Down Payment

I do not like the idea of bigger profits for banks, but I also do not like the idea that a large swath of the US population would be forever locked out of home ownership (if they want it) because of the difficulty associated with saving up a down payment while paying rent. Zero/low % down mortgaging makes it easier for people to enter the housing market.

The one thing about places like Patrick.net that really bothers me is the notion that many have that people who can't save up a down payment are deadbeats or spendthrifts and don't deserve a house.

Saving is not easy, especially on lower incomes. One of the benefits of buying a dwelling is that it becomes a forced savings tool. Especially if the total monthly payment for purchasing is similar to what rent was/would be, then purchasing wins. Low barrier for entry combined with proper due diligence by banks means that buying a house can be, for many people, the best way for them to save and prepare for retirement.

But not everyone should buy. Purchasing a house is something to be done only by people who plan on staying there for an extended period of time...the longer the better. A house is not an investment in the same way that stocks are. You can't really cash out (and to the extent that banks allow you to, you shouldn't). The "growth" potential is really limited to inflation only (though this is also the exact reason that people staying a while should buy...no rent increases).

In the end the way we have been purchasing houses on the social side has been bad. It was encouraged by banks that didn't see any downside, and realtors who didn't have any downside. That needs to change, but to raise the barrier for entry will exclude large segments of the population from home ownership...and not the right segments. People that move around shouldn't buy. People who live in one place their whole life should...the latter category is generally lower income.