Canada First Mortgage

Housing market coming out of `hibernation’

Canwest News Service; Financial Post

OTTAWA - The Canadian housing market seems to be “emerging from its winter hibernation,” says a report released by Scotia Economics on Tuesday

The Bank of Nova Scotia’s economic-research division said existing-home sales strengthened in February and March, and preliminary reports indicate this trend continued in April.

The report said a rise in demand and drop in new listings has resulted in the housing market moving closer to being “balanced.” The listings-to-sales ratio averaged 2.2 in March, Scotia said, down from its peak of 2.7 in November. A ratio of 2 is considered balanced.

Scotia said home prices “steadied” in February and March, but still remain down almost eight per cent from a year earlier, or about five per cent when adjusting for heavy sales fluctuations in certain regions.

Adrienne Warren, senior economist with Scotia Economics, said it now seems that housing prices will not fall the full 10 per cent this year she had anticipated, and the drop in resales should be at the low end of her forecast for a 15 to 20 per cent decline.

“Nonetheless, we still feel there is more downside than upside risk to home sales and prices,” she said, in a statement.”The significant deterioration in domestic labour markets in recent months suggests little prospect for a major resurgence in demand near-term.”

In contrast to the resale market, Scotia said in its report Tuesday that the retrenchment in the housing-construction industry is happening quicker than anticipated. It said builders are adjusting to the lower-pricing environment and rising inventories.

Scotia said there was an annualized rate of 139,000 housing starts in this year’s first quarter, the lowest in a decade. It downgraded its overall forecast for this year to 140,000 housing starts from 155,000.

Financial Post

In our quest to uncover the mysteries of the Credit Bureau, we find ourselves coming up with very little.  Truth be told, the credit bureau scoring system is an intricate formula based on algorythms that will not entirely be disclosed to the public; BUT, we know some of the secrets to making things a little more manageable!

We can be certain that if we miss a payment on a credit card, our score will ultimately go DOWN because the credit scoring system reveals this as a “bad thing”.  Kind of common sense, right?  But what about the folks who THINK they’re doing the right thing, but are actually hurting themselves?  Let me give you an example; let’s say the consumer was TOLD to go and establish some credit by obtaining a credit card.  Now, this person wants to build his credit up in a good way, so he goes and buys a car stereo for $500 on his credit card.  When he gets home that evening, he hops onto his trusty computer and does some computer banking.  He diligently takes money from his account, and places it onto his credit card that he charged $500 on previously during the day.  Pretty good right?  He used his card, now he’s paid it off!  Well……the truth of the matter is (in this case), when you’re establishing credit you actually need the credit ‘grantor’ to see that you can manage holding a debt by carrying a balance on your card, and making at least the minimum payment per month on it.  So what this consumer has done has inadvertantly ‘cancelled’ his credit to report to the bureau because there’s essentially NOTHING to report at the end of the month.  The secret to this is to keep a small, manageable balance on your card that is nowhere near 70% - 75% of the LIMIT to the credit card…i.e.: credit limit is $1000 - do not keep a balance (if possible) of over $700 - $725.  Keeping balances within the 75% and greater range is detrimental to your overall credit score.   This is just one example…but there are more!

It’s important to realize as well that not all credit bureaus look the same.  In fact, no one has the same looking credit bureau as anyone else; yours is unique (…just like everyone else’s!)

The reason I say that is because you may NOT know what you’re doing wrong…and there may BE a way to improve your score by simply following a couple of simple “not so known” rules.  We offer the ‘credit recovery’ system at Canada First Mortgage which we’re always willing to assist with - but I also found this little gem on a blog site that I thought I’d share with you as well…

http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02178.html

Let me know if you have any questions at all!  Hope to talk to you later…

Sincerely,
Dan Mass, AMP
Verico Canada First Mortgage

dan@canadafirstmortgage.com