Mortgage Watch

Mortgage Watch

Millennials lead record FICO score boom

At a certain point you become an adult and things like credit scores matter. Well, 2019 was the year FICO scores hit a record high, mostly driven by millennials who are getting serious about their financial profiles.

According to HouseWire’s Kathleen Howley, “The average U.S. FICO score hit a record high of 703 in 2019, driven by Americans in their 30s, as a strong labor market helped people to pay their bills on time.” She goes on to add that the share of Americans with FICO scores above 700 rose to 59%, the largest ever, Experian said in a report recently.

Experian also reports that millennials who turn ages 24 to 39 in 2020 are now outnumbering Baby Boomers while hitting their “credit stride.” “Their economic emergence is reflected by a 25-point increase in their average FICO score since 2012 – the biggest increase of any generation.”

Approximately 1.2% of Americans had a perfect FICO score of 850, according to Experian, while the number of people with an 850 score has grown 63% in 10 years. Shannon Lois, one of Experian’s analysts, credits this to consumers being more educated about their credit. Of course, a strong labor market doesn’t hurt, hitting a 50-year low of 3.5% three times since September.

Wage growth, however, remains stagnant. The median household income was $65,666 in December, according to a Feb. 6 report by Sentier Research. Adjusted for inflation, that’s a gain of just 1.1% from a year earlier, the report said.

Source: Experian | TBWS

 

 

Rates Currently Trending: Lower

Mortgage rates are moving lower this morning.  Last week the MBS market improved by +29bps.  This was enough to move rates lower last week. We saw extreme rate volatility at the end of the week.

This Week’s Potential Volatility: High

Rates and stocks are plummeting on extreme volatility so far today. The market is hyper-focused on the coronavirus and the surprise move in oil. We expect the rate and overall market volatility to continue throughout the week, as has been the case for a couple of weeks.

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 40 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele, as they continue to offer personal service with an emphasis on achieving his clients' real estate goals. This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 20 years.