to 83.6%), Scranton, Pa. (up from 34.9% to 80.9%), Claremont-Lebanon, N.H. (up from 18% to 57.3%), and Bellingham, Wash. (up from 60.8% to 98%).

The national ban on evictions ended on Saturday after a last-minute attempt to extend it by Democratic lawmakers failed in the House. The moratorium was first put in place by the U.S. Centers for Disease Control and Prevention in September 2020—an action that allowed tenants to miss their rental payments but left housing providers on the hook for payment of their bills. Housing providers say they’ve faced more than $13 billion in unpaid rent per month due to the moratorium.

But on July 31, the nationwide eviction moratorium—which had several extensions by the Biden administration over this year—came to an end. What comes next? The National Association of REALTORS® is hosting a free webinar, “Next Up: After the Eviction Moratorium,” on Aug. 4 at 1 p.m. Central time.

Now that the eviction moratorium has expired, tenants who missed rent payments will need to resume paying, which may include accommodation, such as a new payment plan or lease developed with the help of their housing provider. Tenants must repay any additional months they missed during the pandemic, although a few states have extended protections there or prohibited housing providers from charging late fees.

Also, housing providers may start processing an eviction notice for nonpayments of tenants—as long as they don’t live in states that have passed a local law extending the moratorium on evictions. California, Illinois, and New York, among others, have passed extensions on an eviction moratorium. In addition, some state court systems adopted policies barring or disfavoring the filing of eviction proceedings in light of the CDC eviction moratorium. Those policies may not have been automatically lifted when the CDC order expired.

Further, several federal agencies have extended their moratoriums until Sept. 30, such as the Federal Housing Finance Agency, the Department of Agriculture, Veterans Affairs, and the Department of Housing and Urban Development.

Rental Assistance Is Still Available

NAR has been a strong advocate of securing rental assistance for tenants. This is including two pieces of legislation that obtained nearly $50 billion for this federal emergency program. So far, an estimated 6.5% has been distributed of those funds as of last week.

The Consumer Financial Protection Bureau announced a new online tool where renters and housing providers who continue to face pandemic-related financial hardships can locate and apply for payment assistance for rent, utilities, and other expenses. The new Rental Assistance Finder, at consumerfinance.gov/renthelp, can guide housing providers and renters to aid programs in their area.

NAR also offers a webpage devoted to information for its members, including links to emergency rental assistance programs, government resources, and more. Access it at NAR.realtor. State-by-state eviction moratorium laws are also accessible to view here.