First-Time Buyers More Likely To Make Down Payment Of Less Than 20 Percent

A December survey of REALTORS found that 81 percent of first-time buyers who closed a house in Q4 2016 made a down payment of less than 20 percent

The Economists’ Outlook blog said that, in comparison, 62 percent of all buyers paid less than 20 percent during the same time frame.

Over the last few years, agencies such as the Federal Housing Authority have made credit more available for first-time buyers. Government-backed lenders such as Fannie Mae and Freddie Mac offer mortgage products with only 3 percent down payments.

However, the impact of these measures in attracting first-time homebuyers appears to be modest for a variety of reasons. Lack of information about low downpayment products may be one reason.

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