Millions of Consumers Getting a Credit Score Boost

An overhaul in how several major credit reporting agencies factor in negative credit information is prompting millions of consumers’ credit scores to rise. Collection events were struck from 8 million consumers’ credit reports in the 12 months ending in June. The New York Federal Reserve reported Tuesday that consumers who had at least one collections account removed from their credit reports are seeing an 11-point increase to their scores.

Critics have long claimed such dings to scores are prone to errors or that they’ve unfairly kept many out of the borrowing market. Equifax, Experian PLC, and TransUnion have all agreed to revamp reports, which stems from a 2015 settlement with state attorneys general on the matter. In the settlement, the firms agreed to remove some non-loan related items that were sent to collection firms, such as gym memberships, library fines, and traffic tickets. They also agreed to strike medical-debt collections that have been paid by a patient’s insurance company.

Source: “Overhaul Boosts Credit Scores of Millions of U.S. Consumers,” The Wall Street Journal (Aug. 15, 2018)

5M Renters Have Fallen Prey to Online Scams

More than 43 percent of renters say they’ve found online rental listings that seemed fraudulent, and more than 5 million say they’ve actually been scammed—sometimes to the tune of thousands of dollars—according to a new report released by rental website ApartmentList.com.

The survey revealed that the most common scam is a “bait-and-switch” one, where a different property is advertised than the one that is actually available. The scammer is often able to collect a deposit or get a lease signed for the fake property. Another common scam is the “hijacked ad,” where a scammer takes a home that is legitimately for sale and poses as a fake landlord to collect funds. Apartment List also warns of a growing scam in which a listing property that is already leased is posted online. The scammer then attempts to collect application fees or security deposits from an unsuspecting consumer.

Source: “Ready to Rent a Home? Beware of These New Scams,” CNBC (Aug. 9, 2018)

Another ‘Client’ to Please: The Family Pet

Home buyers are increasingly being swayed by their pets when choosing which property to purchase. Three-quarters of home buyers say they would even pass up an otherwise perfect home—their dream home—if it did not meet their pets’ needs, according to a new realtor.com® survey of more than 1,000 consumers who’ve closed on a home in 2018.

Pet owners comprised 80 percent of recent home buyers—with dogs and cats being the most common types of pet—according to the survey. Younger buyers and those with children appeared to be the most influenced by their pets’ needs when shopping for a home, according to the survey.

Pet owners gave their two most desired features in a home: a large backyard and outdoor space. Other top features pet owners say they valued in a home included a garage, large square footage, a dog run and sturdy flooring.

Source: “One of the Family: Three-Quarters of Home Buyers Would Pass Up Dream Home for Pets’ Needs,” Move Inc. (Aug. 8, 2018)

Hike in Mortgage Rates Reduces Affordability

Borrowers got stuck with higher mortgage rates again this week. Mortgage rates are now at their fourth highest level of the year, Freddie Mac reports.

“The higher rate environment, coupled with the ongoing lack of affordable inventory, has led to a drag on existing-home sales in the last few months,” says Sam Khater, Freddie Mac’s chief economist.

The Federal Reserve this week voted to hold off on raising its short-term rate, “but the embers of a strong economy potentially stoking higher inflation, borrowing costs will likely modestly rise in the coming months,” Khater adds.

Freddie Mac reports the following national averages for the week ending Aug. 2:

  • 30-year fixed-rate mortgages: averaged 4.60 percent, with an average 0.4 point, rising from last week’s 4.54 percent average. Last year at this time, 30-year rates averaged 3.93 percent.
  • 15-year fixed-rate mortgages: averaged 4.08 percent, with an average 0.4 point, increasing from last week’s 4.02 percent average. A year ago, 15-year rates averaged 3.18 percent.
Source: Freddie Mac

Too Much Income Devoted to Making Rent

Renters are struggling to catch a break. In seven of the largest U.S. cities, the average household would need to make at least six figures to comfortably afford the rent on a two-bedroom apartment, according to a new study by SmartAsset, a personal financial website. SmartAsset researchers looked at how much it takes to afford average rental rates in the nation’s 25 largest cities.

Households that spend more than 30 percent of their incomes on housing are considered “cost burdened” by most economists. SmartAsset researchers found rents in California’s largest cities took some of the biggest bites out of American’s paychecks. Four California cities ranked in the top 10 on the list: San Francisco, Los Angeles, San Jose, and San Diego.

