What’s Up with Down Payments?

Savings, gifts more frequently used as housing down payments as proceeds from prior home sales slide

Not long ago, homebuyers regularly used the proceeds from the sale of their former home as a down payment on their new residence. But in today’s tough financial climate, that is a less common method. According to Profile of Home Buyers and Sellers, prepared by the National Association of Realtors, 66 percent of repeat buyers used money from the sale of a primary residence as a down payment source in 2005; by 2010, that figure had dropped to 43 percent. During the same five-year span, the number of first-time and repeat buyers using savings for a down payment rose from 50 percent to 66 percent. The use of a monetary gift from a relative or friend rose from a low of 9 percent in 2006 to a high of 18 percent in 2010.

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