[quote=ctr70]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[/quote]
ctr70, I think some of these lower-income SFR areas are already mostly rentals. If more investors come in with cash and rehab some of these dilapidated houses, it will only HELP the ‘hood to look nicer, one house at a time. It will also even help the sales comps when investor-cash is thrown at an area where previous owners were unable to maintain their homes.
I think it’s really okay if some areas are primarily rental areas. We need some of everything for everyone.
Raising the national “homeownership rate” is not improving citizen’s lives overall if those marginal families pushed into buying the “American dream” can’t make their tax and insurance payments or replace their water heater when it goes out. Promoting “homeownership for everyone” doesn’t do anyone any favors.
