Due to the market and the economy, new data this week has shown that Americans are saving more than they have in months. Eventhough this is not wonderful news for retailers and restaurateurs, it could be good news for the depressed housing market. Many potential homebuyers say they've stopped eating out, going to movies, buying iTunes and other nonessentials to save money for larger down payments that lenders now are demanding.
Lenders are back to wanting buyers putting down between 20 percent and 25 percent of house price in cash. Even loans insured by the Federal Housing Administration (FHA), a popular option for first-time homebuyers, now require at least 3.5 percent down, up from 3 percent last year.
If an America wants to buy a house these days, they need to be saving.
The personal savings rate rose to 3.6 percent in December and averaged 1.7 percent for 2008, the government said Monday. That's nearly three times the 2007 rate and far above the seven-decade low of 0.4 percent in 2004 - when lenders were wheeling and dealing in no-money-down mortgages.
AZCentral.com
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