First-Time Homebuyers Are Putting Less Down

A National Association of REALTORS survey of 7,548 home buyers from mid-2005 to mid-2006 reveals that close to half obtained mortgages for 100 percent of the sales price. During this period, NAR says the median down payment for first-time buyers was 2 percent while the median for trade-up buyers was 16 percent. The emergence of piggyback loans that involve an 80-percent or 90-percent first mortgage and a 10-percent to 20-percent second mortgage enabled these buyers to contribute less than the traditional 20-percent down payment; and, in the midst of a housing slump, many now owe more than their homes are presently worth. Regionally, the median mortgage amount was 100 percent in the South, 99 percent in the West, 98 percent in the Midwest, and 96 percent in the East.

Baltimore Sun (02/09/07) Harney, Ken