A separate study, recently released by PropertyShark and RentCafe, found that if renters could save enough for a down payment they may fare better as homeowners. Renters in more than half of the 50 cities in the study could barely make it until payday, while in 44 of the 50 cities tracked, homeowners were projected to be able to save money each month.

An Artificial Lawn Isn’t Maintenance-Free

Artificial grass, which comes in multiple textures, finishes, and colors, can give homeowners a low-maintenance alternative to natural lawns. But it has pros and cons.

Artificial grass doesn’t need watering and remains green all year, which is a big selling point for homeowners. It works well in most climates, particularly dry climates, but it’s not totally maintenance-free. For example, you’ll need to rinse an artificial lawn to clear it of dirt and debris. Also, you’ll need to “groom your lawn to fluff the blades of grass and keep it from becoming matted,” Rob Turley, general manager at Custom Turf in Finleyville, Pa., told realtor.com®.

Artificial lawn materials can be pricey and require special equipment to install, costing between $8 to $20 per square foot, Turley says. Natural grass costs about $0.25 per square foot, for comparison.

Source: “Is Artificial Grass Right for Your Yard? 5 Factors to Consider,” realtor.com® (July 23, 2018)

Ideal Age for First-Time Home Buyers

Apparently the magic number for first-time home buyers is 28. That’s the average age that most Americans think a person should be when they buy their own home, according to a new Bankrate.com report conducted  last month among a sample of 1,001 respondents.

This may be a bit optimistic in practice, at least for buyers in today’s market. The National Association of REALTORS®’ 2017 Profile of Home Buyers and Sellers found the median age of first-time buyers was 32 years old for the second year in a row.

The Bankrate study did find some differences in opinion between genders and regions of the country. While a quarter of men think people should strive to buy their first home by age 25, just 12 percent of women say the same.

Source: “Americans reveal ideal ages for financial milestones,” (July 18, 2018) Bankrate.com

Mortgage Rates Continue to Slide This Week

Mortgage rates this summer have been dropping the past few weeks after sharp rises this spring. “A record number of people quit their job last month, most likely for a new opportunity with higher wages and better benefits,” says Sam Khater, Freddie Mac’s chief economist. “This positive trend, along with these lower mortgage rates, should increasingly give some previously priced-out prospective home buyers the financial wherewithal to resume their home search.”

Freddie Mac reports the following national averages for the week ending July 12:

  • 30-year fixed-rate mortgages: averaged 4.53 percent for the week, up from last week’s 4.52 percent average. Last year at this time, 30-year rates averaged 4.03 percent.
  • 15-year fixed-rate mortgages: averaged 4.02 percent this week, up from last week’s 3.99 percent average. A year ago, 15-year fixed-rates averaged 3.29 percent.
Source: Freddie Mac

Mortgage Rates Fall to 3-Month Low

Mortgage rates were back down across the board again this week, offering some temporary relief to home buyers. Rates posted a rapid increase throughout most of the spring but have recently reversed course, declining in five of the past six weeks to the lowest average since April.

Freddie Mac reports the following national averages for the week ending July 5:

  • 30-year fixed-rate mortgages: averaged 4.52 percent, with an average 0.5 point, dropping from last week’s 4.55 percent average. Last year at this time, 30-year rates averaged 3.96 percent.
  • 15-year fixed-rate mortgages: averaged 3.99 percent, with an average 0.4 point, falling from last week’s 4.04 percent average. A year ago, 15-year rates averaged 3.22 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.74 percent, with an average 0.3 point, falling from last week’s 3.87 percent average. A year ago, 5-year ARMs averaged 3.21 percent.
Source:

Manufactured Homes for Affordable Housing?

Home inventory of has fallen near record lows across the country, but more consumers are in need of a place to live. Some economists say manufactured homes—also known as mobile homes or trailers—may be the answer to relieve housing shortages in some markets needing more affordable housing.

In the nation’s 100 largest metros, residents living in manufactured homes—either renting or owning—spend an average of 40 percent less on housing than those living in more traditional “stick-built” homes. The average monthly gross housing cost for a mobile home is $564, compared with $1,057 for a traditionally built home or apartment, according to the report by Apartment List. (The gross housing cost includes rent or mortgage payments and property taxes, lot rent for mobile homes, and utility costs.)

Seniors on fixed incomes may find the option more appealing. Upscale mobile home parks are popping up that are aimed at attracting the 55-plus crowd, offering spacious “double-wide” manufactured homes , community centers, and pools, among other amenities.