Zack childress First Time Home Buyers Need More Money Down

Zack childress-This is a standard case of increase in home values. In addition, it’s also a sign that the lending institution is not as tight as it once was 3, 4, 5 years ago. What that means is that you are able to first time home buyers buy a house with a lower credit score. You are just required to put more money down.

So, what the article is really saying to you is, “The average numbers of down payments have increased – 2013 we’re almost $9,500 and in 2007 we were only $6,000.” Don’t let those number fool you because that has direct reflection of two main clauses.

1. Home prices are going up

The lending institution is loosening their loan criteria. In a situation where your credit is lower, they are going to require more down from you.

Great sites like Redfin.com, Bankrates.com, and Foreclosures.com; can give you some understanding of this.

Read the article. It talks about down payments, FHA loans, consumer debt, and all types cash buyers. I really want your input on this.

If you are out there buying houses and you’ve put down payments, what are some of the down payments you’ve made?

I believe homeowners right now should be paying between 3-5% down. As investors, you are gonna see between 15-20% down on investment properties. Give me your feedback after you read this article.

More Money Down Adds to U.S. First-Time Buyer Blues: Economy

by: Michelle Jamrisko and Alexis Leondis Bloomberg.com – aug 14,2014

The challenges facing prospective first time home buyers of the least expensive homes in the U.S. are getting harder to overcome.

Already beset by stagnant wages, growing student debt and competition from investors who are snapping up listings, those looking to purchase moderately priced houses must also provide more cash up front. The median down payment for the cheapest 25 percent of properties sold in 2013 was $9,480 compared with $6,037 in 2007, the last year of the previous economic expansion, according to data from 25 of the largest metro areas compiled by brokerage firm Redfin Corp.

The higher bar is a symptom of still-tight credit that is crowding out first-time buyers even as interest rates remain near historical lows. Younger adults, who would normally be making initial forays into real estate, are among those most affected, weakening the foundations of the housing market and limiting its contribution to economic growth.

Homeownership Reconsidered

The numbers tell the story of why we have millions of potential homeowners who are renters or living with their parents,” said Susan Wachter, a professor of real estate and finance at the University of Pennsylvanias Wharton School in Philadelphia. “What has changed is the ability to become an owner. And that’s changed through a down payment that’s more than doubled.”

Down Payment

The median down payment for the cheapest 25 percent of homes was 7.5 percent of the sales price last year, up from a low of 3.1 percent in 2006 and compared with an average 4.2 percent from 2001 through 2007, according to Seattle-based Redfin. For properties in the middle 50 percent, the share rose to 8.8 percent in 2013 from an average 8.2 percent in the seven years leading to the last recession, and for the top quarter it climbed to 20.9 percent from 19 percent.

See original source:

http://www.bloomberg.com/news/2014-08-14/bigger-down-payments-add-to-u-s-first-time-homebuyer-blues.html

 

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