The National Association of Realtors recently completed a study of today's home buyers and sellers. Home buyers are staying well within their means with notably higher incomes and modestly higher down payments than buyers in the previous year due to the restrictive mortgage credit environment, despite historically favorable housing affordability conditions.
Paul Bishop, NAR vice president of research, clarified the impact of unnecessarily restrictive mortgage credit. “The bar has been raised to qualify for a loan. Buying your first home has never been particularly easy, but with record-high housing affordability conditions and a pent-up demand, we normally would expect a stronger performance,” he said. “This underscores how important it is to open the credit spigot for creditworthy buyers – banks simply need to get back into the business of lending. Higher home sales would help create jobs through related economic activity.”
Fifty-four percent of first-time buyers financed with a low-down payment FHA mortgage, and 6 percent used the VA loan program which requires no down payment.
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