I. VantageScores Are Saving Deals!
I blogged about the new credit-scoring model, VantageScore, last year and got yelled at by my team because no investors (lenders that buy our loans) accepted VantageScores at the time.
VantageScore is an alternative to FICO for credit scoring — built by Equifax, Experian, and TransUnion jointly.
Fannie and Freddie now allow lenders to use VantageScore 4.0 instead of FICO, and it can score thinner credit files (with fewer accounts) than FICO can.
Long story short: we now have investors that accept them, and we’re closing loans for borrowers whose scores were too low to work in the pre-VantageScore days.
Borrowers who can’t qualify under the FICO model because their scores are too low should explore the VantageScore alternative.
II. Did Immigrants Push Home Prices Up 30% During the Biden Years?
Every time governments print money and create inflation, they look for others to blame, including “greedy” middlemen, retailers, landlords, and speculators. And, sadly, it often works, as gullible voters then give politicians even more power to wreck things further with price controls.
See NYC, for example, reminding me of this quote: “In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.” – Socialist Swedish economist, Assar Lindbeck.
And people on both sides of the political divide will blame the other team for every negative outcome – no matter what. I saw someone on the left recently blame the Trump administration for the number of earthquakes the world has seen recently because they were caused by climate change that Trump should have stopped.
Not to be outdone, the right has been claiming recently that the huge number of immigrants allowed in during the Biden era drove up home prices by 30%. The NY Post made the claim in a prominent headline, as did Blaze TV here.
So – did immigrants push up home prices that much? NOT EVEN CLOSE.
People are confusing comments by the Dallas Fed that said the surge of immigrants during the Biden years was responsible for as much as 30% of the total increase in home prices.
The TOTAL increase in home prices was about 22% to 23%, so immigrants themselves were responsible for less than 7% of the overall price increase, per the Dallas Fed.
But even that claim leaves me skeptical. To be sure, an influx of 7 million (Dallas Fed figure), 15 million (the center-right’s figure), or 57 trillion (the far-right’s figure) will have an impact on housing costs.
But – here’s the thing: Total inflation over the same period the Dallas Fed is analyzing ran about 18% (per CPI data), and much higher per other indices like Truflation. So, as always, most of the increase in home prices was driven by good old-fashioned inflation (which was driven by the biggest money-printing binge in history).
So, I suspect immigrants had less impact on prices than the Dallas Fed estimates, and a vastly smaller impact than some math-challenged right-wing pundits might have us believe.
This is another reminder, too, that correlation (between immigrants and home prices) is not always causation.
