negative

Apache is functioning normally

Apache is functioning normally

This statement from the Fed is classic Fed at work.

The Fed has not helped its own cause here, as Austan Goolsbee, president and CEO of the Federal Reserve Bank of Chicago, said in a speech last week: “I’m still trying to process why long-end interest rates are increasing.”

My answer: “Stop talking about raising rate at this stage with a hawkish outlook!”

The Fed has expressed that real yields, meaning where inflation is currently and where rates are, are restrictive to the economy, so sounding hawkish on monetary policy at this stage can lead the bond market to go higher more than the Fed would like. Land the plane, folks, land the plane! 

As you can see in the chart below, it was another wild week in the bond market. Mortgage rates went from 7.39% to a high of 7.65% and ended the week at 7.44%. Before last week the high for mortgage rates this year was 7.49%.


The bond market has been volatile, but after the 10-year yield broke the 4.34% level, I am watching for the 4.63% level. A close above that and follow-through bond market selling could lead to higher mortgage rates. Hopefully, the last two weeks caught the Fed’s attention. If they cared about a soft landing, which I have been skeptical about from the start, as I talked about here on CNBC, the Fed would be more mindful of what they say and do.

Weekly housing inventory data

One of the things I got wrong this year is that I believed if mortgage rates stayed higher for longer, active inventory would grow between 11,000 and 17,000 for at least some of the weeks; that hasn’t happened recently with higher rates — close but no cigar. T

Last week, the growth of active listings slowed to 6,808. Seasonality is kicking in now, but we should be able to continue growing housing inventory like we did last year, as higher rates slow sales down, keeping homes on the market longer.

Last year, the seasonal peak was Oct. 28. Last week, according to Altos Research:

  • Weekly inventory change (Sept.22-29): Inventory rose from  527,938 to 534,746
  • Same week last year (Sept. 23-30): Inventory rose from 556,865 to 561,229
  • The inventory bottom for 2022 was 240,194
  • The inventory peak for 2023 so far is 534,746
  • For context, active listings for this week in 2015 were 1,187,2000

After some volatile weeks with the new listings data, things look similar to earlier in the year when we had an orderly seasonal decline in new listings data, which has been trending at the lowest levels ever for over 13 months. Even with rates spiking, the new listing data hasn’t created another new leg lower. This is important, as I expect flat to slightly positive data soon due to a shallow bar.


Historically, one-third of all homes have price cuts every year. Last week’s price cuts were lower than last year at the same time by 4%. This is happening even with rates over 7% and part of the reason is that housing inventory has been negative year over year since mid-June. As mortgage rates move higher, the percentage of price cuts can grow but it’s trailing last year’s percentage as home sales aren’t crashing like they did last year.

Price cuts for last week over the years:

  • 2021: 29%
  • 2022: 42%
  • 2023: 38%

Purchase application data

Purchase application data was 2% lower last week versus the previous week, making the year-to-date count 17 positive prints, 19 negative prints, and one flat week. If we start from Nov. 9, 2022, it’s been 24 positive prints versus 19 negative prints and one flat week. The week-to-week data has gotten softer since mortgage rates have been trending above 7%. However, it’s not crashing like last year because we are working from a lower bar.

The week ahead: It’s jobs week! (If the government is open)

If we don’t have a government shutdown, the week ahead will be jobs week again! The Fed was happy about labor data last month as job openings have been falling, and the job growth data is cooling down. However, jobless claims are still going strong, so they have more work to do in attacking the labor supply. In addition to jobless claims, this week we will also have job openings, the ADP jobs report, and the BLS Jobs Friday report, which could move the bond market this week.

Also, I will watch this week to see if more Fed members comment about rising long-term rates. The Fed would like to keep rates higher for longer, but if the bond market gets a whiff of any terrible recession data, it will take yields down. So far, jobless claims data hasn’t given them any reason to do so.

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

A huge panel of economists from banks, universities, and investment and research firms weighed in on the direction of U.S. home prices over the next five years.

The consensus was average home price appreciation of 21.99% through 2017, growth that exceeds what Zillow refers to as “pre-bubble rates,” which took place from 1987 to 1999.

During that time period, home prices appreciated annually at a rate of 3.6%, on average.

2013 Strongest of Next Five Years

The 118 panelists indicated that 2013 would be the strongest year in terms of home price appreciation, with values expected to climb an average of 4.6%.

That compares to the 5.5% gain seen in 2012, meaning there should be some moderation despite the positive sentiment.

In 2014, prices are expected to rise another 4.2%, and then dip to between 3.6% and 3.8% for 2015-2017.

All in all, it’s another sign that housing has indeed bottomed, and should slowly work its way back to previous highs seen before the crisis hit.

Who’s the Most Optimistic?

I decided to scour the list of panelists to see first who was included, and second what they thought.

There is an interesting mix of participants on the list, and an even more intriguing divergence of opinion.

Let’s start by looking at who is most confident about home prices going forward, with the cumulative total displayed below:

1. Ethan Penner, Managing Partner at Monday Real Estate Partners – 77.86%
2. David Wyss, Economist at Brown University – 41.53%
3. Christine Chmura / Xiaobing Shuai, Chief Economist / Senior Economist at Chmura Economics & Analytics – 40.22%
4. Rajeev Dhawan, Director, Economic Forecasting Center at Georgia State University – 38.46%
5. Jim Kleckley Director, Bureau of Business Research at East Carolina University – 37.75%
6. Joel Naroff, President at Naroff Economic Advisors Inc. – 37.10%
7. Aneta Markowska, Senior U.S. Economist at Societe Generale – 36.17%
8. Matthew Sippel, Senior Partner at Indus Capital Partners – 35.05%
9. Richard Dorfman, Managing Director at SIFMA – 33.81%
10. Constance Hunter Senior Advisor at International Solutions Network – 32.59%

[Tips for first-time home buyers.]

Who Are the Housing Bears?

Not all panelists were as optimistic as those listed above. In fact, some even feel housing prices will fall over the next five years.

