Cash sales top 48% in NJ

Posted on July 2, 2015 by grim

From Inman:

All-cash purchases, institutional investors saw record lows in May single-family market

The percentage of single-family homes and condos purchased with all cash or by institutional investors hit record lows in May.

Nearly 25 percent of all home sales in May were all cash purchases, according to RealtyTrac’s U.S. Home & Foreclosure Sales Report. This figure represents the lowest level of all-cash closings since November 2009. A year ago, more than 30 percent of buyers closed with all cash.

The share of institutional investors — entities purchasing at least ten properties in a calendar month — dropped to 2.4 percent of single-family home sales in May, the lowest level since January 2000.

The most common states for all cash deals in May were New Jersey and Florida, with these transactions accounting for nearly 48 percent of all sales in both locales. New York (38.8 percent) and Massachusetts (37.1 percent) followed.

Posted in Economics, New Jersey Real Estate | 114 Comments

New highs for NYC, over the river … notsomuch

Posted on July 1, 2015 by grim

From the NYT:

Average Home Price in Manhattan Reaches $1.87 Million, a New High

After flirting with records for more than a year, the average sales price of a Manhattan apartment hit a new high in the second quarter, according to at least two reports to be released on Wednesday by major real estate brokerage firms.

A strong local economy, combined with high demand and not enough listings, pushed the average sales price up 11 percent, to $1.87 million, compared with the same period in 2014, surpassing the previous peak of $1.77 million reached in the first quarter of last year, according to Jonathan J. Miller, the president of the appraisal firm Miller Samuel and the author of a report for Douglas Elliman Real Estate.

The median sales price, which measures the middle of the market and is less affected by high-end sales, was $980,000, just behind the record of $1.025 million set in the second quarter of 2008, before the financial crisis hit, according to Miller Samuel.

“It’s like everyone revved up their engines again,” said Pamela Liebman, the chief executive of the Corcoran Group, which put the record average sales price at $1.81 million and the median at $960,000. “We saw continuous demand across all price points, buoyed by some exciting new developments that have come on the market and a continued influx of buyers from China.”

“In all my years of doing this,” she added, “I have never seen such a hunger for New York City real estate.”
…
The higher prices were driven by two key factors. Inventory growth has begun to stall, especially in the resale market, where potential sellers are reluctant to list their properties as they are often outbid, turned down for loans or simply cannot find what they are looking for. The number of available listings barely budged, up 1.3 percent in the second quarter to 5,730, compared with a year ago, according to Douglas Elliman.

Posted in Demographics, Economics, Housing Recovery, NYC | 121 Comments

Pending Home Sales Hits Post-Recession Highs

Posted on June 30, 2015 by grim

From the WSJ:

U.S. Pending Home Sales at Highest Level in Nine Years

A forward-looking indicator of home sales rose to its highest level in more than nine years in May, a sign the housing market is gaining traction after a shaky start to the year.

The National Association of Realtors said Monday its index of pending home sales increased 0.9% to a seasonally-adjusted 112.6, the highest level since April 2006. The index tracks contract signings, which usually close within two months.

The April index was revised down to 111.6 from 112.4.

Economists surveyed by The Wall Street Journal had expected a 1.2% increase in May.

“The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring,” NAR chief economist Lawrence Yun said.

Monday’s index was “a little softer than expectations,” wrote Daniel Silver of J.P. Morgan in a note. “But the trend in the series still looks favorable, with pending sales up for five straight months through May.”
…
First-time home buyers also started making their way back to the real-estate market last month.

But existing home sales, which account for about 90% of the market, are still well below their prerecession peak, when they routinely exceeded 6 million and even topped 7 million for part of 2005.

Prices have also been rising lately. The median price of an existing home last month was $228,700, or 7.9% higher than in May 2014.

“Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages,” Mr. Yun said.

Pending home sales rose 6.3% in the Northeast and 2.2% in the West but fell 0.6% in the Midwest and 0.8% in the South.

Posted in Housing Recovery, National Real Estate | 86 Comments

Home prices setting new records in April

Posted on June 29, 2015 by grim

From HousingWire:

Black Knight: Home prices rise 1% in April from March

U.S. home prices were up 1% for the month, rising 4.9% on a year-over-year basis, according to Black Knight’s latest Home Price Index report, based on April 2015 residential real estate transactions.

