I also read today the NAR said 40% of homes were by first time buyers moving into a new house.
The NAR is worried - they have assaults on them from the gubbment for thier listing cartel structure, assaults on them from banks moving into their industry and cutting them out of the profits, markets that may potentially collapse killing thier business model - and all the lobbying corruption is being exposed so they may have to cut back on that and some of their best paid for "friends" might be going to jail - they are in bad shape.
usatoday.com
43% of first-time home buyers put no money down
By Noelle Knox, USA TODAY
WASHINGTON — As housing prices soared last year, an eye-popping 43% of first-time home buyers purchased their homes with no-money-down loans, according to a study released Tuesday by the National Association of Realtors.
The trend is potentially ominous. The real estate market is cooling in some areas, and rates on adjustable-rate loans are creeping up. As a result, some no-money-down buyers could owe more than their homes are worth.
The median first-time home buyer scraped together a down payment of only 2% on a $150,000 home in 2005, the NAR found.
Already, home prices in many areas are declining, and the "For Sale" signs are hanging in front yards longer. There's now at least a 50% risk that prices will decline within two years in 11 major metro areas, including San Diego; Boston; Long Island, N.Y.; Los Angeles; and San Francisco, according to PMI Mortgage Insurance's latest U.S. Market Risk Index.
"In a number of areas, particularly on the coasts, they have a high risk of price declines in the next two years," says Mark Milner, chief risk officer of PMI.
Red-hot home building, acquisitions, remodeling and refinancing in recent years helped drive the economy and raise fears of a real estate bubble. Dean Baker of the Center for Economic and Policy Research says that if housing prices fall at least 10%, it could be even more damaging than the collapse of the high-tech stock bubble in 2000.
"If we do get a spike in mortgage rates, and a modest decline (in the housing market) turns into a rout, there's almost no bottom to that," Baker says. "That's a crash scenario."
Baker and other economists are concerned that many lenders have pushed a series of creative but potentially dangerous loans to help more Americans afford a home. The traditional 30-year loan with a fixed rate remains the most popular way of financing, according to the Mortgage Bankers Association. But about one-third of homeowners take out riskier loans, such as interest-only or flat-minimum-payment mortgages.
"These non-traditional loans transfer risk to the borrower," Milner says.
NAR President Thomas Stevens says he isn't worried that nearly half of first-time home buyers put no money down, but adds, "If the number was higher than that, I'd be concerned."
Billions for the bankers - debt for the people - but gpowell tells me we dont need to regulate banks - they are self policing I guess and would never misallocate.
The borrower is gonna bear the debt monkey on his back his entire life while the banks liquidate at the profit party. |
