Sometimes perfectly logical assumptions just don’t pan out.

For homeowners who had planned to sell their St. Cloud 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 St. Cloud home sellers, even showing St. Cloud 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 St. Cloud 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 St. Cloud consumers who maintain strong credit, the continuation of mortgage interest rates at historic lows remains a strong incentive to refinance—or to buy. Call me for any and all St. Cloud real estate inquiries!

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

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