The incredible, disappearing home down payment

By Christopher Matthews | AXIOS

Many real estate markets across the U.S. are in the midst of an affordability crisis because of rising home prices, tight access to credit, and a homebuilding industry that has been slow to build new homes. That’s made it hard for renting millennials — the oldest of whom are well into the prime homebuyers years of their mid-thirties – to afford down payments. 70% of them in a recent survey by real estate data company Zillow said that saving a down payment was the single biggest factor preventing them from buying,

Why this matters: Entrepreneurs across the country are recognizing the opportunity to profit from a broken real estate finance industry that is failing to serve many prospective homebuyers. Startups like Unison and Loftium are looking to profit by investing money upfront with real estate shoppers.

Homeownership has been becoming more expensive for decades — the median price of a new home in 1974 cost 1.7 times the median income, today that figure is at 2.6. This trend, however, was papered over by the explosion of easy mortgage lending that began nearly twenty years ago and culminated in the bursting of the real estate bubble in 2006.

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