RICHMOND, Va., Nov. 5, 2013 /PRNewswire/ -- Lenders increasingly will need to understand how to value homes that are built or renovated using "green" or sustainable building methods, according to the latest video released today by Genworth Mortgage Insurance (MI), the Raleigh, NC-based unit of Genworth Financial Inc. (NYSE: GNW).
Adam Johnston, chief appraiser for Genworth MI, said housing industry participants expect a significant increase in green activity. "In 2011 about 17 percent of residential construction was green homes, according to a National Association of Home Builders study conducted with McGraw Hill Construction. By 2016 green homes are expected to be 29 to 38 percent of the market by value, possibly reaching about $114 billion of activity," said Johnston. He said Genworth MI is studying the green market to better understand what it means to home buyers and the housing industry.
Genworth created the video to help its lender partners and others begin to understand considerations in valuing green homes. "While not all markets show signs of people paying measurably more for many of the common items we would classify as green, we do see an improvement in recognition of that area," said Johnston."As we gain greater understanding of the green features and benefits that drive value, those and other factors may influence how we underwrite borrowers and value homes." For example, the lower utility and maintenance costs that result from incorporating well-designed energy-saving and sustainable features can make both new and existing homes more affordable for owners over the long term, he said.
Johnston noted that there isn't a standard definition for features that make a new or existing home green. He said Genworth MI's view includes sustainable construction practices with minimal waste, use of energy and water-efficient appliances, and retrofitting homes to add items like energy efficient windows and insulation. He added that Genworth MI is closely following efforts to develop education, standardization, measurement and verification guidelines that ultimately may allow homeowners to reap the benefits of green design in the context of responsible lending.
In the video, Johnston also describes Genworth's approach to establishing the value of the mortgages it insures. "One thing we know is that markets change and will continue to change. We have lots of tools to measure those changes to see what's happening, both now and what's likely to happen in the future. That type of information is valuable in understanding risk."
Johnston serves on the Board of Trustees of The Appraisal Foundation, is a SRA-designated member of the Appraisal Institute, and is a Certified Residential Appraiser in several states.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 insurance holding company dedicated to helping people secure their financial lives, families and futures. Genworth has leadership positions in offerings that assist consumers in protecting themselves, investing for the future and planning for retirement -- including life insurance, long term care insurance, and financial protection coverages -- and mortgage insurance that helps consumers achieve home ownership while assisting lenders in managing their risk and capital.
Genworth operates through three divisions: U.S. Life Insurance, which includes life insurance, long term care insurance and fixed annuities; Global Mortgage Insurance, containing U.S. Mortgage Insurance and International Mortgage Insurance segments; and the Corporate and Other division, which includes the International Protection and Runoff segments. Products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth, headquartered in Richmond, Virginia, traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com. From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com.
Green Home Valuation Trends
Video with caption: "Green Home Valuation Trends-Genworth MI". Video available at: http://www.youtube.com/watch?v=DgxMcSQX_9M
SOURCE Genworth Financial, Inc.