Daily Archives: April 28, 2012

FICO Scores and Mortgages | Katonah NY Homes for Sale

A number of Realtors® responding to the Realtors® Confidence Index March Survey indicated continued tight credit conditions:  in a number of cases prospective home buyers had difficulty in qualifying for a loan.  A comparison of FICO scores for loan transactions as reported by Realtors® responding to the RCI over the February and March time span compared with FICO scores reported by Fannie Mae’s “Acquisition Profile by Key Product Features”—showing mortgage lending and refinancing conditions in the pre-boom normal housing markets of a few years ago– shows that credit availability to lower scoring applicants appears to have declined.  Realtors® provided FICO information based on their understanding of the credit situation; in some cases the information for clients was estimated.  However, overall the data seem to substantiate relatively tight credit conditions.

Credit Scores in Current Markets (Variety of Buyers and Lenders) vs. Fannie Mae Credit Mix of 2001-04.

GDP Growth | Bedford Hills NY Real Estate

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses GDP growth.

  • The economy hit a soft patch in the latest report with GDP growing by only 2.2 percent on an annualized basis.  This all-encompassing measure on everyone’s income all combined needs to grow by at least 3 percent to assure consistent solid growth in jobs.
  • Even though expansion momentum slowed, the economy is in no danger of falling into a recession with people losing jobs on net because the positives clearly outweigh the negatives at the moment.   Consumers have slowly opened their wallets, and consumer spending rose 2.9 percent.  Companies held back spending in the first quarter, but this is likely to be temporary given that corporate cash reserves are sky-high.  And, more importantly, the recovering housing market will add meaningfully to GDP growth this year for the first time in 6 years.
  • On the negative side, military spending cuts led to an overall lower decline in federal government spending.  Spending cuts at state and local governments also forced GDP down.
  • GDP growth rates in the upcoming quarters are expected to be about the same: sluggish to moderate, and neither robust nor contracting.  At this speed, the unemployment rate will likely go down to around 7.8% by the end of the year.