A slower than anticipated first half has killed off any enthusiasm economists had for housing at the start of the year, according to a survey published by the Wall Street Journal. In the Journal’s latest monthly survey, a panel of economic experts called for new housing starts to average a seasonally adjusted annual rate of 1.01 million this year, a nine percent decline from their prediction at the beginning of 2014. While weather conditions may be to blame for some of the slowdown early in the year, weakness in the new home market has also been a problem.
Given the way the market has performed in the year's first half, more than 20 percent of economists in the Journal survey now say housing could be a downside risk to economic growth. That share has more than quadrupled from January, when nearly 5 percent pointed to the housing market as a potential drag.
In an announcement last week, analytics and decision management firm FICO introduced its new credit model designed to offer greater precision for lenders measuring a borrower’s credit health. Called FICO Score 9, the new model is designed to reduce the impact that medical debts have on borrowers’ profiles, reflecting what most analysts agree is a lower credit risk. FICO Score 9 will also discount any overdue debts that have already been paid, leaving only unpaid collections as a strike. While the changes may have a significant impact on approval rates for smaller loans, the effects are expected to be less apparent for borrowers in the mortgage space, where the risk thresholds are more spread out.