Let’s take a closer look at who thinks housing isn’t the best investment at the moment:

1. John Brynjolfsson, Chief Investment Officer at Armored Wolf, LLC – (11.04%)
2. Mark Hanson, Founder at Hanson Advisors – (8.39%)
3. Gary Shilling, President at A. Gary Shilling & Co. – (5.05%)
4. Barry Ritholtz, CEO at FusionIQ – 7.15%
5. Alex Barron, Founder & Senior Research Analyst at Housing Research Center – 10.36%
6. Komal Sri-Kumar, President at Sri-Kumar Global Strategies, Inc. – 10.38%
7. Parul Jain, Chief Investment Strategist at MacroFin Analytics LLC – 10.41%
8. Paul Ballew, Chief Data and Analytic Officer at Dun & Bradstreet, Inc. – 10.84%
9. Ellen Zentner / Aichi Amemiya, Senior Economist / VP at Nomura Securities International, Inc. – 12.03%
10. Ihab Seblani, Economist at AIG Global Economics – 12.42%

As you can see, the panelists exhibit quite a range in outlook, with some so negative they actually expect home prices to be down five years from now.

However, the lion’s share of panelists sound pretty darn positive, if the numbers are any indication.

Overall, the most optimistic quartile of panelists predict a 6.1% increase in home prices this year, while the most pessimistic quartile sees an average increase of three percent.

When looking at the five-year cumulative total, projections ranged from 11.7% among the most pessimistic quartile to 34.2% among the most optimistic.

For the record, Zillow chief economist Stan Humphries sees home prices rising 18.42% over the five-year period.

You can see the complete list here. There are some other interesting names on the list not mentioned in this post.

As always, you should take anyone’s opinion with a grain of salt.  Plenty of so-called experts were wrong leading up to the past crisis, and many will be wrong again. That’s just life.

Also note that this covers national home prices, and that values will vary widely by city, region, etc.

Read more: Preparing for the seller’s market.

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

There are two sides to inflation for consumers: The rising cost of goods and services means that the basic cost of living rises for most people. But the right amount of inflation can spur production and economic growth.

Deciding whether inflation is good or bad therefore depends on how various factors might play out in different economic sectors.

What Is Inflation?

Inflation is an economic trend in which prices for goods and services rise over time. The Federal Reserve uses different price indexes to track inflation and determine how to shape monetary policy.

Generally speaking, the Fed targets a 2% annual inflation rate as measured by pricing indexes, including the Consumer Price Index. Historically, though, the inflation rate has been about 3.3%.

Rising demand for goods and services can trigger inflation when there’s an imbalance in supply. This is known as demand-pull inflation.

Cost-push inflation occurs when the price of commodities rises, pushing up the price of goods or services that rely on those commodities.

Asking whether inflation is bad isn’t the right lens for this economic factor. Inflation can have both pros and cons for consumers and investors. Understanding the potential effects of inflation can maximize the positives while minimizing the negatives.
💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

Is Inflation Good or Bad?

Answering the question of whether inflation is good or bad means understanding why inflation matters so much. The Federal Reserve takes an interest in inflation because it relates to broader economic and monetary policy.

Some level of inflation in an economy is normal, and an indication that the economy is continuing to grow. While inflation has remained relatively low over the past decade, it has historically seen the most change during or right after recessions.

The Fed believes that its 2% target inflation rate encourages price stability and maximum employment.

Recommended: 7 Factors That Cause Inflation

Broadly speaking, high inflation can make it difficult for households to afford basic necessities, such as food and shelter. When inflation is too low, that can lead to economic weakening. If inflation trends too low for an extended period of time, consumers may come to expect that to continue, which can create a cycle of low inflation rates.

That sounds good, as lower inflation means prices are not increasing over time for goods and services. So consumers may not struggle to afford the things they need to maintain their standard of living. But prolonged low inflation can impact interest rate policy.

The Federal Reserve uses interest rate cuts and hikes to keep the economy on an even keel. For example, if the economy is in danger of overheating because it’s growing too rapidly, or inflation is increasing too quickly, the Fed may raise rates to encourage a pullback in borrowing and spending.

Conversely, when the economy is in a downturn, the Fed may cut rates to try to promote spending and borrowing.

When both inflation and interest rates are low, that may not leave much room for further rate cuts in an economic crisis, which may spur higher employment rates. If prices for goods and services continue to decline, that could lead to a period of deflation or even a recession.

So, is inflation good or bad? The answer is that it can be a little of both. How deeply inflation affects consumers or investors — and who it affects most — depends on what’s behind rising prices, how long inflation lasts, and how the Fed manages interest rates.

What Is Core Inflation?

Core inflation measures the rising cost of goods and services in the economy, but excludes food and energy costs. Food and energy prices are notoriously volatile, even though demand for these staples tends to remain steady.

Both food and energy prices are partly driven by the price of commodities — which also tend to fluctuate, owing to speculation in the commodities markets. So the short-term price changes in these two markets make it difficult to include them in a long-term reading of inflationary trends: hence the core inflation metric.

The Consumer Price Index and the core personal consumption expenditures index (PCE) are the two main ways to measure underlying inflation that’s long term.

Who Benefits from Inflation?

The Federal Reserve believes some inflation is good and even necessary to maintain a healthy economy. The key is keeping inflation rates at acceptable levels, such as the 2% annual inflation rate target. Staying within this proverbial Goldilocks zone can result in numerous positive impacts for consumers and the economy in general.

That said, the core inflation rate began to climb out of that range in Q1 of 2021, and reached a peak of about 9.02% in June 2022. As of Q3 2023, the inflation rate has eased down in the 4.0% range, according to data from the Consumer Price Index.

Inflation Pros

Sustainable inflation can yield these benefits:

•   Higher employment rates

•   Continued economic growth

•   Potential for higher wages if employers offer cost-of-living pay raises

•   Cost-of-living adjustments for those receiving Social Security retirement benefits

The danger, of course, is that inflation escalates too rapidly, requiring the Federal Reserve to raise interest rates as a result. This increases the overall cost of borrowing for consumers and businesses.

Who Is Inflation Good For?

Inflation can benefit certain groups, depending on how it impacts Fed shapes monetary policy. Some of the people who can benefit from inflation include:

•   Savers, if an interest rate hike results in higher rates on savings accounts, money market accounts or certificates of deposit

•   Debtors, if they’re repaying loans with money that’s worth less than the money they borrowed

•   Homeowners who have a low, fixed-rate mortgage

•   People who hold investments that appreciate in value as inflation rises

💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

Who Does Inflation Hurt the Most?

