Money Mortgage

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

We were asked recently in a radio interview if the L.A. housing market is reverting to traditional financing, with buyers making 20% down payments. Um, we said articulately, we don’t think so -- L.A. is just not a 20% down payment market. There aren’t enough buyers with $100,000 in the bank.

This personal finance profile in today’s L.A.Times sheds more light on that issue. It profiles a couple with $13,000 in savings, and contains the following advice from a financial planner: don’t buy a house until you’ve saved enough for a 5% or 10% down payment.

So -- is 5% down becoming the new ‘no-money-down’? And if it is, doesn’t that make the market even worse, because so many prospective buyers don’t have a 5% downpayment in the bank?

Your thoughts, as always, are anticipated and appreciated.