I’m in agreement in general with the larger down payments and tighter lending guidelines. But we just have to be OK with the consequences:

1. home prices continuing to fall
2. the homeownership rate in America will continue to fall
3. in the lower end neighborhoods of SD most buyers will never be able to save up the 10% down unless house prices fall to say $100k in those areas (b/c you don’t just need 10% down, you need reserves on top of that 10%, closing costs,… what if the roof leaks? furnace breaks? Job loss?)
4. this may cause lower end neighborhoods to deteriorate further b/c more investors will own houses and less owner occupied, and neighborhoods will become mostly renters