Cash? Conventional financing? FHA loans? Down payment assistance programs? Seller carry?

I mistakenly assumed that we were seeing an increase in the number of buyers paying cash this year.

(Click on the chart for a larger view.)

In actuality, conventional financing has been and continues to be the primary means that home buyers are using to purchase homes in our city. Cash is consistently the second source of payment.

The other changes that you are seeing are not surprising. The number of homes purchased with FHA loans are increasing. Down payment assistance programs are declining (and have gone away).

Other payment choices used were so minimal, I did not graph, although I have included them in the chart below.

 
I know these percentages are quite different than in many other areas of the Phoenix Metropolitan area. For instance, in the first quarter of this year, 11% of the homes purchased in the metro area used FHA financing, and I would suggest that the number is even higher now.

We are going to see changes in how homes are paid for. In years, past, FHA fell out of favor as lenders created many other financing options. With a down payment requirement of only 3.5%, and most conventional programs now requiring 10-20% down, FHA is a very viable option for first-time home buyers in Scottsdale. Scottsdale home prices have decreased, and many more now qualify for FHA financing, which currently has a ceiling of $346,250, but is expected to decrease at the beginning of the year.

We shall see if the number of cash buyers increases this fall. It’s just too early to tell.  I’ll update this chart at the end of the year. It will be interesting to see how this financial chaos will impact financing options. Stay tuned.