Realtor Group Claims New Flood Insurance Rates Could Affect Real Estate Market
The Massachusetts Association of Realtors says the number of sales and median selling prices for single-family homes in the state rose in August over the same month last year. But the group says upcoming flood insurance changes could derail the housing market's recovery.
The Biggert-Waters Act, passed by Congress last year and scheduled to take effect October 1st., is designed to financially shore up the debt-laden National Flood Insurance Program by increasing rates to more accurately reflect the real risk and costs of flooding. Some policy holders will see their insurance premiums rise by 25 percent per year starting next week. And that concerns Peter Ruffini of the Massachusetts Association of Realtors.
“We’re not talking the difference of, you know, five hundred to two thousand dollars a year", he says. "In many cases what we’re hearing out there from property owners is 10, 20, up to 50 thousand dollars for flood insurance. That’s more than many folks are paying for their mortgage payments on an annual basis.”
Moreover, Ruffini says, newly redrawn maps by FEMA - the Federal Emergency Management Agency - have now placed homes and commercial properties in flood zones for the first time, subjecting more owners to the increased insurance rates. Ruffini says the US House of Representatives has passed a proposal to delay the new rates for one year. His group is calling on the Senate to follow suit.