Good news in some housing markets

Staff Writer
Wayne Post
Wayne Post

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Once again in the week of Aug. 3, the mortgage interest rates hit all-time lows. The 30-year fixed rate dropped to 2.88%, down from 3.60% a year ago, and the 15-year rate fell to 2.44%, down from 2.51% a year ago. Regular readers have heard me say these two things often: First, with those rates, if you qualify and can afford it, this can be a great time to purchase a home, and, second,  if you do, think long and hard about making a few financial sacrifices, and going for that 15-year mortgage, or one that is less than 30 years. You can save a lot of interest, and put those savings to good use for you and your family. Also, it may be a good time to refinance a current mortgage.

These favorable mortgage rates are in part responsible for some good news in some residential real estate markets, which is something that we predicted in this column. As reported by NPR, the National Association of Realtors recently announced that from May to June, just as the COVID -19 crisis was bearing down on the United States and millions of people were losing their jobs, pending home sales rose more than 16%, the biggest rise on record for that period.

In addition to the favorable mortgage rates, the other driving factor, that we anticipated, is the large number of white-collar professionals who are able to work from home, and expect that ability will continue. As a result, they no longer have to live in that city near the office to reduce their commute time, so they now can live in other places, for example places closer to family and more affordable. Interestingly, according to the NPR report, the traffic to listings that are in towns with populations of less than 50,000 people is up 87%, and that there is a clear migration of people out of big cities like New York, Los Angeles, Chicago and San Francisco  to smaller cities. It is also interesting that many people looking for a home are asking about room for a home office and a home gym — yet another thing that we predicted, an increase in the sales of home exercise equipment and more home gyms. If you are like me, you know a lot of people who have purchased home exercise equipment and/or a bicycle, are regularly running and/or walking outside, and are wondering if they will ever return to that gym.

Clearly, this information is interesting, but only if you keep in mind that there are so many Americans who are hurting financially in so many ways, and that there are many Americans who cannot work from home, but must still be where the jobs are.

On a different subject, but related to the question of whether you can qualify for that favorable mortgage or refinance, is the new FICO scores that were to go into effect this summer. They are FICO 10 and FICO 10T, which may replace FICO 9 eventually, but, as has indicated, lending institutions can be slow to change.

Again, according to, if you have a credit score of 680 or higher, and you continue to make on-time payments, and use less than 30% of your available credit each month, your score could increase by 20 points. On the other hand, for those with less than a score of 680, if you miss payments and spend close to your availability each month, your score could drop by 20 points. In both cases, it has been estimated that the changes could affect 40 million consumers.

One thing the new FICO 10 scoring system will do is to penalize consumers who take out loans to consolidate their credit card debt, and then go right back to overspending with their credit cards. Yes, people actually do that, and I saw it all the time when I was a Bankruptcy Judge. Makes you shake your head! One thing the FICO 10T scoring system will do is to look at your debt levels over the prior two years. If you are steadily reducing your debt, your score goes up, but it reduces, if you are steadily increasing your debt.

Remember, your credit scores can affect your ability to get a loan, but also the interest rate you will pay on the loan, as well as other things like your  home and auto insurance premiums, so do whatever you have to in order to have good ones. Pay on time, keep your utilization rate low, and don’t apply for more credit than you really need.

On a different “call me frugal, not cheap” tip, Upstate Bottle Return often pays you 6 cents a bottle, rather than 5 cents, on the sixth of each month. Check it out!

On a final subject, as we know, on March 27, 2020, President Trump signed the CARES Act into law providing broad relief for federal student loan borrowers. It provided for the suspension of payments, a temporary 0% interest rate, and the suspension of any wage garnishments through Sept. 30. There have been some unintended problems with reports to the credit reporting agency, seized tax refunds, slow-to-remove wage garnishments, and questions about being in good standing in loan forgiveness programs that require payments, as the federal government and servicers worked to implement the provisions, but it has provided much needed short-term relief for some borrowers. By the President’s recent Executive Order, these benefits will continue through Dec. 31, 2020.

However, if you have student loan debt, still have a job, and think you’ll be able to financially make it through this pandemic, keep making the student loan payments, and, if you can, pay even more, because with this relief, it all goes straight to pay off the principal.

Next time, we will look at the Greenlight debit card for kids and other apps that are marketed as ways to teach your kids about money.

Stay Safe!

John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at or at