During the recession of 2009, the number of Boston North Shore home buyers depending on down payment assistance from family members or friends tripled. It’s estimated that roughly 21% of homes were purchased by homeowners using a gift or a loan as their down payment. Let’s look at why that need may still exist.

Boston North Shore Home Buyers – “Who Can Save Today?”

Boston North Shore home buyers still need help from family these days to buy their first home

According to a recent analysis of Zillow of federally-provided real estate sales data, the percentage of Boston North Shore home buyers needing down payment help from their families is still higher than it was before the 2009 housing crisis. The 21% number mentioned above dropped to just over 13% in 2014. However, compared to 2007 when only 8% of purchasers required assistance from friends or family, the percentage is substantial.

The Zillow report spotlights one glaring reason the need exists for many prospective Boston North Shore home buyers — the absence of savings. In order to keep monthly mortgage payments close to or less than what they are paying in rent, first time homebuyers usually need cash for a down payment. That can be a challenge, and it’s the main reason during the recession — and even now — prospective purchasers seek help from their family.

In what the Zillow data characterizes as “middle-income households” 25% of Boston North Shore home buyers turned to friends or family members for help with their down payments in 2014. During that same year, only 15% of low-income and 16% of high-income households received assistance for their down payments.

Real estate experts say skyrocketing rents, a high percentage of student loan debt and slow income growth are among the factors preventing many first-time Boston North Shore home buyers from being able to save money for a down payment. More troubling to some insiders is what is seen as a potentially widening gap in inequality. Assistance networks and programs available to low-income households may not be able to sustain that assistance, while higher-income home buyers may not need the help.

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First-time Boston North Shore home buyers are especially reliant on friends and family for help with the down payment. Not only are their rents high, but mortgage credit is tight, making their entry into the homeownership arena “iffy” at best. In addition, home values and sales prices have increased. And as prices increase, so do the down payment requirements. Naturally, as first time home buyers, they have no cash from the sale of a previous home to fall back on.

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