One-Third Of First-Time Home Buyers Use No Money Down In 2007-2008
You’d think some people would learn a thing or two from the Great American Housing Bust. Chicago Tribune real estate columnist Mary Umberger wrote this past weekend:
Each year, the National Association of Realtors meticulously surveys thousands of real estate consumers in order to get an idea of which ones, exactly, got to the closing table, and how they did it.
The 10,000 consumers who responded to the latest survey revealed a couple of things about first-time buyers. Their numbers grew in this 2007-08 study—not terribly surprising, given that first-timers were unencumbered by having a house to unload. First-time buyers accounted for 41 percent of all transactions, up from 39 percent the year before, and up from 36 percent in the 2005-06 study.
But many first-timers managed their deals in a way that I find troubling, given that we’re now reminded every single day that easy credit is what led us into our current national financial bind: A huge number of them bought with no money down—34 percent of all first-time buyers financed 100 percent of their purchases. (Among all types of buyers, 23 percent purchased with 0 down.)
Hope these new homeowners keep their jobs in the 2008-? U.S. Recession. Otherwise, there’s going to be a lot more jingle mail down the road…
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Source:
“No down payment? Buyers still able to score homes”
Mary Umberger
Chicago Tribune, November 30, 2008
December 3rd, 2008 at 3:36 am
You’re usually pretty good with posting music-related viceos, so I’m surprised you missed this Chuick Berry song…”No Money Down!”
Link: http://www.youtube.com/watch?v=CgKIL7qOhOU&feature=related
December 3rd, 2008 at 5:55 am
If your argument is that they shouldn’t have been buying in the first place, I agree with you. If your argument is that somehow, if they lose their job in 2008 or beyond, they will be better of having put 10 or 20% down on the house or that that will keep them in the house, you are way off-base. They will still lose the house, they would just also be out their down-payment. Let the banks that are stupid enough to continue lending 100% take the hit (I admit to the counter-argument that in today’s world, continued sloppy lending by banks means taxpayers take the hit because all bank failures will arguable cause “systemic meltdown” and must be prevented at all costs).
December 3rd, 2008 at 7:38 pm
Nice catch Days. Hail, hail Chuch Berry, and great song too, although Ford Motor Company probably doesn’t think so…
December 3rd, 2008 at 7:58 pm
Thanks for the comment Rick.
“If your argument is that they shouldn’t have been buying in the first place, I agree with you. If your argument is that somehow, if they lose their job in 2008 or beyond, they will be better of having put 10 or 20% down on the house or that that will keep them in the house, you are way off-base.”
Actually, by the end of the post I was thinking more about the impact of the recession on employment and the housing market. Should these individuals lose their jobs and become unable to pay their mortgages, I would think they would walk and the home added to the existing housing supply for sale.
December 25th, 2008 at 12:34 am
Why this web site do not have other languages support?
January 7th, 2009 at 10:32 pm
Thanks for the comment work and travel.
“Why this web site do not have other languages support?”
Sorry, but the translator I’m using is the best one out there that I know of. If you, or another reader, knows of a better alternative, please contact me and I will seriously consider it. Thanks!