Some of the negative effects of inflation are more obvious than others. And there may be different consequences for consumers versus investors.

Inflation Cons

In terms of what’s bad about inflation, here are some of the biggest cons:

•   Higher inflation means goods and services cost more, potentially straining consumer paychecks

•   Investors may see their return on investment erode if higher inflation diminishes purchasing power, or if they’re holding low-interest bonds

•   Unemployment rates may climb if employers lay off staff to cope with rising overhead costs

•   Rising inflation can weaken currency values

Inflation can be particularly bad if it leads to hyperinflation. This phenomenon occurs when prices for goods and services increase uncontrolled over an extended period of time. Generally, this would mean an inflation growth rate of 50% or more per month. While hyperinflation has never happened in the United States, there are many examples from different time periods around the world: For example, Zimbabwe experienced a daily inflation rate of 98% in 2007-2008, when prices doubled every day.

Recommended: How to Protect Yourself From Inflation

Who Is Inflation Bad For?

The negative impacts of inflation can affect some more than others. In general, inflation may be bad for:

•   Consumers who live on a fixed income

•   People who plan to borrow money, if higher interest rates accompany the inflation

•   Homeowners with an adjustable-rate mortgage

•   Individuals who aren’t investing in the market as a hedge against inflation

Inflation and higher prices can be detrimental to retirees whose savings may not stretch as far, particularly when health care becomes more expensive.

If the cost of living increases but wages stagnate, that can also be problematic for workers because they end up spending more for the same things.

Recommended: Cost of Living by State Comparison (2023)

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How to Invest During Times of Inflation

While inflation is an investment risk to consider, some investing strategies can help minimize its impact on your portfolio.

How to Protect Your Money From Inflation

The first step is to understand that inflation rates may be variable from year to year, but the upward trend in the cost of goods and services is typically a factor investors must contend with. Essentially, if inflation is historically about 2% per year, it’s ideal to look for returns above that.

For example, while savings accounts may yield more interest if the Fed raises interest rates, investing in stocks, exchange-traded funds (ETFs) or mutual funds could generate higher returns, though these investments also come with a higher degree of risk.

•   Diversification. Having a diversified portfolio that includes a mix of stock and bonds and other asset classes may help mitigate the impact of inflation.

•   Always be aware of investment costs and the impact of taxes and fees. Minimizing investment costs is a time-honored way to keep more of what you earn.

•   Investing in Treasury-Inflation Protected Securities (TIPS). TIPS are government-issued securities designed to generate consistent returns regardless of inflationary changes.

•   If prices are rising, that can increase rental property incomes. You could benefit from that by investing in real estate ETFs or real estate investment trusts (REITs) if you’d rather not own property directly.

•   Compounding interest allows you to earn interest on your interest, which is key to building wealth.

•   Dollar-cost averaging means investing continuously, whether stock prices are low or high. When inflationary changes are part of a larger shift in the economic cycle, investors who dollar-cost average can still reap long term benefits, despite rising prices.

The Takeaway

Inflation is unavoidable, but you can take steps to minimize the impact to your personal financial situation. Building a well-rounded portfolio of stocks, ETFs and other investments is one strategy for keeping pace with rising inflation. Being aware of how taxes and fees can impact your returns is another way to keep more of what you earn.

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FAQ

How is economic deflation different from inflation?

Deflation is when the cost of goods and services trends downward rather than upward (the sign of inflation). Deflation can be positive for consumers, as their money goes further, but prolonged deflation can also be a sign of a contraction.

How do homeowners benefit from inflation?

Typically tangible assets like real estate tend to increase in value over time, even in the face of inflation. Currency, on the other hand, tends to lose value.

How does the government measure inflation?

The Bureau of Labor Statistics produces the Consumer Price Index (CPI), based on the change in cost for a range of goods and services. The CPI is the most common measure of inflation.

Photo credit: iStock/AJ_Watt

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Apache is functioning normally

Apache is functioning normally

Generally, the credit bureaus consider anything over 670 a good credit score.

Considering applying for a new line of credit like a mortgage or credit card, but not sure how your credit score stacks up? If your score is 670 or higher, you’re doing fairly well. The best credit score and the highest credit score possible is 850 for both FICO® and VantageScore® models. FICO considers a score between 800 and 850 to be “exceptional,” while VantageScore considers a score above 780 to be “excellent.” It’s possible to get an 850 credit score, but it’s tough to achieve.

In This Piece

What Is a Good Credit Score?

A good credit score will depend on the scoring model, but either 670 or above would be considered good. Credit scores calculated using the FICO or VantageScore 3.0 scoring models range from 300 to 850. Those scores are broken down into five categories, though the breakdowns differ slightly. Since they have somewhat different range calculations, what’s considered good for VantageScore may be considered fair for FICO, and what’s considered very good for FICO may only be good by the VantageScore model.

FICO and VantageScore aren’t the only credit scoring models. However, they are the most commonly used models and the ones used by the three major credit bureaus: Experian®, Equifax® and TransUnion®. Some lenders even have their own scoring models. But most lenders and credit card companies use FICO scores or VantageScores.

What Is a Good FICO Score?

For FICO, a good credit score is 670 or higher. A score over 739 would be considered very good, while a score above 800 is considered exceptional—the highest designation possible aside from a perfect 850.

What Is a Good VantageScore?

In the VantageScore 3.0 model, a good score is 661 or higher. Since this model doesn’t have a designation between good and excellent, the range of good scores is much wider than it is for FICO. Excellent scores start at 781 rather than 800 in this model, with 850 also being considered a perfect score.

Understanding Credit Score Ranges

The credit score ranges vary depending on whether you’re looking at a FICO score or a VantageScore. They line up fairly similarly, but their score designations have different labels — FICO lacks a “very poor” designation, while VantageScore lacks a “very good” range. Here’s how they break down.

FICO Score Range

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very Good: 740-799
  • Exceptional: 800-850

VantageScore Range

  • Very Poor: 300-499
  • Poor: 500-600
  • Fair: 601-660
  • Good: 661-780
  • Exceptional: 781-850

Credit Score Range Chart

To give you a clear idea of how FICO and VantageScore’s credit score ranges compare, here’s a comparison credit score range chart.