This puts national home prices up nearly 3% since the start of the year and up just under 24% since the bottom of the market at the start of 2012.
At $248,000, the national level HPI is now just 7.6% off its June 2006 peak of $268,000.

Washington led gains among the states, seeing 2.0% month-over-month appreciation, while Seattle led metro areas with 2.2% growth from March.
Detroit, Michigan; San Jose, California, and Ft Collins, Colorado all saw home prices rise 2.0% for the month, making them three of the nation’s best performing metro areas.

Among the nation’s 20 largest states, four hit new peaks in April:

Colorado ($294K)

New York ($345K)

Tennessee ($174K)

Texas ($208K)
…
Of the nation’s 40 largest metros, 10 hit new peaks:

Austin, TX ($277K)

Columbus, OH ($181K)

Dallas, TX ($209K)

Denver, CO ($314K)

Honolulu, HI ($526K)

Houston, TX ($214K)

Nashville, TN ($213K)

San Antonio, TX ($189K)

San Francisco, CA ($701K)

San Jose, CA ($847K)

Both Boston, MA and Portland, OR are within 0.75% of reaching new peaks.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 87 Comments

Peek into the Lower Hudson Valley Market

Posted on June 28, 2015 by grim

From Lohud.com:

The slump is over: real estate is back

Looks like very good news for homeowners across the Lower Hudson Valley — experts are saying that the multi-year real estate slump is finally over.

“It’s the best market we’ve had since 2007, both in price and the velocity of sales,” said Arthur Scinta of Houlihan Lawrence, who works exclusively in the red-hot Pelhams.

In Rockland, the number of home sales is up 16 percent this spring compared to 2014. In Putnam, they shot up 23 percent compared to last spring. Westchester has seen a more temperate increase of 6 percent.
…
“It’s a sellers’ market,” said Brian Levine, manager of the Houlihan Lawrence office in Irvington, another strong market.”We’re seeing bidding wars, we’re seeing all-cash offers. We’re sending people away with really good credit. They’re not getting the houses they want because people are showing up with all cash, and as we all know cash is king.”

The endless winter we endured put a big damper on the early spring real estate market, leaving buyers and sellers alike huddled indoors behind mountains of snow. Who wants to put their home on the market when you can’t even goose up the curb appeal with basics like a newly painted front door and fresh landscaping?

But for parts of the Lower Hudson Valley and for certain price points the market has come roaring back to life these last couple of months.

Some houses are selling very fast. “I listed a house on May 13th in West Harrison and we had signed contracts on it by the evening of the 20th,” said Wendy Alper, an agent with Julia B. Fee Sotheby’s International Realty in Rye.

It’s definitely a seller’s market, Scinta said. At least 30 of the 59 houses sold in Pelham so far this year had multiple bids. “Generally, that translates into over the asking price,” he said.
…
Buyer demand remains strong locally and a shortage of homes on the market continues to be a problem, Levine said. “There is a severe inventory shortage across the nation, and that’s true here as well.”

In Yonkers, Jane McAfee of Houlihan Lawrence has seen a very low inventory since January. “At the beginning of the year there were 199 houses on the market in Yonkers, and for Yonkers that’s not many,” she said. On June 1, 2014, for example, there were 304 single-family homes for sale in the city.
…
“It’s unlike any spring market I’ve been in — and I’ve been doing this for 21 years — because it’s so late,” McAfee said. “It’s not just that there were storms, it was so bad all winter long. People were not getting their houses ready — they certainly couldn’t do any work outside.”

In most years, “we’d be at the tail end of the spring market now, but we’re still in the thick of it,” said Levine, the Irvington manager. “We’re seeing a lot of activity. I keep looking at the calendar and saying it should be starting to slow down now.”
…
“The closer to New York City the better — Pelham, Bronxville, Larchmont, the river towns (Dobbs Ferry, Hastings-on-Hudson, Irvington and Tarrytown),” said Scinta, the Pelham agent. “The market is always driven by the city and it rolls north. As the market recovers, it pushes its way up.”

Posted in Housing Recovery, NYC | 30 Comments

Getting ahead in the new normal

Posted on June 26, 2015 by grim

From the NYT:

More Americans Are Renting, and Paying More, as Homeownership Falls

To Johnnie McDowell, the house on Livingston Street seems to taunt him every time he walks by. It’s nothing special: The two-story home is a bit shabby, and it’s been on and off the market in recent months without finding a buyer. Still, he cannot stop dreaming of a better life for his family as he imagines the extra space inside and his children and dog playing outdoors once he weeds the yard.

