By ALEX VEIGA AP {Business|Company|Service|Organization} {Writer|Author} LOS ANGELES (AP)– Even with {mortgage|home loan|home mortgage} rates hovering near {all-time lows|lowest levels}, {rising|increasing} {home|house} {prices|costs|rates} are putting more pressure on {buyers|purchasers} to come up with {a bigger|a larger} {down payment|deposit}.
5 November 2020
Subscribe for $5/5 months A for sale {sign|indication} stands in front of {a house|a home}, Tuesday, Oct. 6, 2020, in Westwood, Mass. Even with {mortgage|home loan|home mortgage} rates hovering near {all-time lows|lowest levels}, {rising|increasing} {home|house} {prices|costs|rates} are putting more pressure on {buyers|purchasers} to come up with {a bigger|a larger} {down payment|deposit}. The {trend|pattern} is {stretching|extending} the {limits|limitations} of {affordability|cost|price} for {many|numerous|lots of} Americans {already|currently} {struggling|having a hard time} to {save|conserve} for {a down payment|a deposit} as {incomes|earnings} {fail|stop working} to keep {pace|speed|rate} with {home|house} {values|worths}.
In the April-June quarter, the {median|average|mean|typical} {down payment|deposit} on a single-family U.S. {home|house} was $13,955, a 15.3% {increase|boost} from a year {earlier|previously}, according to {industry|market} tracker Attom Data Solutions. In the {first|very first} {three|3} months of 2020, it {vaulted|rose} 29% from the {same|exact same|very same} {period|duration} in 2019.
The {trend|pattern} follows {a steady|a stable|a consistent|a constant} climb in U.S. {home|house} {prices|costs|rates} this year. {As of|Since} August, they were up 5.2% from a year {earlier|previously}.
The {rise|increase} in {home|house} {prices|costs|rates} is {stretching|extending} the {limits|limitations} of {affordability|cost|price} for {many|numerous|lots of} Americans {already|currently} {struggling|having a hard time} to {save|conserve} for {a down payment|a deposit}.
“{Home|House} {values|worths} are increasing {approximately|roughly|around} {twice|two times} as {fast|quick|quickly} as {typical|common|normal} {incomes|earnings},” {said|stated} Chris Glynn, senior {economist|economic expert|financial expert} at Zillow. “There’s this divergence {between|in between} {home|house} {values|worths} and the {salaries|incomes|wages} and {incomes|earnings} that {buyers|purchasers} {have to|need to} {keep up with|stay up to date with} that.”
That divergence {shows|reveals} no {signs|indications} of {easing|relieving|alleviating|reducing}, {given|provided|offered} the {combination|mix} of {extremely|incredibly|very|exceptionally} low {inventory|stock} of {homes|houses} on {the market|the marketplace} and {fierce|intense|strong} {competition|competitors} as more millennials {look to|want to|seek to|aim to} {transition|shift} from {renting|leasing} to owning.
{Demand|Need} for {homes|houses} {has|has actually} been strong this year, {despite|in spite of|regardless of} {a brief|a short|a quick} {slowdown|downturn} in the early days of the pandemic. Sales of {previously|formerly} {occupied|inhabited} U.S. {homes|houses} {surged|rose} 9.4% in September to a seasonally {adjusted|changed} {annual|yearly} rate of 6.54 million, according to the National Association of Realtors.
That sales {pace|speed|rate} was the {highest|greatest} {since|because|considering that|given that} February 2006, the peak of the last {housing|real estate} bubble, and left {just|simply} 2.7 months of {available|offered|readily available} {homes|houses} on {the market|the marketplace}, a record low.
The thin {inventory|stock} of {homes|houses} {helped|assisted} {drive up|increase} the {median|average|mean|typical} {selling price|market price|asking price} to $311,800, up 15% from a year {earlier|previously}, according to NAR.
{A closely|A carefully} {watched|viewed|enjoyed|seen} {measure|step|procedure} of {home|house} {values|worths}, the S&P CoreLogic Case-Shiller 20-city {home|house} {price|cost|rate} index, {has|has actually} {also|likewise} been clocking {rising|increasing} {home|house} {prices|costs|rates}. In August, its most-recent {snapshot|picture|photo} {available|offered|readily available}, {prices|costs|rates} {climbed|climbed up} 5.2%, {accelerating|speeding up} from a 4.1% gain in July.
Ultra-low {mortgage|home loan|home mortgage} rates {have|have actually} been {a key|an essential|a crucial} {driver|chauffeur|motorist} for the {housing|real estate} market. The {average|typical} rate on a 30-year fixed-rate {mortgage|home loan|home mortgage} was at 2.81% {last week|recently}, {little|bit|little bit} {changed|altered} from the {all-time low|lowest level} of 2.80% the previous week. The rate {averaged|balanced} 3.78% a year {ago|back|earlier}.