What Are Credit Scores?

The three-digit figures called credit scores are what scoring institutions use to rate your credit profile based on your credit report. Since these bureaus have their own records, your score might differ from one scoring institution to the next.

Your score suggests to potential creditors how likely you could be to repay a loan, pay off a credit card, make late payments, and default on payments. Basically, it helps them determine whether you’re an acceptable risk and if they should approve your application for a loan or credit card. A low score doesn’t always mean lenders will decline your application. Instead, it might mean they’ll consider approving you with higher interest rates or less favorable loan terms.

How to Get a Good Credit Score

VantageScore and FICO scores are calculated using similar information. Each model may use slightly different terms for these, but here’s what they’re looking for.

Payment History

FICO weight: 35 percent

VantageScore weight: 40 percent

Late and missed payments can have a major impact on your credit score. Both FICO and VantageScore take your history of payments into account when calculating your score and look at your number of late payments, the number of accounts you’ve missed payments on, and the overall number of missed payments. Maintaining a consistent, on-time payment history goes a long way in establishing good credit.

Amounts Owed/Credit Utilization

FICO weight: 30 percent

VantageScore weight: 20 percent

Credit utilization is calculated as a ratio. It divides the amount of credit you’ve used by your total credit limit. If your credit limit is $5,000, for example, and you use $2,000 in credit, your utilization rate is 40 percent. It’s recommended to keep this rate to 30 percent or less and preferably below 10 percent. To help improve your credit score, try to reduce your utilization ratio if you often find yourself going above 30 percent.

Length of Credit History/Credit Age

FICO weight: 15 percent

VantageScore weight: 21 percent

Your credit history refers to the amount of time your credit accounts have been open, averaged across all of your accounts. That means that if your credit history has factored in your oldest account for the last 15 years but you suddenly close that account, your average credit age will drop accordingly, which could also lead to a drop in your credit score.

For that reason, it’s a good idea to maintain your oldest credit accounts. As a rule of thumb, try to make sure you have one account that’s six months old or older open at all times.

Credit Mix

FICO weight: 10 percent

VantageScore weight: N/A

Your credit mix refers to the number of revolving and installment accounts you have open. Here’s how those accounts differ:

  • Installment accounts: These are essentially defined long-term loans like home mortgages or vehicle financing on which you make payments in specified amounts over a predetermined period.
  • Revolving accounts: These types of accounts set a specific amount of credit you can use as needed, such as a credit card. You only pay back the amount of credit you borrow against this limit.

Potential lenders will want to know you can manage both of these account types, so it helps to have a history of successfully managing each. While FICO has a category explicitly for this, VantageScore does not—though it still may factor into other elements of your VantageScore. As such, it can be helpful to have multiple types of accounts in good standing regardless of the scoring model.

New Credit/Recent Credit

FICO weight: 10 percent

VantageScore weight: 5 percent

Opening multiple new credit accounts in a short period of time can have a negative impact on your credit score. Since lenders may see it as a red flag for a borrower to have several recent accounts open, it may be helpful to let your current accounts continue aging while paying them off consistently if you want to maintain or improve your score.

Balances and Available Credit

FICO weight: NA

VantageScore weight: 14 percent

Though only VantageScore has categories specifically for balances (11 percent) and available credit (3 percent), they still play a role in your FICO credit score. The amount of money you owe to lenders and your available credit factor into credit history and utilization rate, so keeping your balances low in comparison to your available credit can be a good idea when trying to achieve a good credit score.

A Note on Credit Inquiries

A hard credit inquiry gets pulled when a lender requests your credit report to assess your creditworthiness. This type of inquiry can drop your score by as much as 5 to 10 points and may stay on your credit report for up to two years, but it will impact your score for only 12 months. To get and maintain good credit, it’s best to avoid these as much as possible.

If you need to apply for multiple credit accounts in a short time or want to shop around for loan rates, it can help to keep those applications within a 14-45-day window so they get grouped into one inquiry. FICO and VantageScore differ on this, with FICO using 45 days and VantageScore using only a 14-day span.

Keep in mind this is only for hard inquiries, as soft inquiries shouldn’t affect your score.

How Lenders Use Credit Scores

Credit scores can offer a gauge of creditworthiness for lenders to determine things like whether or not to approve you for a credit line, how much credit to approve you for, and what your interest rate should be. But while your credit score has a big role to play in this, it’s considered alongside your credit report. Lenders may also consider your income, debt, and your ratio of debt to income.

How Can I Get My Credit Scores?

You can request a full credit report from all three credit bureaus from AnnualCreditReports.com, however, your score is not included with your report.

Most online options for viewing your credit score—free or paid—are limited to one or two scores. ExtraCredit from Credit.com takes it twenty-six steps further by offering you 28 of your FICO scores from all three major credit bureaus. When you sign up for an ExtraCredit account, you can also earn money when you get approved for select offers, monitor your accounts with $1 million identity theft insurance, and get exclusive discounts froma leader in credit repair services. All for one low monthly price.

If you’re not ready for ExtraCredit, Credit.com also offers a free Credit Report Card. This comes especially in handy as it offers you your Experian VantageScore 3.0 credit score for free.

FAQs about Good Credit Scores

Want to know more? Here are a few common questions about what good credit scores are and how they’re used.

Do Lenders Prefer a Good VantageScore Score over a Good FICO Score?

Lenders don’t necessarily prefer one score over the other. It’s likely, though, that a given lender uses only one credit-scoring institution. FICO reports that 90% of the top U.S. lenders use FICO scores when deciding whether to loan money to an applicant. On the other hand, VantageScore states that between March 2021 and February 2023, approximately 14.5 billion VantageScore credit scores were used.

Both models are consistent enough that knowing where you stand in one gives you a reliable indication of your credit in general.

What Is a Good Credit Score to Buy a House?

A FICO score of 580 is the minimum credit score required to qualify for maximum financing. , according to the U.S. Department of Housing and Urban Development. Below 580, borrowers will have to make a minimum downpayment of 10 percent. That doesn’t necessarily mean that you’re guaranteed to qualify for a loan with maximum financing with a score of 580 or above, but it’s what you’ll need if you want the flexibility of a lower down payment.