The McDowell family, however, remains squeezed into a rental apartment: a single floor of an oddly configured duplex that Mr. McDowell has fashioned into three small bedrooms for himself, his wife, Takiba, and two children. With a monthly rent of $1,400, car payments, unpredictable family expenses, a spotty credit report and an empty savings account, Mr. McDowell sees no way to soon pull together a decent down payment.
…
In the past, many families like the McDowells, whose household income is almost $100,000 a year, would already be nestled in a starter home, maybe even on the cusp of upgrading to something bigger and more expensive on the profits from their first house.

But even as the market continues to improve — sales of existing homes in May increased to their highest pace in six years, the National Association of Realtors reported on Monday, and first-timers make up 32 percent of the buyers — it is leaving millions of Americans unwillingly stuck in rental housing.
…
“It’s more of a new normal,” said Robert J. Shiller, an economics professor at Yale University and a Nobel laureate. “We went through a wrenching experience with the biggest housing bubble and the biggest collapse since 1890. This is an anxious time.”

The nation’s homeownership rate has been falling for eight years, down to 63.7 percent in the first quarter of this year from a peak of over 69 percent in 2004, according to a new report released on Wednesday by Harvard University’s Joint Center for Housing Studies.

The flip side of the decline in homeownership is a boom in rentals and a significant rise in the cost of renting. On average, the number of new rental households has increased by 770,000 annually since 2004, the center’s report said, making 2004-14 the strongest 10-year stretch of rental growth since the late 1980s.
…
Some economists see signs of a turnaround, with reluctant renters like Mr. McDowell starting to find ways to enter the mortgage market, where interest rates are still at bargain levels. The economists predict home buying will continue to rise as long as the economy keeps growing and unemployment falls further, prodding employers to raise wages faster than inflation.
…
But in the meantime, the flood of renters has reduced the national vacancy rate to its lowest point in nearly 20 years, according to the center’s report. And while builders are adding apartments rapidly, they are concentrating on the higher end of the market, pinching those in the middle and bottom. Last year, rents rose at a 3.2 percent rate, more than twice the pace of overall inflation.
…
The situation is particularly acute in New Jersey, where the McDowell family lives. According to an analysis of 2013 government data by Enterprise Community Partners, a nonprofit based in Columbia, Md., dedicated to creating more affordable housing, more than three out of 10 New Jersey renters spend at least half of their household income on rent and utilities, the second-highest rate in the nation, behind Florida.
…
On a recent warm evening, Mr. McDowell stood outside the broken white picket fence that lined the home, with Erin bouncing down the sidewalk.

“I would rip up all of this,” he said, plotting how he’d clean up the yard so the children and their shih tzu, Cleo, could safely play. “I have dreams. My wife and I have dreams.”

Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate | 94 Comments

Hipsters hate Yuppies

Posted on June 25, 2015 by grim

You are fooling nobody bud, you are clearly a hipster in a yuppie disguise. Also, be it noted, white men can’t tag.

From the Jersey Journal:

Photos show alleged vandal behind ‘Go home yuppie scum’ graffiti in Jersey City

Police are seeking the public’s help in identifying a man seen in new security footage allegedly spray painting “GO HOME YUPPIE SCUM!” on a new residential building next to City Hall.

Eric and Paul Silverman, the developers behind the new building, Charles & Co., released photos of the man, who tagged the Grove Street building on June 13.

The alleged vandal is a white male with a thin build, dark hair and a beard. He was caught on video footage tagging the Montgomery Street side of Charles & Co. at about 5 a.m. that Saturday. The graffiti was gone by noon, and the Silvermans estimate the damage to be in excess of $2,750.

In the footage, he is dressed in business casual clothing, including a blazer and a tie. He is wearing sunglasses.
…
The graffiti was found the same week Downtown Jersey City residents debated a new, anti-gentrification campaign that used “go home yuppie scum” as one of its slogans.

Posted in Humor, New Development, Unrest | 116 Comments

Stalker or elaborate sham to sue?

