There are certainly more signs that the economy is still not back to normal. Today, the Mortgage Bankers Association (MBA) released it's Weekly Mortgage Applications Survey
http://www.mbaa.org/NewsandMedia/PressCenter/72905.htm for the week ending May 14, 2010. MBA's Vice President of Research and Economics, Michael Fratantoni, summed it up. Home mortgage "Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month", despite relatively low interest rates. The data continues to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this decline occurred even as rates on 30yr fixed rate mortgages have continued to fall and at 4.83% are at their lowest level since November of 2009. Borrowers refinancing did react to the lower rates and refi applications went up almost 15%, hitting their highest level in nine weeks."
If this develops into a trend then the industry's worst fears may come true. Regardless of record levels of affordability purchase demand continues to go down a downward spiral following the expiration of the home buyer tax credit. The next question is where will new business generate if homebuyer demand got exhausted by the expiration of two tax credits? All while this is happening the fact of the matter is that 6.7 million Americans have been unemployed for longer than 27 weeks. This calls special attention to market participants that the broadest measure of unemployment, including discouraged workers and those who are underemployed, rose to 17.1% in April.
http://www.bls.gov/news.release/pdf/empsit.pdf
Not a problem for the Federal Reserve right? Interest rates can stay down - however, this ends up becoming a "I can't qualify" to purchase a home problem.
In my opinion, the Credit Scoring system is a bit outdated. The last time it was seriously revised was back in the 80s. Think about it - is the post sub prime meltdown era we live in today the same economy as it was back in the 80s? CDOs and hybrid investment instruments where not at the same magnitude as we saw several years back. You can learn more about credit here:
http://www.pbs.org/wgbh/pages/frontl...re/scores.html and here
http://ficoforums.myfico.com/fico/bo...essage.id=5048.
If you have bad credit I would strongly recommend getting educated on what you need to do to improve it. Credit not only impacts what you can borrow but is also a big factor for employers during the hiring process. For starters, make your payments and try to pay off any outstanding lines. I would suggest starting with the smaller ones and then moving to the bigger ones. Don't eliminate all your credit cards. 30% of what comprises your credit score includes current credit lines in standing. I hope this helps.
Hybrid Mode
