Getting Energy Ready for Winter
|When cold weather approaches, use this checklist of simple ways to make your home more comfortable and keep those escalating energy bills at bay.
Check for Leaks
Weatherstripping and caulking is probably the least expensive, simplest, most effective way to cut down on energy waste in the winter. Improperly sealed homes can waste 10 to 15 percent of the homeowner’s heating dollars. Take these steps:
1. Check around doors and windows for leaks and drafts. Add weather-stripping and caulk any holes you see that allow heat to escape. Make sure doors seal properly.
2. If your windows leak really badly, consider replacing them with newer, more efficient ones. Keep in mind, however, that replacing windows can be expensive – it could take you quite awhile to recover your costs from the energy savings alone. But new windows also provide other benefits, such as improved appearance and comfort.
3. Every duct, wire or pipe that penetrates the wall or ceiling or floor has the potential to waste energy. Plumbing vents can be especially bad, since they begin below the floor and go all the way through the roof. Seal them all with caulking or weather-stripping.
4. Electric wall plugs and switches can allow cold air in. Purchase simple-to-install, pre-cut foam gaskets that fit behind the switch plate and effectively prevent leaks.
5. Don’t forget to close the damper on your fireplace. Of course the damper needs to be open if a fire is burning; but if the damper is open when you’re not using the fireplace, your chimney functions as a large open window that draws warm air out of the room and creates a draft. Close that damper – it’s an effective energy-saving tip that costs you nothing!
6. Examine your house’s heating ducts for leaks. Think of your ductwork as huge hoses, bringing hot air instead of water into your house. Mostly out of sight, ducts can leak for years without you knowing it. They can become torn or crushed and flattened. Old duct tape – the worse thing to use to seal ductwork, by the way – will dry up and fall away over time, allowing junctions and splices to open, spilling heated air into your attic or under the house. It’s wasteful. According to field research performed by the California Energy Commission, you can save roughly 10 percent of your heating bill by preventing leaky ducts.
Check Your Insulation
1. Insulate your attic. In an older home, that can be the most cost-efficient way to cut home heating costs. Before energy efficiency standards, homes were often built with little or no insulation. As a result, large amounts of heat can be lost through walls, floors and – since heat rises – especially ceilings.
How much insulation should you install? Typical framed homes now being built in California’s Central Valley must meet insulation requirements of R-38 insulation in ceilings and R-19 for walls and floors.
2. Weather-strip and insulate your attic hatch or door to prevent warm air from escaping out the top of your house.
3. Seal holes in the attic that lead down into the house, such as open wall tops and duct, plumbing, or electrical runs. Any hole that leads from a basement or crawlspace to an attic is a big energy waster. Cover and seal them with spray foam and rigid foam board if necessary.
Check Your Heating System
1. Get a routine maintenance and inspection of your heating system each autumn to make sure it is in good working order.
2. Replace your heater’s air filter as recommended by the manufacturer. Your heating system will work less hard, use less energy and last longer as a result. Most homeowners can replace filters and do such simple tasks as cleaning and removing dust from vents or along baseboard heaters.
3. If your heating system is old, you might consider updating it with one of the more efficient newer models. You can cut your natural gas use and your monthly bill!
4. Use your set-back thermostat. California houses built today must have them. If you have an older home, consider installing one. A set-back thermostat allows you to automatically turn down the heat when you’re away at work or when you’re sleeping at night, and then boost the temperature to a comfortable level when you need it. Remember – it takes less energy to warm a cool home than to maintain a warm temperature all day long. Properly using your set-back thermostat could cut your heating costs from 20 to 75 percent.
5. Reverse the switch on your ceiling fans so they blow upward, toward the ceiling. Ceiling fans are a great idea in the summer, when air blowing downward can improve circulation and make a room feel four degrees cooler. A cooling draft is a poor idea when it’s cold, however. By reversing the fan’s direction, the blades move air upward in winter. This is especially valuable in high ceiling rooms, where heat that naturally rises is forced back down into the room.
6. Make sure all hearing vents are opened and unblocked by furniture or other items. This will ensure that the air is evenly distributed through the home.
