Another factor: The elimation of zero down that we are seeing impacts first-time buyers. I paraphrase this from comments at another blog.
40% of FTBs in CA put no down payment; this puts them out of the market–they actually want to buy, and can’t get financing.
So 40% of FTB don’t get loans. Since FTBs made up about 30% of CA purchases in 06, you’ve just eliminated about, what, 12% of prospective buyers on this basis alone.
