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Serious question. According to articles the vast majority of Americans have little to no savings with various levels of debt. The question is, how can so many people then afford down payments on homes?
Not the same people. And about 60% or so of American families own their own home, so it isn't rue that the vast majority have no savings.
Although, if you are talking about a high level of debt, that would include the majority of home owners because they have a mortgage on their house, which is debt at a pretty high level for some of them.
Because they lend money to people with very little money down. So no need to have lots of savings shamefully.
Its no different than before 2008 except there is unfortunately a shortage of homes available and they actually check income without the complete liar loans.
In fact regarding the amount of money down required, interest rates and easy financing it is actually much worse than before 2008 aside from income verification actually being required which is really only how it is better than pre 2008. Otherwise it is as bad or much worse.
At least before 2008 there was a chance prices would budge and not stay so high which happened and interest rates were normalized eve with the liar no doc income loans. Now there is a shortage of homes, so prices are not gonna come down sadly to the detriment of responsible savers who want good down payments so they are not mortgaged up the wazoo and their downpayment years down the road goes just as far as it did when they started saving. Thus flat home prices are the best.
Maybe they have no savings BECAUSE they bought a house.
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Quote:
Originally Posted by Mikala43
Maybe they have no savings BECAUSE they bought a house.
Yes, many saved for the down payment, bought the house, and now have no more savings. That's how it was for us when we bought our first house in 1978. We currently have more savings than ever before but that's because we bought this house in 1993 and have stayed here, so no more need for another down payment. Our 3 savings accounts are all in different credit unions.
Serious question. According to articles the vast majority of Americans have little to no savings with various levels of debt. The question is, how can so many people then afford down payments on homes?
I have read that people have more saved now than ever before. Guess it depends on whatcha read.
Well, "owning a house" can mean a lot of different things. At the one end, you might keep it in great shape and own the house free and clear, while at the other end, you might have bought it with 5% down and have trouble making the payments and paying for maintenance and repair, you might have re-mortgaged it several times while taking out home-equity loans. "Owning a house" doesn't mean you necessarily have significant assets.
Serious question. According to articles the vast majority of Americans have little to no savings with various levels of debt. The question is, how can so many people then afford down payments on homes?
There are some down payment assistance programs available, but they are not very generous. Discounting inheritances, people that have investment income and people that purchased a home more than 10 years ago, I do not know how the average American family can afford a home right now.
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