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DS News highlights a new report from Fitch Ratings, released earlier this week, that predicts a potentially big year for the housing market in 2015.
Unlike other commentators, whose projections were based on encouraging market trends, the ratings agency says it’s a combination of recent government actions that reinforces its view.
In the report, Fitch outlined five big events – all of which have taken place in the past few months – that, taken together, “could have a relatively meaningful impact on home buyer psychology, pent-up demand and housing trends in 2015 and beyond,” the company says.
A new article from U.S. News & World Report highlights five credit card mistakes that could prevent homeowners from getting a mortgage – and provides helpful information on how to avoid those mistakes.
One of the critical factors bankers and mortgage brokers look at when deciding the terms of your home loan is your credit score. Most lenders use the FICO score to assess your creditworthiness, 35 percent of which is determined by your history with paying your bills on time.
If you habitually pay your credit card bill late (or any other bill for that matter) your credit score might be in shoddy shape. You’ll need to seriously tighten up your on-time payment record if you want to qualify for a mortgage.
Another big misstep that would-be homeowners make when they start getting serious about mortgage applications is simultaneously signing up for a bunch of new credit cards. Many folks reason that they’ll need the credit for moving expenses, but this is a bad move for your FICO score.
As much of the United States endured severe cold temperatures from a recent arctic blast, U.S. News & World Report highlighted some of the things homeowners can do to reduce their heating costs.
For example, if you have any rooms in your home that are rarely used, seal them off. Turn off all vents in those rooms, close the door and block the air flow under the door with towels or a blanket. The temperature in that room will drop significantly, which is a good thing. It means that you haven’t spent money heating up that room you don’t use.
You can also open curtains when sunlight hits them, and close them otherwise. When direct sunlight hits a window, there will be a slight warming effect even on a very cold day. So, on sunny days, open the blinds on the east side of your home in the morning and on the west side in the evening.
If you have ceiling fans, set them to run in a clockwise direction. People often associate ceiling fan use with keeping cool in the summer, but it can actually help keep you warm in the winter by circulating the warm air that rises to the top of the room.
A new article from Forbes explains why now might be a good time to think about buying housing to hold for the long-term, highlighting 20 cities that are their selections for the top 20 housing markets to invest in this year.
Each of Forbes’ Best Buy Cities has strong population and jobs growth, and relatively low home prices. The cities on the list are places where opportunities are increasing – and so are their populations.
Given strong economic engines like the energy industry in Houston and the vibrant tech scene in Austin, it’s not too surprising that Texas is the state with the most Best Buy cities – five, or 25% of the list. Number one ranked Austin is followed by Houston (No. 3), Dallas (No. 5), San Antonio (No. 6) and Fort Worth (No. 10).
Other cities on the list include Orlando, Denver, Phoenix, Atlanta, West Palm Beach, Jacksonville, Minneapolis-St. Paul, Tacoma and Sacramento.
This article from Businessweek outlines the factors that are leading to a resurgence of young buyers to the housing market, including faster economic growth and a labor market that’s approaching what the Federal Reserve calls “full employment,” meaning anyone who wants a job has one. An increase in first-time buyers, whose market share dropped to a record low last year, will provide a boost to the sluggish mortgage industry.
“Credit tightness has been an issue for the housing market but demand weakness has been a bigger one,” said Douglas Duncan, chief economist at mortgage giant Fannie Mae in Washington. “The improving economy is going to put renters in a better place to buy.”
Duncan predicts a 6.3 percent increase in mortgage lending for purchases this year after a drop of 9.6 percent in 2014. He said increasing confidence in the job market is the strongest indicator home sales will improve.
The Thomson Reuters/University of Michigan consumer sentiment poll showed last month that consumers expect an increase of 1.7 percent in their incomes in 2015, the highest since 2008. Those under 45-years-old expect the biggest gain, at 4.7 percent.
Highlighting a recent analysis from Insurance.com, an auto insurance comparison site, a new article from The Wall Street Journal indicates that people who own homes might be better drivers.
Insurers have long observed that, on average, drivers who own their homes file fewer auto-insurance claims than renters. And, in fact, many companies take homeownership into account when calculating a customer’s premiums, says Des Toups, managing editor of Insurance.com
Most likely to file an auto claim are drivers between 18 and 24 who live with their parents. According to Insurance.com data, 24.4% of drivers in this group have filed a claim in the past three years. Meanwhile, 19.7% of renters 18 to 24 have filed a claim, while 17.6% of homeowners 18 to 24 have filed a claim.
Are you a renter or a buyer? Many people already know the answer to that question. But for those who have the means and motivation to do either, the choice can be difficult to make. In a recent article, Bankrate helps those people solve the riddle, based on varying circumstances that might affect their decision.
Buying offers freedom from rising rents, a mortgage interest tax deduction and the possibility of building equity in a home over time. Renting offers flexibility and no home maintenance or repair costs or obligations.
Affordability is a key factor that can tip the scales to the buy side, says Wendy English, sales manager for Century 21 Commonwealth in Medfield, Massachusetts. Rapidly rising rents in many cities, combined with attractive home prices and low mortgage interest rates, make owning a home seem more affordable than renting.
Even when buying appears affordable, a limited supply of for-sale homes can tip even the most motivated buyers back to the rent side.
We have to give a lot of credit to U.S. News & World Report, for this new article that explains the differences between the various credit scoring models out there today.
Scoring models have evolved over time based on consumer behavior. “Going through the mortgage crisis and the economic downturn … Americans’ saving habits changed, and the way they use credit cards changed,” says Rod Griffin, director of public education at the credit bureau Experian. “As people change, scoring models change in order to continue to accurately reflect risk.”
Different scoring models weigh certain factors more heavily than others. FICO scores are used in 90 percent of lending decisions in the U.S., according to its website. The majority of those lenders use FICO 8, says Anthony Sprauve, senior consumer credit specialist at Fair Isaac Corporation, but some use previous versions.
While there are many different scoring models, the same principles for improving your credit score apply across the board. “What is far more important than the number itself is understanding what you need to do to make that number better,” Griffin says. “The scores may be different, but risk factors tend to be very consistent from one credit score to the next.”
Sprauve boils down credit improvement to three key steps. Pay all your bills on time, because payment history makes up 35 percent of your FICO score. Keep revolving balances low, ideally to 30 percent or less of your available credit, and only open new credit when you need it.
The Wall Street Journal reports that home prices have returned to new highs in eight of the 40 largest metropolitan areas in the U.S. Nationally, prices are down 10.2% from their June 2006 peak, according to figures released by Black Knight Financial Services, a real-estate data firm.
The S&P/Case-Shiller index, which publishes data on 20 metro areas, has shown that prices in Denver and Dallas returned to new nominal highs in 2013.
Of the eight cities where prices have pushed to new highs, half of those record-setting markets are in Texas. Prices in Austin, Dallas and Houston have risen between 7% and 9% for the year through October, while prices in San Antonio are up 4.7%.
Prices have also risen to records in Denver and Nashville.