What Is the Highest Credit Score?

850 is the highest credit score possible for both the FICO and VantageScore models.

What Is Credit?

Credit is access to capital provided by a lender with an expectation that it will be repaid within an agreed time frame. This could be a set installment account—such as a mortgage or car loan that gets paid off gradually—or a revolving account like a credit card with a maximum balance that can be borrowed at a given time.

What if I Don’t Have a Good Credit Score?

Now that you know what’s a good credit score, it’s crucial to act on yours. If your credit is fair or poor, find out why. Then you can address the factors and work to improve your score.

Do you need more credit history? Check out our ExtraCredit Build It feature! Use ExtraCredit to report rent and utility bills you’re already paying and add them to your credit profile as tradelines. This allows the credit bureaus to see additional payment information from you, which can help you build your credit profile.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

Some investment terms and definitions may seem complex, but a little research can take the mystery out of most common investing terminology. That can help investors feel even more confident about starting their investing journey. It’s more or less the same as starting any new endeavor — from rock climbing to investing — at first, you need to get familiar with new words and phrases.

Given the girth of the investment space, the sheer amount of investment terminology investors need to know can be intimidating. But the more you read, invest, and envelope yourself in it, the easier it’ll become. If you’re just starting out, though, it may be helpful to get a big rundown of some of the more common investing terms.
💡 Quick Tip: How do you decide if a certain trading platform or app is right for you? Ideally, the investment platform you choose offers the features that you need for your investment goals or strategy, e.g., an easy-to-use interface, data analysis, educational tools.

Investment Terminology Every Beginner Investor Needs to Know

Here are a slew of common investing terms and definitions (in alphabetical order) that investors may benefit from committing to memory.

1. Alpha

Alpha is used to gauge the success of an investment strategy, portfolio, portfolio manager, or trader compared with a relevant benchmark. You may also hear alpha defined as “excess return” in that it refers to returns that can be attributed to active management, over and above market returns.

2. Assets

An asset is anything that holds value that can be converted to cash. Personal assets might include your home, a car, other valuables. Business assets might include machinery, patents. When it comes to investing, assets are typically the securities you invest in.

3. Asset Class

An asset class is a group of investments with similar characteristics that is likely to perform differently in the market than another asset class. Types of asset classes include stocks, bonds, real estate, currencies, and more. Given the same market conditions, stocks and bonds often move in opposite directions. Most financial advisors typically recommend you invest in multiple asset classes in order to have a well-diversified portfolio and minimize risk.

4. Asset Allocation Fund

An asset allocation fund is a diversified portfolio consisting of various asset classes. Most asset allocation funds have a mix of stocks, bonds, and cash equivalents. These types of funds can be popular as some advisors stress the importance of having diverse portfolios to minimize potential losses.

5. Beta

Beta refers to how risky or volatile a security or portfolio is compared with the market overall. Calculating the beta of the stocks in your portfolio can help you determine how your portfolio might respond to market volatility. You can also gauge the beta of a stock to help determine how much risk it might add to your portfolio.

6. Bear Market

A bear market occurs when the market declines, typically when broad market indexes fall 20% or more in two months or less. Bear markets can accompany a recession, but not always. They often signal that investors feel pessimistic about their investments’ ability to make money and the market’s ability to rebound.

7. Bull Market

A bull market is the opposite of a bear market, meaning prices are rising or are expected to rise for extended periods of time. Bull markets usually mean security prices are rising for months or even years at a time.

8. Blue Chip

Blue chip companies are generally thought to be well-established, financially sound, and therefore high-quality investments. Blue chip stocks are typically large companies, and many of them are household names. In some cases, blue chips may be more expensive to invest in since they can be considered relatively stable and likely to grow.

9. Bonds

When governments or corporations need to borrow money they issue bonds. Investors who buy the bonds are effectively loaning that entity cash, which will be repaid according to the terms of the bond (e.g. a 10-year bond with an interest rate of 3%). Bonds are often considered to be relatively stable, lower-risk investments compared with stocks.

10. Broker

An investment broker, whether a person or a firm, acts as a middleman to help investors buy and sell securities. Brokers may be necessary because some securities exchanges only allow members of that exchange to make an investment order. A broker’s primary function is to help clients place trades, although many brokers also help clients with market research and investment planning.

11. Diversification

You’ve probably heard that you should aim to have a diversified portfolio. That means investing in a range of asset classes that are likely to behave differently under different market conditions, in order to mitigate risk. A portfolio of only stocks, for instance, could be more vulnerable to market volatility than a portfolio that also included bonds, real estate, commodities, and so on.

12. Dividends

When a company shares their profits with investors, these are called dividends. Dividends are often paid in cash (although they can be paid in stocks). Some companies — e.g. many blue chip firms — pay dividends, but not all companies do. Ordinary dividends are taxed differently than qualified dividends, so you may want to consult a tax professional if you own dividend-paying stocks.

13. Dollar Based Investing

Also called fractional share investing, dollar based investing is a way for investors to buy partial shares of stocks. Instead of buying shares of a company, you instead invest a dollar amount. Dollar based investing is a great way for smaller investors to buy into popular companies that they may otherwise be priced out of.

14. EBITDA

EBITDA is a way to evaluate a company’s performance that is considered more precise than simply looking at net income. EBITDA stands for: earnings before interest, taxes, depreciation, and amortization. To calculate EBITDA, use the following formula: Net Income + Interest + Taxes + Depreciation + Amortization.

15. EBIT

EBIT is a simpler way to calculate a company’s profits than EBITDA, as it’s only one part of the EBITDA equation (literally!). It stands for “earnings before interest and taxes.” It’s calculated using this formula: Net Income + Interest + Taxes.

16. EPS

EPS stands for earnings per share, which is a common way investors measure how well a stock is performing. EPS is calculated by finding a company’s quarterly or annual net income and dividing it by the company’s outstanding shares of stock. Increases in EPS can be a sign that the company’s profit performance is on the upswing, whereas a decrease can be a red flag for investors.

