In some markets, prices were rising far faster than a reasonable ability to save. If you were able to save $10K/year toward the downpayment, and prices were rising by $25K, you were falling further behind in purchasing power each year. Granted, the easy financing fueled some of that appreciation.
A lot of people might have still come out okay if they left their equity where it was, provided they could still make monthly payment. But people started that cash-out refi stupidity to use their equity for cars, vacations, new furniture, and all that crap.
I would never put down less than 5% on a house. That way, if you had to sell a year or two down the line, if prices at least stay constant, you can afford the realtor's comission to sell the place and break even. |
