I disagree. If borrowers are unable to afford a down payment, that almost certainly means they have very little financial flexibility, which is necessary when owning a home.
I think you’re looking at this one particular point in a vacuum. On the surface it would appear that someone that can’t produce $20k-$40k cash to put down on a house doesn’t have the financial wherewithal to produce $20k in cash that may be needed to replace a roof or HVAC system on a house.
However, zoom out a bit and you’ll see these non-homeowners have been financially savvy to successfully navigating rental rates outpacing inflation by 40%! source. Once they have a fixed rate mortgage, their ability to plan an save for home repairs becomes much more attainable.
Ask yourself this: How would your personal finances look right now if your house payment had been rising every year for the last decade and is now 40% higher that when you signed your mortgage paperwork?
I think you’re looking at this one particular point in a vacuum. On the surface it would appear that someone that can’t produce $20k-$40k cash to put down on a house doesn’t have the financial wherewithal to produce $20k in cash that may be needed to replace a roof or HVAC system on a house.
However, zoom out a bit and you’ll see these non-homeowners have been financially savvy to successfully navigating rental rates outpacing inflation by 40%! source. Once they have a fixed rate mortgage, their ability to plan an save for home repairs becomes much more attainable.
Ask yourself this: How would your personal finances look right now if your house payment had been rising every year for the last decade and is now 40% higher that when you signed your mortgage paperwork?