17. ETF

Exchange-traded funds, or ETFs, are similar to mutual funds in that the fund’s portfolio can include dozens or even hundreds of different securities, and investors buy shares of the fund. Unlike mutual funds, ETF shares can be traded like stocks throughout the day (mutual fund shares are traded once a day). Most ETFs are considered lower-cost, passive investments because they track an index, although there are actively managed ETFs.

18. Expense Ratio

An expense ratio is an annual fee investors pay to cover the operating costs of mutual funds, index funds, ETFs and other types of funds. Fees are typically deducted from your investments automatically (you don’t pay a separate charge), and they can reduce your returns over time so it’s wise to shop around for lower fees. Expense ratios are calculated using this formula: Total Funds Costs / Total Fund Assets Under Management.

19. FCF

Free cash flow is the money a company has after it has paid its expenses. This number is important to investors because it can show them how likely it is that a company could have extra cash for dividends or share buybacks. A continuous decrease in free cash flow over a few years can also be a red flag to investors.

20. Growth Stock

Growth stocks are shares in a company that’s growing faster than its competitors, typically showing potential for higher revenue or sales. Growth stock companies may be considered leaders in their industry.

21. Hedge Fund

Hedge funds are usually managed by an LLC or limited partnership that invests in securities and other assets using money from multiple investors. Hedge funds tend to be more risky and expensive than mutual funds or ETFs, which often makes them accessible to more wealthy investors.

22. Index Fund

Index funds are a type of mutual fund that invest in securities that mirror a particular index, such as the S&P 500 Index or the MSCI World Index. Indexes track many different sectors, from smaller U.S. companies to big global companies to various kinds of bonds. Each index acts as a proxy for how that market sector is performing; the corresponding index funds reflect that performance.

23. Interest Rate

The interest rate is the amount a lender charges to borrow money — and it can also mean the amount your cash earns in a savings, money market or CD account. The baseline interest rate in the U.S. is set by the Federal Reserve. This rate in turn influences savings rates, mortgage rates, credit card rates, and more. Generally, when the Federal Reserve lowers interest rates, the stock market tends to rise.

24. Large Cap

A large-cap company has $10 billion or more in market capitalization. These companies are often considered industry leaders, and are relatively conservative, low-risk, and safe investments. A company’s stock may be considered large cap, mid cap, or small cap.

25. Market Cap

Market capitalization, or market cap, is the value of a company’s total outstanding shares. It’s often used to measure a company’s value and build a diversified portfolio. You can calculate market cap by multiplying the number of outstanding shares by the current price per share. Companies with lower market caps usually have more room to grow and usually are associated with newer companies, meaning they can also be riskier.

26. Mid Cap

Mid-cap companies are usually between $2 billion to $10 billion in market capitalization, putting them somewhere between small- and large-cap companies. Many mid-cap companies are in a growth phase, making them attractive to some investors who believe the company may grow into a large-cap over time, although this is not guaranteed to happen.

27. Mega Cap

Mega-cap companies are the largest companies you can invest in, with a market value of $1 trillion or more. Mega-cap stocks are typically industry leaders and household name brands.

28. Mutual Fund

Mutual funds may invest in stocks, bonds, and other securities — or a combination of these (e.g. a blended fund). Mutual funds can also be industry-specific (such as a mutual fund consisting only of energy stocks, green bonds, or tech companies, and so on).

29. Net Income

When talking about investing, net income usually refers to how much a company makes (or its total losses) after it has paid all its expenses. Net income is therefore usually calculated by subtracting a company’s expenses from its revenue. Investors may want to know a company’s net income because it can help determine how profitable the company is, although EBITDA (defined above) is another measure.

30. Over-the-Counter Stocks

Not all stocks are publicly traded. These “private” stocks, often called over-the-counter stocks, usually have to be traded through a broker. Companies may offer OTC stocks if they don’t meet the requirements to be traded publicly. Such companies are often startups or other small companies. So, while these companies may eventually grow to be able to trade publicly, investing in them also carries the risk that they may fold or even engage in fraudulent activity since the market is far less regulated than publicly traded markets are.

31. Price-to-Earnings Ratio

Investors commonly use P/E, or price-to-earnings ratios, to gain insight into how profitable a company is compared to its stock price. In other words, price-to-earnings ratios can help investors decide if the price of a stock is worth it when compared to how much a company is making.

32. Prime Interest Rate

Banks are likely to offer their best customers — those with the best credit histories and the lowest risk of defaulting — a prime interest rate for a loan. The prime interest rate is generally the lowest rate the bank will offer. A bank’s criteria for determining their prime interest rate may vary, but most banks consider the federal funds rate when setting any interest rate.

33. Portfolio Management

Portfolio management simply refers to how you select and manage the investments in your portfolio. There are many different management styles, such as active or passive, growth or value. Additionally, you can elect to manage your own portfolio or hire an individual or group to manage it for you.

34. Preferred Stock

A preferred stock means investors own shares in a company and get scheduled dividends, similar to how bond interest payments work. Preferred socks may not fluctuate in price like common stocks do, meaning they are often less volatile and risky.

35. Profit & Loss Statement

You probably know what profit and losses are, but do you know how to read a company’s P&L, or profit & loss statement? It can help you determine a company’s bottom line, as it can show you how well a company is doing compared to its peers in the same industry. If you’ve never read one before, this article about profit & loss statements could give you some tips on what to look for.

36. Prospectus

Companies that offer stocks, bonds, and mutual funds to investors are required to file a prospectus with the Securities and Exchange Commission that provides details about the investment they are offering (e.g. the expense ratio, the constituents of a fund, and more). Investors can use the prospectus to better understand a given security and how it might fit in their portfolio, or not.

37. Recession

A recession is a period of economic contraction. The National Bureau of Economic Research (NBER) defines a recession further as a decline in monthly employment, personal income, and industrial production. As an investor, a recession may indicate a drop in the value of your portfolio, although this may be temporary: When looking at the history of U.S. recessions, the stock market has always rebounded, sooner or later, after recessions.

38. REIT

Real estate investment trusts (REITs) are a way that investors can further diversify their portfolios. Instead of having the responsibility of managing an investment property yourself, you can invest in REITs, which are generally large-scale real estate projects that investors can help fund in exchange for partial ownership. Most REITs are publicly traded and pay dividends to investors.