Change a Light Bulb
1. Lighting our homes can represent 20 percent of home electricity bills and is one of the easiest places to start saving energy. If every household changed a light to an ENERGY STAR® one, together we’d save enough energy to light 7 million homes and reduce greenhouse gas emissions equivalent to that of 1 million cars.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) lost -38 basis points (BPS) from last Friday’s close which caused 30 year fixed rates to move higher for the second consecutive week. We saw our best rateson Monday and our worst rates on Wednesday. For the month of November, MBS have lost -172 basis points which have pushed mortgage rates upward for the month.
We had a holiday-shortened week with only three full trading sessions in the bond market. MBS moved in a very tight and sideways pattern until Wednesday’s data hit.
Headline Durable Goods Orders dropped -2.0% vs estimates of -1.9%, this is a low number and generally great for bond pricing but it did basically match expectations and this was during the period of the government shutdown. Plus the prior reading was revised upward from 3.7 to 4.1. This is a wash and MBS largely shrugged off this report.
But we had three reports that all pressured bonds and lead to worse pricing: Initial Weekly Jobless Claims 316K vs est 330K this was negative for bond pricing as any improvement in the labor picture pressures bonds. The Chicago Purchasing Manager’s Index came in at 63.0 vs market expectations of 60. A reading above 50 shows manufacturing and economic expansion. The University of Michigan’s Consumer Sentiment Index reading hit 75.1 vs market expectations of 73.5. These three reports all showed better than expected economic data which is always negative for MBS pricing and therefore rates.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
|Date||Time (ET)||Economic Release||Actual||Market Expects||Prior|
|2-Dec||10:00 AM||ISM Index||–||55.5||56.4|
|2-Dec||10:00 AM||Construction Spending||–||0.40%||0.60%|
|2-Dec||10:00 AM||Construction Spending||–||0.30%||NA|
|3-Dec||2:00 PM||Auto Sales||–||NA||5.4M|
|3-Dec||2:00 PM||Truck Sales||–||NA||6.5M|
|4-Dec||7:00 AM||MBA Mortgage Index||–||NA||-0.30%|
|4-Dec||7:00 AM||MBA Mortgage Purchase Index||–||NA||-0.30%|
|4-Dec||8:15 AM||ADP Employment Change||–||160K||130K|
|4-Dec||8:30 AM||Trade Balance||–||-$40.5B||-$41.8B|
|4-Dec||10:00 AM||New Home Sales||–||432K||421K|
|4-Dec||10:00 AM||New Home Sales||–||420K||NA|
|4-Dec||10:00 AM||ISM Services||–||55||55.4|
|4-Dec||10:30 AM||Crude Inventories||–||NA||2.953M|
|4-Dec||2:00 PM||Fed’s Beige Book||–||NA||NA|
|5-Dec||7:30 AM||Challenger Job Cuts||–||NA||-4.20%|
|5-Dec||8:30 AM||Initial Claims||–||330K||316K|
|5-Dec||8:30 AM||Continuing Claims||–||2850K||2776K|
|5-Dec||8:30 AM||GDP – Second Estimate||–||3.00%||2.80%|
|5-Dec||8:30 AM||GDP Deflator – Second Estimate||–||1.90%||1.90%|
|5-Dec||10:00 AM||Factory Orders||–||-1.00%||1.70%|
|5-Dec||10:30 AM||Natural Gas Inventories||–||NA||-13 bcf|
|6-Dec||8:30 AM||Nonfarm Payrolls||–||188K||204K|
|6-Dec||8:30 AM||Nonfarm Private Payrolls||–||200K||212K|
|6-Dec||8:30 AM||Unemployment Rate||–||7.20%||7.30%|
|6-Dec||8:30 AM||Hourly Earnings||–||0.20%||0.10%|
|6-Dec||8:30 AM||Average Workweek||–||34.5||34.4|
|6-Dec||8:30 AM||Personal Income||–||0.30%||0.50%|
|6-Dec||8:30 AM||Personal Spending||–||0.30%||0.20%|
|6-Dec||8:30 AM||PCE Prices – Core||–||0.10%||0.10%|
|6-Dec||9:55 AM||Mich Sentiment||–||75.1||75.1|
|6-Dec||3:00 PM||Consumer Credit||–||$15.8B||$13.7B|
I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
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