Based on data from NorthstarMLS, I was able to put together the following chart that shows how home buyers in the first 1/2 of 2010 were financing their purchases. Fully 1 in every 6 buyers paid in cold hard cash, a huge increase from the 1 in 20 to 1 in 25 ratio more typical of this market.
While our MLS does not track the data necessary to confirm it, in my experience the vast majority of cash purchases are investors/rehabbers – I would put the number at 75% or higher.
I’m all about renting these days, but I can totally understand the motivation toward owning your own home. My only problem is I want to put a large down-payment to buy a home. How much should I put down?
3.5% down is the minimum but how much you decide to put down is largely based on your own situation and priorities. At interest rates under 5%, some of my clients prefer to keep their cash to pay down other debts while others have no other debts and so they want to keep their monthly payments low.
The best thing to do is to talk to your loan officer and run some numbers given different options.
Thanks for the reply. I’ll be sure to do that. Great advice!