Posted on June 24, 2015 by grim

From the NY Daily News:

New Jersey couple sues over dream home that came with creepy, threatening letters from ‘The Watcher’

A New Jersey couple who thought they were buying their dream home are suing its previous owners, claiming the house has a longtime stalker who writes terrorizing letters and signs them “The Watcher.”

A Union County lawsuit contends the original owners of the six-bedroom, $1.3 million home in upscale Westfield deliberately withheld information about the anonymous, threatening missives.

“Currently, plaintiffs are in the process of selling the home as they are unable to live in the home without extreme anxiety and fear for their children’s safety and well-being,” says the suit that was filed earlier this month, according to Courthouse News Service.

The names of the plaintiffs and the defendants, as well as the home’s address, were not divulged by the site to protect the privacy of those involved.

“Plaintiffs are having trouble selling the home as interested parties, once notified of the letters, no longer view the property as a safe home,” the suit claims.

The letters began arriving on June 5, 2014, three days after closing, the couple contends. They show The Watcher’s “mentally disturbed fixation and claim to possession and/or ownership of the home,” the suit says.

The letters claim the home had been in The Watcher’s family for decades.
…
The new owners claim the sellers received a letter from The Watcher more than a week before closing on the sale. That correspondence “noted there would be a new family moving into the home.”

The sellers were “so desperate to sell the million-dollar home (they) knowingly and willfully failed to disclose … this disturbing letter,” the suit says.

The new owners are seeking damages for breach of contract and fraud. They are asking for their money back, plus interest.

Posted in New Jersey Real Estate, Unrest | 90 Comments

First time buyers back in the market?

Posted on June 23, 2015 by grim

From the WSJ:

U.S. Existing-Home Sales Increase 5.1% in May

Sales of previously owned homes surged in May, buoyed in part by the return of younger buyers who had long struggled to find a path into the market.

The pace of existing-home sales rose 5.1% last month from April to a seasonally adjusted rate of 5.35 million, the National Association of Realtors said Monday. Sales for April were revised up to 5.09 million from an initially reported 5.04 million.

Sales last month hit their strongest pace since November 2009. “We’re moving back toward a more normal housing market,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.

Analysts pointed to the return of first-time buyers, who have been cautious for much of the recovery, as evidence the housing market is starting to look more like it did in the early 2000s, before a boom and bust. First-time buyers rose to 32% of all existing-home buyers from 27% a year ago, NAR said. Historically, first-time buyers have made up about 40% of the market.

Significant growth in home prices and sales is unlikely without new buyers. A stronger market for existing homes can help shape the wider economy in part because homeowners invest in things from washing machines to lawn mowers and use their homes to finance other big purchases.

“If you take first-time buyers out of the equation then all you’re doing is shuffling deck chairs around,” Mr. Stanley said.
…
Still, the recovery has been too uneven for economists to feel certain the housing market is on solid ground. Sales unexpectedly fell in April before recovering last month. One issue is a shortage of new and existing inventory that is pushing up prices and driving potential buyers away.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 70 Comments

Subprime wasn’t the problem?

Posted on June 22, 2015 by grim

From Fortune:

The subprime mortgage crisis wasn’t about subprime mortgages

In the years following the financial crisis, a cottage industry arose that tried to explain just what happened to the American economy and the financial system.

Early on in the process, journalists zeroed in on one set of villains: subprime lenders and the supposedly irresponsible borrowers who were their customers. We were regaled with stories of mortgage lenders like Countrywide handing out loans that borrowers couldn’t possibly repay, and then selling them on to investment banks, who packaged them into “toxic” bundles like Goldman Sachs’ infamous Abacus collateralized debt obligation.

When these subprime borrowers began to default, so the narrative goes, the dominoes began to fall, eventually helping to send the entire mortgage market, U.S. financial system, and global economy into crisis.

At the time, the press spent a lot of energy scrutinizing subprime borrowers and lenders, based on the fact that in the early days of the crisis, the rate and absolute number of subprime foreclosures were much higher than foreclosures in the prime market. It was around this time that CNBC’s Rick Santelli gave his famous rant against talk of bailing out underwater homeowners that helped launch the Tea Party movement, calling the folks who were at risk of foreclosure “losers.”

Furthermore, much of the reforms instituted since the financial crisis have centered around increasing scrutiny of mortgage lending, to make sure that these sorts of irresponsible loans aren’t made again.

