The housing market continues to change and one of the largest changes in 2009 was the resurgence of FHA financing.  As lenders have tighted up financing requirements and increased down payments from 0% a few years ago to predominantly 10% today, FHA’s more forgiving standards and lower 3.5% down payment requirement have made it a very popular tool in the last 12 months.  In fact, FHA financing has zoomed from 3% of sales in 2007 to 37% in 2009 – just two years later!  That is an over 1000% increase!

The other very interesting trend is the dramatic increase in cash transactions.  In 2007 and years prior, Cash purchases made up approximately 5% of total properties purchased.  In 2009, that number had soared to 17% – a 240% increase in just 2 years!  This substantial shift is largely related to the increase in foreclosure property sales – many of these properties are in such bad shape that they cannot be financed.  In other cases it is an investor buying for solid cash flow as a rental or to rehab the property and resell.