Apparently, having money is no longer a prerequisite for purchasing a home. The NAR released a study this past Tuesday that showed only 43% of first time buyers put no money down. Even worse, of the 57% that put some money down, the median down payment was a miniscule 2%.
Does anyone not see the incredible risk inherent in this? These buyers have absolutely no “skin-in-the-game”. Nor do they have the financial aptitude to save any money at all. Years ago these ‘buyers’ would have been laughed at and told to come back with money to lay on the table. No longer! Purchasing a home has gone the way of the shady automobile dealer.
Bad Credit! No Money! Bankruptcy! C’mon down!
43% of first-time home buyers put no money down
As housing prices soared last year, an eye-popping 43% of first-time home buyers purchased their homes with no-money-down loans, according to a study released Tuesday by the National Association of Realtors.
The trend is potentially ominous. The real estate market is cooling in some areas, and rates on adjustable-rate loans are creeping up. As a result, some no-money-down buyers could owe more than their homes are worth.
…
Already, home prices in many areas are declining, and the “For Sale” signs are hanging in front yards longer. There’s now at least a 50% risk that prices will decline within two years in 11 major metro areas, including San Diego; Boston; Long Island, N.Y.; Los Angeles; and San Francisco, according to PMI Mortgage Insurance’s latest U.S. Market Risk Index.
The result will not be pretty, I can promise you that.
Caveat Emptor,
Grim
When does the buy-1-get-1 free begin?
And the 2% those buyers cobbled together was on a median price 150,000 home. Holy crikey.
Does that mean I can buy that house in Paterson for $155,000? (rim shot)
Just heard.. Mortgage lenders will start providing rope to first time homebuyers at closing..
Why you ask?
So they can hang themselves.
-grim
Buy one get one free?
Sounds like the Boston Condo Bust in the early 90’s.
Grim
people are gonna be stuck in crappy condos for a long time
is this the death of the “starter home” concept?
While blogs have been chirping about this for months, I think this report – BIG STORY in USA Today – is the official tipping point of the housing market.
It’s all downhill from here.
That being said … how/when will we be able to find out SPECIFICS about WHERE these no-money down assclowns bought?
Once those come out, I think you’ll have people hovering like hawks to try and find foreclosure deals. Because there’s going to be a lot of them.
Owning a car or a house today is meaningless. 15+years ago it meant something to buy a house or a car. Now any slug can buy “anything” with no money down. How far can this scam go?
The next economic downturn is going to be a doozy.
Why would any of these “speculators” who put less than 5% down on a house care abut what they pay. They made absolutely 0 sacrifice to get in and figure if they don’t get the free handout mtg money now it may soon end.
I for one don’t care, but I do care if the Gov’t uses tax payer funds to bail out these schmucks and the greedy/corrupt real estate industry. They better not do it.
ever heard the phrase “too big to fail?”
I think this describes the gov’t’s attitude toward Fannie Mae.
a bailout is inevitable
This is the first I’m hearing of a ‘bail-out.’
Would either of you two care to elaborate? Because if this idea has some legs to it, it could impact when I buy next.
By bailout, you can’t possibly mean – BEFORE THE FORECLOSURE, can you? I don’t see how that’s possible.
individual homeowners won’t be bailed out— the gov’t doesn’t care about the little guy.
the GSE’s and the mortgage banking industry will be bailed out.
this shouldn’t influence your buying or selling. it will just impact your taxes