But if journalism is the first-draft of history, then it’s about time for a second draft. In a new working paper by Wharton economists Fernando Ferreira and Joseph Gyourko, the authors argue that the idea that subprime lending triggered the crisis is misguided. The paper looks at foreclosure data from 1997 through 2012 and finds that while foreclosure activity started first in the subprime market, the foreclosure activity in the prime market quickly outnumbered the number of subprime foreclosures.

Posted in Foreclosures, Housing Bubble, Risky Lending | 70 Comments

Boomerangers

Posted on June 20, 2015 by grim

From the NYT:

Mortgage Market on the Mend

New research from TransUnion, the credit information service, predicts that some 1.5 million homeowners who were forced out of the mortgage market after the housing bust will have recovered sufficiently to re-enter the market sometime between now and 2017.

But creditworthiness alone does not a buyer make. Other studies suggest that the fallout from the financial crisis is still a hindrance for many Americans, and that the national homeownership rate will continue to fall in coming years.

The TransUnion study, released on Wednesday, tracked the credit trajectory of the roughly seven million homeowners who had been “negatively impacted” by the economic downturn as of the end of 2009. That category includes homeowners who were at least 60 days delinquent on a mortgage, had lost a home to foreclosure or short sale, or had obtained a modification to a distressed loan.

Borrowers who suffer such a major credit event are usually ineligible for another loan backed by Fannie Mae, the Federal Housing Administration or other government entities until after waiting periods of two to seven years have passed.

TransUnion found that, as of the end of 2014, 1.2 million credit-weakened borrowers had recovered to a level at which they would meet Fannie Mae’s underwriting guidelines. This meant they had a minimum FICO score of 620 and no unpaid judgments or liens pending, and were beyond a required loan waiting period.

As for how many more borrowers are expected to recover in coming years, TransUnion predicts 700,000 this year, 300,000 in 2016, and a half million in 2017.
…
Compared with first-time buyers, this population “presumably has a higher desire and interest in getting a mortgage because they’ve had one before,” he noted.

Posted in Foreclosures, Housing Recovery, Mortgages, National Real Estate, Risky Lending | 63 Comments

2014 Profile of NJ Buyers and Sellers

Posted on June 19, 2015 by grim

From the Record:

Who’s buying and selling?

Who is buying?

Forty-four percent were first-time buyers in New Jersey compared to the national figure of 33 percent. Age of the first-time buyer is 33 and the typical repeat buyer is 48. Sixty-four percent of buyers were married couples.

What did they buy?

The typical home in New Jersey was built in 1974 and has three bedrooms and two bathrooms. Seventy-three percent of homebuyers purchased a single-family home. Forty-five percent of buyers over 50 years old bought in an adult community.
…
How did they pay for it?

Eighty-five percent of buyers in New Jersey financed an average of 82 percent of their purchase price. Ninety-six percent of first-time buyers financed their home and only 76 percent of repeat buyers used financing.

Who sold their home?

The typical seller lived in their home for 10 years and sold for 97 percent of their listing price. Fifty-one percent of sellers reduced their asking price at least once. Fourteen percent of sellers had to delay or stall the selling process as the value of their home was less than their mortgage.

Posted in Demographics, Economics, New Jersey Real Estate | 119 Comments

One hundred and ninety seven percent!

Posted on June 18, 2015 by grim

From HousingWire:

Foreclosure activity hits 19-month high on rise in REOs

Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 126,868 U.S. properties in May 2015, up 1% from the previous month and up 16% from a year ago to a 19-month high, according to the latest report from RealtyTrac.

The U.S. foreclosure rate in May was one in every 1,041 housing units with a foreclosure filing.

The increase in May was driven primarily by a jump in bank repossessions, which at 44,892 were down 1% from the previous month but up 58% from a year ago, and a 5% year-over-year increase in scheduled foreclosure auctions.

REOs increased on a year-over-year basis for the third consecutive month, and scheduled foreclosure auctions have increased on a year-over-year basis in four of the last eight months. May REOs were 56% below the peak of 102,134 REOs in September 2013 but still nearly twice the average monthly number of 23,119 in 2005 and 2006 before the housing bubble burst in August 2006. (Also see special methodology note on REO data collection below.)

