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)

Wildfires May Make Insurance Harder to Get in California

As firefighters work on the containment of at least 11 wildfires that continue to burn throughout the state, the California Department of Insurance is already warning homeowners about the insurance headaches they will likely face, even for those whose homes weren’t affected in the latest fires.

The increasing number and severity of wildfires will likely make it more difficult for homeowners in the state to find and hold onto insurance, the California Department of Insurance warns.

California Insurance Commissioner David Jones told the Associated Press that more insurance companies may choose not to renew policies, or may stop writing homeowners policies in areas with the highest fire risk. He also says homeowners in the state should be prepared to face rate increases. Also, some portions of the state may be reclassified from safe to high-risk for wildfires that could jump costs for homeowners.

Source: “California fires may make homeowners insurance harder to get,” Associated Press (Aug. 13, 2018)

Dip in Rates Provides ‘Stability’ for Home Sales

Borrowers saw a little relief from recent increases. Mortgage rates dropped slightly this week, with the 30-year fixed-rate mortgage averaging 4.59 percent, Freddie Mac reports. “This stability is much needed for home sales, which have crested because of the multiyear run up in prices, tight affordable inventory, and this year’s higher rates,” says Sam Khater, Freddie Mac’s chief economist.

Home prices are still climbing and rates are up from 3.90 percent a year ago. “Some prospective buyers are definitely feeling an affordability crunch,” Khater says.

Freddie Mac reports the following national averages for the week ending Aug. 9:

  • 30-year fixed-rate mortgages: averaged 4.59 percent, with an average 0.5 point, dropping from last week’s 4.60 percent average. Last year at this time, 30-year rates averaged 3.90 percent.
  • 15-year fixed-rate mortgages: averaged 4.05 percent, with an average 0.5 point, falling from last week’s 4.08 percent average. A year ago, 15-year rates averaged 3.18 percent.
Source: “Mortgage Rates Inch Backward,” Freddie Mac (Aug. 9, 2018)

New Program Aims to Cap Rent Hikes

Similar to the concept of rent control, Freddie Mac announced a new program to incentivize rental property owners to ease their continuous rent hikes. The mortgage giant is offering discounted financing to owners who agree to cap rent increases for the life of their loans. Owners who take part in the program must limit rent increases on 80 percent of their units. Owners also must agree to make at least 50 percent of their units affordable to those earning the local median income or less.

The program, now available across the country, is voluntary. Freddie Mac officials say they will check rents on an annual basis to make sure participating property owners are complying with the program’s rules. Those who are in violation will be assessed a penalty fee until they return rents to a level that Freddie deems compliant.

Source: “Freddie Mac to Lower Financing Costs for Landlords who Cap Rent Rises,” The Wall Street Journal (Aug. 7, 2018)

The Kitchen New-Home Buyers Want

New-home buyers now rank all-white kitchens—once the most in-demand aesthetic—as their second choice, below natural wood cabinetry, according to a new survey from homebuilder Ashton Woods. Respondents to the survey, who are prospective buyers planning to purchase in the next 10 years, picked distressed wood cabinetry as their third most popular choice.

They also said living space is more important to them than bedroom size. Sixty-one percent say they would trade a larger bedroom in order to get a larger living area. Hobby rooms and home offices are also on their priority list, with 67 percent of respondents saying they want an office in their next home.

Source: “Here’s What Buyers of Newly Constructed Homes Want,” The Washington Post (July 26, 2018)

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)

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:

Desperate Buyers ‘Snag Homes Sight Unseen’

Some home shoppers are feeling hopeless this spring and making competitive moves in order to get a home. They’re reportedly rushing to making offers without seeing homes first, bidding well above the asking price, or waiving inspections entirely to get sellers to find their offer the most alluring.

Record low supplies of homes for sale are driving up prices across the country.

As for sellers, they may find some big profits when they do sell. “It’s going to have the feel of a hot market” with multiple offers and bidding wars, says Lawrence Yun, the chief economist for the National Association of REALTORS®. Still, Yun expects sales to be flat compared to a year ago due to the shortage of homes for sale as well as reduced affordability for many house hunters.

Source: “Home Buying Market so Brutal, Some Home Buyers Make Offer Sight Unseen,” USA Today (April 5, 2018)

Home Loan Interest Rates Just Got Higher

“Optimistic testimony on Capitol Hill from Federal Reserve Chairman Jerome Powell sent Treasury yields higher as Powell stated his outlook for the economy has strengthened since December,” says Len Kiefer, Freddie Mac’s deputy chief economist.

“We think strength in the economy and pent-up housing demand should allow U.S. housing markets to post modest growth this year even with higher mortgage rates,” Kiefer says.

Freddie Mac reports the following national averages for the week ending March 1:

  • 30-year fixed-rate mortgages: averaged 4.43 percent, with an average 0.5 point, rising from last week’s 4.40 percent average. Last year at this time, 30-year rates averaged 4.10 percent.
  • 15-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.5 point, rising from last week’s 3.85 percent average. A year ago, 15-year rates averaged 3.32 percent.

Source: Freddie Mac