Despite Everything, Consumer Credit Scores Rise
Sometimes perfectly logical assumptions just don’t pan out.
For homeowners who had planned to sell their Costa Mesa home this year, the sudden advent of the COVID-19 pandemic looked like the worst kind of bad news—what pundits call a “black swan”—the kind of out-of-the-blue event that thoroughly disrupts normal prospects. Sure enough, unemployment numbers soared, and businesses in any number of fields ground to a halt. As if those conditions weren’t damaging enough, for Costa Mesa home sellers, even showing Costa Mesa homes became close to impossible as everyone grappled with finding the best ways to deal with the changing conditions.
Few would have believed that already by summer’s end, residential real estate sales could possibly rebound as dynamically as they did. Logic wasn’t defied—but many assumptions proved to be false.
A similar example has just been provided by the credit industry—one that could affect homeowners planning to sell their Costa Mesa homes. It was reported by Realtor.com web site under the double-take inducing two-sentence headline:
“Coronavirus Tanked the Economy. Then Credit Scores Went Up.”
The credit scores under scrutiny are those of average American consumers who have been faced with a national economy “being pummeled” by the Coronavirus. Their credit scores, calculated after millions lost their jobs and skipped debt payments, registered the “highest since FICO began keeping track in 2005.”
Despite the apparent contradiction, the outcome isn’t without explanation. The first is the unprecedented financial assistance furnished by the government and lenders. That succeeded in helping borrowers to meet their bills. Payment holidays on mortgages, auto, and student loans helped, too. Yet another factor was how homebound consumers took to spending less in general. The Federal Reserve Bank of New York found that 35% of stimulus payments were used to pay down debt. And many also adopted more cautious attitudes toward free-spending credit card use—ultimately lowering total outstanding credit card debt. As one consumer put it, “Covid forced me to really look at my finances.”
For Costa Mesa consumers who maintain strong credit, the continuation of mortgage interest rates at historic lows remains a strong incentive to refinance—or to buy. Call us for any and all Costa Mesa real estate inquiries!
We are built on a philosophy of Heritage & Hustle. The L3 is a full service real estate agency with a regional office located in the heart of #CostaMesa, offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s L3 mission is to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. The L3 was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, The L3 has grown to a full staff of 25 serving over 300 clients a year. The L3 is not limited to serving just its clients; it is also committed to serving the community. Not only has The L3 donated hundreds of hours to many area charities, they have also received the prestige of being named one of the #toprealestatecompaniesinCostaMesa If you’re interested in #buyingorsellinginOrangeCounty, turn to the experts. Turn to The L3 and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact The L3 today at 714-444-4663 or email us at info@thel3.com