“May foreclosure numbers are a classic good news-bad news scenario, with the number of homeowners starting the foreclosure process stabilizing at pre-housing crisis levels but the number of homeowners actually losing their homes to foreclosure still well above pre-crisis levels and on the rise,” said Daren Blomquist, vice president at RealtyTrac. “Lenders and courts are pushing through stubborn foreclosure cases that have been languishing in foreclosure limbo for years as options to prevent foreclosure are exhausted or left untapped.”

Following the national trend, 38 states and the District of Columbia posted year-over-year increases in REOs, including New Jersey (up 197%), New York (up 116%), Ohio (up 114%), Georgia (up 108%), Pennsylvania (up 106%), Florida (up 63%), Michigan (up 63%), Maryland (up 62%), and California (up 31%).

Posted in Foreclosures, New Jersey Real Estate | 105 Comments

Housing and credit data continuing to improve

Posted on June 17, 2015 by grim

From National Mortgage Professional:

New Data Finds Negative Equity and Consumer Debt Declining

The latest CoreLogic study on negative equity found 254,000 properties regained equity in the first quarter, bringing the total number of mortgaged residential properties with equity at the end of the quarter to 90 percent of all mortgaged properties. On a national level, CoreLogic found borrower equity increased year over year by $694 billion in the first quarter.

The total number of mortgaged residential properties with negative equity is now placed at 5.1 million, or 10.2 percent of all mortgaged properties. This is down from 5.4 million homes, or 10.8 percent, that had negative equity in the fourth quarter of 2014 and down from 6.3 million homes, or 12.9 percent, reported in the first quarter of last year.
…
Texas had the highest percentage of mortgaged residential properties in positive equity at 97.7 percent, followed by Hawaii (96.9 percent), Alaska (96.8 percent), Montana (96.8 percent) and North Dakota (96.2 percent). On the flip side, Nevada had the highest percentage of mortgaged residential properties in negative equity at 23.1 percent, followed by Florida (21.2 percent), Illinois (16.8 percent), Arizona (16.8 percent) and Rhode Island (15.7 percent). Combined, these five states accounted for 31.4 percent of U.S. negative equity.

“Many homeowners are emerging from the negative equity trap, which bodes well for a continued recovery in the housing market,” said Anand Nallathambi, president and CEO of CoreLogic. “With the economy improving and homeowners building equity, albeit slowly, the potential exists for an increase in housing stock available for sale, which would ease the current imbalance in supply and demand.”
…
Separately, the latest S&P/Experian Consumer Credit Default Indices reported historical lows for four of the five national indices. The composite index posted its second consecutive historical low of 0.88 percent in May, a decrease of nine basis points, while the first mortgage default rate was down nine basis points to 0.74 percent and the second mortgage default rate down one basis point to 0.42 percent. The auto loan default rate also reported a historical low of 0.86 percent, a decrease of eight basis points. While not a historic low, the bank card default rate reported its first decrease since January 2015 with a rate of 2.98 percent with a drop of 20 basis points, its largest reported decline since October 2013.

David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, presented the data as evidence of a recovering environment for homeownership.

“These figures are another indication that housing is recovering,” he said. “Moreover, other data on financial difficulties confirm that foreclosures are declining and consumers’ capability and willingness to borrow are improving.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 141 Comments

Is 20% even possible anymore?

Posted on June 16, 2015 by grim

From Bloomberg:

Want a House? Good Luck With the Down Payment

Saving for a down payment has long been a big challenge for anyone who wants to buy a home. And it got harder after the financial crisis, as lenders insisted on down payments of 20 percent or more for conventional mortgages, which make up the bulk of the market.

That seems to be changing a bit — perhaps because so many consumers have paid down other debt and have raised their credit scores. Since 2010, the average down payment has declined to 18.4 percent from 21.4 percent, according to data from Realtytrac. (Just by way of comparison, it was about 2 percent at the peak of the housing bubble.)

For a lender, there are certain drawbacks to loans with less than 20 percent down. For one, the loans sometime don’t qualify for a government guarantee or insurance. There also is a practical reason for the 20 percent standard: Historically, when a property went into default, banks could foreclose and then sell quickly at say a 20 percent discount, and still recoup their investment. Banks also see bigger down payments as a way to ensure that borrowers have more at stake, tamping down the speculation that contributed to the housing bubble.

For many buyers, however, the down payment hurdle remains a source of frustration, making it hard for many people to benefit from mortgage rates that have been at or near record lows for several years.

Posted in Housing Recovery, Mortgages, Risky Lending | 158 Comments