While low {mortgage|home loan|home mortgage} rates {have|have actually} made {monthly|regular monthly|month-to-month} {home loan|mortgage|home mortgage} payments more {affordable|inexpensive|economical|budget-friendly|cost effective|budget friendly}, they {don’t|do not} {alter|change|modify} the {fact|truth|reality} that {most|many|a lot of|the majority of} {down payments|deposits} are indexed to some {percentage|portion} of the {sale price|price|list price} of {a home|a house}. {So, {higher|greater} {prices|costs|rates} {lead to|result in|cause} {bigger|larger} {down payments|deposits}.
| {Higher|Greater} {prices|costs|rates} lead to {bigger|larger} down payments.
}”The {second|2nd} side of that coin is that {getting into|entering into|entering} the position where you have {a down payment|a deposit} for {a home|a house} to {begin|start} with {has|has actually} continued to get {more difficult|harder},” Glynn {said|stated}.
{How much|Just how much} {a buyer|a purchaser} {opts|chooses|decides} to put down on {a home|a house} can {vary|differ} {widely|commonly|extensively}, {depending on|depending upon} their {mortgage|home loan|home mortgage}. Some government-backed {home loans|mortgage|home mortgage} {require|need} {as little as|as low as|just} 3% down, while {homebuyers|property buyers} who {want to|wish to} {avoid|prevent} paying {private|personal} {mortgage|home loan|home mortgage} {insurance|insurance coverage} premiums will put down {at least|a minimum of} 20%.
The {average|typical} U.S. {median|average|mean|typical} {down payment|deposit} {has|has actually} {ranged|varied} {between|in between} 10.6% and 11.8% {going back|returning} to 2014, according to {data|information} from Realtor.com drawn from 35% of {mortgage|home loan|home mortgage} {transactions|deals} {nationwide|across the country}.
{A recent|A current} analysis by Zillow {underscores|highlights} how {costly|expensive|pricey} it can be to {save|conserve} up for a 20% {down payment|deposit} on {a home|a house} {these days|nowadays}. The {real estate|realty|property} listings and {data|information} {company|business} {found|discovered} that it would take {nearly|almost} {eight|8} months for a U.S. {household|home|family} making the {median|average|mean|typical} {annual|yearly} {income|earnings} of $83,675 to {save|conserve} up the $51,981 {needed|required} for a 20% {down payment|deposit} on a $259,906 {home|house}. That {home|house} {price|cost|rate} is {based on|based upon} the average of the middle-third of the {housing|real estate} market.
{Apply|Use} the {same|exact same|very same} calculus to San Francisco, with {a median|an average|a mean|a typical} {home|house} {price|cost|rate} of $1.11 million, and it would take 17.1 months to come up with the $222,733 {down payment|deposit} on {a median|an average|a mean|a typical} {income|earnings} of $156,373. {In contrast|On the other hand}, {homebuyers|property buyers} in Cleveland have a more {manageable|workable} {hurdle|obstacle|difficulty}, {needing|requiring} a little over {five|5} months’ worth of the {median|average|mean|typical} {income|earnings} of $78,731 to {pull together|gather} the $33,387 {down payment|deposit} on a $166,936 {home|house}.
The {housing|real estate} market’s {trends|patterns} {point to|indicate} {higher|greater} {home|house} {prices|costs|rates} and, as {a result|an outcome}, a longer {road|roadway} to {saving|conserving} for {a down payment|a deposit}. {Home|House} {prices|costs|rates} {have to|need to} {come down|boil down} or {incomes|earnings} {have to|need to} {rise|increase} {sharply|dramatically|greatly} to {ease|relieve|alleviate|reduce} the {financial|monetary} pressure on {buyers|purchasers}.
In {terms of|regards to} {home|house} {prices|costs|rates}, {at least|a minimum of}, that {doesn’t|does not} {seem likely|promise}. Zillow {expects|anticipates} the {price|cost|rate} of {a typical|a common|a normal} U.S. {home|house} to {rise|increase} 7% over the next 12 months.
“What that {means|implies|indicates|suggests} is {an additional|an extra} $3,600 {toward|towards} {a down payment|a deposit} for the {median|average|mean|typical} U.S. {home|house},” {said|stated} Glynn. “That {means|implies|indicates|suggests} you {have to|need to} {save|conserve} {an additional|an extra} $300 a month over the next year {just|simply} to {keep up|maintain}.”
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