39. Retained Earnings

When looking for a company’s net income statement, you may come across the term “retained earnings,” also sometimes called unappropriated profit, uncovered loss, member capital, earnings surplus, or accumulated earnings. In general, retained earnings is the amount of money a company keeps and potentially reinvests after it gives its investors a dividend payout.

As an investor, knowing whether a company had positive retained earnings can help you determine how much money it has to continue growing. If its retained earnings are negative, that could be a sign the company is in debt and may not be a good investment.

40. Return on Equity

Return on equity, sometimes called return on net worth, can help investors compare how well companies are managing their stockholders’ contributions. You can calculate it using this formula: Net income/Average shareholder equity. A higher return on equity can signal to investors that a company is managing its money efficiently.

41. ROI

Return on investment (ROI) is just that: the return you get after making an investment in a stock, bond, mutual fund, and so forth. Investors generally hope for a positive ROI, meaning that their investment has made a profit. While a good ROI will vary depending on the type of investments you’re making, some investors look to the historic return of the stock market (about 7% annually) as a barometer.

42. Small Cap

A small-cap company usually has a market cap of $250 million to $2 billion. Investors may be attracted to a small-cap company because they believe it has growth potential or may be undervalued.

43. SPAC

SPAC stands for special purpose acquisition company. SPACs are shell companies that list shares on an exchange to raise money so they can merge with a privately held company. Once the merger between the public SPAC and the private company is complete, that company is now in effect a public company — which is why a SPAC is sometimes called a backdoor IPO. Many companies may elect to use SPACs instead of traditional IPOs because they are often faster and less expensive.

44. Stocks

If you’ve made it this far, you probably know what a stock is. To review, a stock is a way to buy a piece of ownership into a company. You can buy and sell your stocks depending on whether you anticipate your stocks will decrease or increase in value.

45. Stock Exchange

A stock exchange is the place where you buy, sell, or trade stocks. Common U.S. stock exchanges are the New York Stock Exchange (NYSE) and the Nasdaq.

46. Stop-Loss Order

A stop-loss order can help investors have more control over their stocks. When a stock reaches a certain price that you choose, your broker will sell, buy, or trade that stock. Having a stop-loss order can help you limit how much money you make or lose in the stock market.

47. Target Date Fund

A target date fund is a type of mutual fund that includes a mix of asset classes to provide investors with a portfolio that adjusts over time to become more conservative as they age. Target date funds are often used to help investors plan their retirements. Target funds are typically constructed around various target retirement years (e.g. 2030, 2040, 2050) so investors can pick a date that corresponds with their hoped-for retirement.

48. Value Stock

A value stock is a stock that investors believe is undervalued and/or inexpensive compared to its past prices on the stock market or with its competitors. Investors may consider a stock’s price-to-earnings ratio to help them determine if something is a value stock.

49. Venture Capital

Venture capital is money a startup uses to grow its business. This money usually comes from private investors or venture capital firms. Investors may elect to invest venture capital into startups they believe have the potential to be profitable with time.

50. Yield

Yield is another way of referring to the return of an investment over a set period of time, expressed as a percentage. You may hear the term in relation to bonds (e.g. high-yield bonds), but yield is more accurately a measure of the cash flow an investor gets on the amount they invested in a security during that time period, and is different from total return.
💡 Quick Tip: The best stock trading app? That’s a personal preference, of course. Generally speaking, though, a great app is one with an intuitive interface and powerful features to help make trades quickly and easily.

The Takeaway

Getting familiar with a few key investing words and phrases can go a long way in helping you gain confidence when you’re new to investing. Getting fluent with investing terminology is like any other pursuit — there’s a learning curve at first, but the terms will feel more natural as you move forward and start investing regularly.

Learning key investing terms and definitions is only the beginning, though. Putting your knowledge into practice is another thing entirely. Although, it is helpful to know the lingo before diving into investing.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

What are the main investment types?

There are many types of investments, but perhaps the main investment types would include stocks, bonds, funds (mutual funds, index funds, exchange-traded funds), and options, though there are more.

What is the basic rule of investing?

There are many guidelines investors might want to follow, but the basic rule of investing is that you shouldn’t invest more than you’re comfortable losing – which is associated with an investor’s risk tolerance.

Photo credit: iStock/akinbostanci

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For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

Apache is functioning normally

Apache is functioning normally

Your credit score is an important aspect of your financial health and is oftentimes used by lenders, landlords, and even employers to determine your creditworthiness. It’s crucial to keep track of your credit score regularly, but many people are hesitant to check it because they’re afraid it will have a negative impact.

Fortunately, there are several ways to check your credit score without hurting it, and in this article, we’ll explore some of the most effective ways to do it. Whether you’re applying for a loan or simply want to stay on top of your credit score, these tips will help you access your credit information without causing any harm.

In This Piece:

Key Findings:

  • There are many ways to check your credit for free and without penalty
  • Personally checking your credit score is considered a soft inquiry and won’t hurt it
  • A hard inquiry, which is when a lender checks your credit report, could slightly lower your score
  • If possible, avoid authorizing too many hard inquiries in a short period to prevent negatively impacting your credit score

Can Checking Your Credit Score Hurt It?

Checking your credit score will not hurt it. When you check your credit score, it is considered a “soft inquiry,” which means it does not negatively impact your score.

However, if a lender or creditor checks your credit score as part of a credit application or loan, it is considered a “hard inquiry,” which can potentially lower your score by a few points. Remember that while a few points may not seem like a lot, they could make a difference in whether or not you get approved for credit and what interest rate you receive.

Therefore, it’s a good idea to only apply for credit when you need it to avoid hard inquiries on your report and to monitor your credit score regularly to catch any errors or fraudulent activity.

Hard vs. Soft Inquiries  

Soft inquiries have no impact on your credit and can be done anytime. Hard inquiries, also known as hard pulls, are typically made by lenders and other financial institutions and can harm your credit score. Below we’ll outline the differences between the two and give examples of when each inquiry might appear on your report.

What’s a Hard Inquiry? 

A hard inquiry is a credit check that occurs when a lender or creditor reviews your credit report as part of a credit application or loan. Hard inquiries are sometimes called “hard pulls,” and they typically occur when you apply for a new credit card, a personal loan, a mortgage, or other types of credit.

