[jacv]

I would think this could help with people trying to buy their first place.

I think a fair amount of people - particularly those in HCOL cities - could afford monthly payments that are on the high side, but saving for a 20% deposit has been more difficult because of how high prices have been (ie, stuck in a rent cycle of only saving a bit because of how high rent is and so on).

[bushbaba]

Same markets offer 5% or 0% down loans. Financing isn’t the problem it’s the monthly cost. Rent is cheaper than owning in Seattle, LA, and SF metro areas for a large portion of the housing stock.

[jacv]

I don’t think I agree with you. I don’t know of a lender offering 0% down loans for people in those markets (the only thing I could find was VA loans or USDA), but could be wrong.

For a large portion of people, monthly cost is not the big problem. A 20% down payment on an median home price of $850k (Seattle), $1M (LA), $1.3M (SF) (all these taken from google’s results) is because it’s very hard to save that much money when you’re paying median rent of $2.7k (Seattle), $3.3k (LA), or $4k (SF) (Zumper, 2bd apartment).

All else equal, I think a lot of people when trying to buy for the first time would prefer lower house purchase price with higher interest rate because of saving for a down payment vs the same house at a higher price and lower interest rate.