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66% of First Time Buyers Use Low Down Payment Mortgages

There is a reason why new home sales still remain in a slump. New home sales cater to an economy where most family income is rising to support the cost of higher priced homes. In many markets, new homes cater to first time buyers. But the first time home buyer market is mired in problems. In more expensive metro areas you have younger people simply unable to afford rents let alone the cost of a crap shack. In many other parts of the US families are simply dealing with an economy that isn’t seeing across the board wage increases. Low interest rates have to remain to keep the monthly payment static. At least that is what the Fed is hoping for. There was some recent data showing that first time home buyers continue to make up a small portion of all sales. Contrary to some false narrative, many first time home buyers are coming in with low down payments, not suitcases of cash. And for the most part, this is being driven because Americans overall don’t have much in savings and barely enough to cover a dinner at Taco Tuesday with a side order of guacamole if you are being a big spender.

Here is a chart of the percent of first time home buyers entering the market with low down payments:

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