Hard inquiries can lower your credit score by a few points, unlike soft inquiries. This is because multiple hard inquiries within a short period can signal to lenders that you are actively seeking credit, which could be a sign of financial instability.

Remember that hard inquiries typically can exist on your credit report for up to two years, but their impact generally diminishes over time.

Hard inquiry examples:

  • A bank checks your credit when you apply for a loan
  • A mortgage company checks your credit when you apply for a mortgage
  • A credit card company checks your credit when you apply for a card

What’s a Soft Inquiry?

A soft inquiry is a credit check that occurs when you or someone else checks your credit report, but it does not impact your credit score. Soft inquiries can appear for a variety of reasons, such as when you check your credit score or when a potential employer checks your credit as part of a background check.

Soft inquiries may also occur when lenders or creditors check your credit report for preapproval offers or when you check your credit report for monitoring purposes.

The key difference between soft inquiries and hard inquiries is that soft inquiries do not affect your credit score or creditworthiness, while hard inquiries can potentially lower your score by a few points.

Soft inquiry examples:

  • Checking your credit report
  • Companies checking your credit before making preapproved credit offers
  • Employers pulling credit reports as part of background checks

How to Check Your Credit Score without Penalties

Checking your credit score is an important step in managing your credit and overall financial health. Fortunately, you can check your credit score without any penalties or negative impact on your credit report. Here are a few ways to check your credit score without hurting it.

Use a Free Credit Monitoring Service

There are many free credit monitoring services like Credit.com that allow you to check your credit score and report without any penalties. These services will typically provide you with regular updates on any changes to your credit report and alerts for any suspicious activity or potential fraud.

Check with Your Credit Card Issuer or Bank

Some credit card issuers and banks will provide free credit scores to their customers. Check with your financial institution to see if they offer this service and how you can access your score.

Purchase a Credit Score from a Credit Bureau

If you need to check your credit score more frequently than once a year, you can purchase your credit score directly from one of the three major credit bureaus. Be sure to read the terms and conditions carefully, as some credit bureaus may offer a free trial but then charge a fee if you do not cancel within a certain time frame.

Additional help: Request a Free Credit Report

Federal law entitles you to one free credit report per year from each of the three major credit bureaus or through AnnualCreditReport.com:

You can request your credit report online, by phone, or by mail. While your credit report does not include your credit score, it provides a detailed overview of your credit history and can help you identify any errors or issues impacting your credit score.

Why You Should Check Your Credit Score

Regularly checking your credit score is essential for maintaining good financial health. Your credit score is a numerical representation of your creditworthiness and can be used by lenders, landlords, and even potential employers to determine whether or not you are a reliable borrower.

By keeping tabs on your credit score, it can give you clues as to whether  your credit report is accurate and up-to-date, and if necessary, allow you to take any necessary action to improve your credit health. Additionally, checking your credit score can alert you to any fraudulent activity on your accounts, allowing you to take action quickly and mitigate any potential damage to your credit.

In short, regularly checking your credit score is vital to responsible financial management.

FAQs

What Is a Good Credit Score?

A good credit score generally falls within the range of 670 to 739, according to the FICO® credit scoring model, and 661-780, according to the VantageScore scoring model—which are the most commonly used models in the United States.

That said, a good credit score may vary depending on the lender, loan type, and/or creditor you are working with. In general, the higher your credit score, the better your chances of getting approved for loans and credit cards with favorable interest rates and terms.

Where Are Credit Inquiries Reported?

Credit inquiries can be found on your credit report. There are two types of credit inquiries: hard inquiries and soft inquiries. Hard inquiries are initiated by lenders or financial institutions when you apply for credit and are sent to one of the three major credit bureaus. These inquiries can stay on your credit report for up to two years, potentially lowering your credit score.

How Can Your Credit Score Change?

Your credit score can change for various reasons, both positive and negative. One of the most significant factors affecting your credit score is your payment history, including late or missed payments, which can lower your score.

Your credit utilization ratio, the amount of credit you’re using compared to your total available credit, can also impact your score. Keeping your credit utilization low can help improve your credit score.

The length of your credit history, the types of credit you have, and the number of credit inquiries can also affect your score. Other factors that can impact your credit score include opening or closing credit accounts, applying for new credit, and negative marks on your credit report, such as bankruptcy or foreclosure.

It’s important to keep track of your credit score and take steps to improve it if necessary, such as paying bills on time and maintaining a low credit utilization ratio.

Improve Your Credit with Credit.com

Many financial decisions depend on your credit score, and a good score can get you better loans, lower rates, and essentially more financial freedom.

Checking your credit score regularly can help you keep tabs on your financial health and allow you to make the necessary adjustments to improve your score whenever necessary.Credit.com’s credit score services provide you with a free credit score from Experian which updates every 14 days. Take your first steps toward financial well-being by signing up today.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

With all this talk about slipping equity and negative equity, Forbes decided to take a closer look at which cities were retaining their home equity amid the ongoing mortgage crisis.

Using data from Moody’s Economy.com, the publication looked at 200 of the country’s largest metro areas, discovering that Beaumont, Texas led that nation in equity at a solid 75 percent.

That’s well above the collective 46.2 percent homeowner equity reported nationwide in the first quarter of 2008, but still below the city’s 79 percent equity share in 2007.

One factor that likely contributed to their strong home equity position is the fact that only 1.39 of households in the city have two or more mortgages.

Next on the list is Corpus Christi, Texas, with a 72 percent home equity share, down slightly from 73 percent in 2007.

That’s followed by Gulfport, Mississippi with 71 percent equity, formerly 76 percent, Charleston, West Virginia with 67 percent equity, formerly 70 percent, and El Paso, Texas with 67 percent equity, down from 69 percent.

A reader aptly pointed out that Texas performed better than other states because of their strict homestead law, which generally restricts higher loan-to-value lending.

On the other end of the spectrum are places like Sacramento, California and Grand Rapids, Michigan, where equity as a percentage of home value is just 28 percent, down from 57 percent and 46 percent a year ago, respectively.

Then there are places like Stockton, California, where negative home equity (below zero) is as high as 95 percent, which explains why mortgage lenders continue to freeze home equity lines of credit and tighten guidelines.

(photo: napfisk)

Source: thetruthaboutmortgage.com