The Christine Galbreath Mammoth Real Estate Blog

Real Estate Update

Real Estate Update From Bank of America

Remember that the Fed has been purchasing $85 billion a month in bonds to help lower unemployment and stimulate the economy overall. Last week, Fed Chairman Ben Bernanke noted that these purchases are by no means on a preset course and that bond buying could be reduced at a faster pace, a slower pace, or even increased for a time, depending on the economic outlook. Bernanke also mentioned the word deflation last week for the first time in recent memory, and this could pave the way for QE to last into 2014.

The bottom line is that the Fed’s decision on QE will be data dependent. If inflation starts to rise and economic reports continue to be strong, the Fed could consider tapering its bond purchases sooner rather than later. Whether this will lead to higher home loan rates, and how much higher, remains to be seen.

Speaking of key data points released last week, the Consumer Price Index rose by 0.5 percent from May to June due to rising prices in gasoline, food, clothing, medical costs and housing. This number was above expectations and the second highest reading this year. It is important to note that the year-over-year Core CPI (the reading that strips out volatile food and energy prices) ticked down a notch, which is likely why the Fed continues to say that inflation remains tame.  

In the housing market, housing starts declined by nearly 10 percent in June from  May to 836,000. This was below expectations and the lowest level since August 2012. The drop was attributed towards a big decrease in apartment construction. Building permits, a sign of future construction, also fell by 7.7 percent, below expectations.

Meanwhile, retail sales in June declined to 0.4 percent from 0.5 percent in May. It’s important to note that retail sales make up 30 percent of consumer spending. The latest Jobs Report showed a lot of part-time jobs were created and confirmed that wages for most people have not increased. Without wage growth, we should not expect any robust retail sales or pickup in economic activity. This is another data point the Fed will be watching as it makes decisions regarding QE.

The above data is nationwide.  Mammoth has low inventory which typically is a marker for a changing market.  While there aren’t a lot of new building permits, the remodels have picked up, as many of the REO’s and short sales that have been purchased, are being renovated.  Interest rates have increased slightly, but current rates coupled with current pricing make now a great time to BUY in Mammoth.

The high altitude in Mammoth makes it an ideal place to train. I am sure you have noticed all the runners in town.  Check out my weekly update for the list of activities and upcoming races.

Mammoth encourages a healthy life style. Why not make it a part of your life style?  Families that play together stay together!

We don’t need more to be thankful for, we just need to be more thankful!

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The 5 Factors of Your Credit Score

5 Factors that Determine Your Credit Score

The higher FICO score you have, the better interest rate you'll get on your mortgage. Your FICO credit score is calculated based on these five categories. For some groups, the importance of these categories may vary; for example, people who have not been using credit long will be factored differently than those with a longer credit history. The three companies that report credit scores to lenders are Equifax, Experion and Transunion.

Your FICO Score only looks at information in your credit report
Your credit score is calculated from your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting.

1. Payment History (35%)

The first thing any lender wants to know is whether you've paid past credit accounts on time.      This is one of the most important factors in a FICO® Score.

2. Amounts Owed (30%)

Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO® Score.

3. Length of Credit History (15%)

In general, a longer credit history will increase your FICO® Score.      However, even people who haven't been using credit long may have a high FICO Score, depending on how the rest of the credit report looks.

Your FICO Score takes into account:

  • how long your credit accounts have been established, including  the age of  your oldest account, the age of your newest account and an average age of all your accounts
  • how long specific credit accounts have been established
  • how long it has been since you used certain accounts

4. Types of Credit in Use (10%)

The score will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

5. New Credit (10%)

Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history.

FICO scores can range from 300-850. Typically, a credit score over 720 is often considered an excellent score.  A score of 680-719 is considered good. A score that falls beween 620-679 will ususally make the lender heavily analayze the file. Having a score that falls between 585-619 will usually disqualify you from getting the best rates. A score below 584 will deter lenders from working with you.

Tips to Increase Your Credit Score:
         - Pay off your bills on time every month.
          -Pay off all of your existing debt.
          -Unused credit cards should not be closed. This can sometimes lower your credit score.
          -Open credit only as needed. Do not open a bunch of new credit card accounts in a short period of time.

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