This guy says there are 5-6 million people who were or could be homeowners but are on the sidelines – the buy vs. rent equation isn’t compelling enough.
She says these potential buyers don’t have the down payment and don’t know about FHA, but she might be guessing. Though FHA is very expensive and caps out at $546,250, it’s definitely a viable option in San Diego County. Of the 14,129 house sales this year, 1,459 of them (10%) have been financed via FHA.
Remember when we said that the market would be seasoned when we see more FHA and VA purchases…..the bidding wars would have died down, and buyers with more horsepower have passed on those deals? Here are the percentages of FHA+VA loans used to purchase SD houses:
2011 = 35%
2012 = 31%
2013 = 25% (FHA got tougher in June, 2013)
2014 = 25%
There are more VA loans than FHA this year (59% vs 41%).
“Down payment”,
I could see them going to zero Down (with W2 doc’s),
Even the 3.5% FHA can be a blocker for some people.
580 credit score should not be a blocker.
Agreed – if PMI companies will insure them (which is just a risk equation) we should take out the limits on down payments and loan amounts.
Or how about a sliding scale? The higher your FICO, the lower down payment required.
I’m one of the first-time buyers on the sideline. Combined income with fiancee around 120k, FICO north of 700, could probably muster 50k for a downpayment.
A multitude of reasons why we’re on the side-lines, limited inventory, asking prices in some instances seem to be unreasonable, mortgage rates + payments seem feasible but then factor in the new tax bill due to prop 13 and HOA fees and then it becomes too much.
I’m rooting for a jump in interest rates b/c I think it will be the only thing to push prices down.