Let’s add to that the 30% of all sales which were to investors. How much did those investors put down? They could buy one or more investment properties with no money down, so why would they put anything down? Those who put money down probably used their home equity from their other home. That’s not money down, if it’s just debt moved from one place to another. Money down is money you earn and save.
I remember reading a voice of san diego article that said 68% of buyers in San Diego in 2004-2006 used ARMs and I/Os. Now if you are that desperate and priced out that you have to resort to funny money loans while interest rates are at 5% (!), then you probably couldn’t scrape up $10K – $50K to put 1-5% down.
Mostly I say this because our savings rate is negative, and people have moved from earning and saving to living paycheck to paycheck, using debt from foreigners to fund the excess that the paycheck cannot cover. Stupid people!
