[old and tired]

This article portrays the problem as the 0 to 5 percent that folks have been putting down. I don't think that's the problem at all. FOr years, first time home buyers have been putting down 5 percent or less - VA and FHA loans have been available for years. I think people got ridiculous about what their first home, and its accompanying mortgage, should be. First homes should be a tiny little row home in a safe area. A house you can afford working at the local grocer if you lose your job. That house may never appreciate much, but after a few years you haven't been flushing rent money down a toilet and you've got 10 or 20 percent in equity to put down on a nicer house. But people don't think they need to live that way anymore.

Something the article touches on is somthing I've noticed - People just don't drive junker cars anymore. Even if you drive through West Philadelphia you're more likely to see a 2007 Camry than a vehicle from the 90's.

[Gabz]

What you describe is very close to exactly what my husband and I did. We lived in our first home for 11 years and so did have all the closing costs covered and 20% down for our second (current) home..........and I drive a ‘97 Escort :)

[joeystoy]

You’re right about the expectations regarding first homes. VA and FHA had upper limits on the amount they would finance. When I bought my first home (with an FHA mortgage) the maximum allowable loan amount was about $44,000 so we had to look for a home within that range. We got an attached 2-family for $44,000 that we sold seven years later for $128,000. Good deal all around.

But nobody is going to make me give up my BMW.

1995 BMW 525 with 128,000 miles. I bought it new and have kept it in top condition. Also haven’t made a car payment in eight years. Looking to keep it another 12 years.

[RockinRight]

A house you can afford working at the local grocer if you lose your job.

Um...what, a cardboard box? There are a few isolated places in the COUNTRY where real estate is that cheap and that was true before the recent run-up...unless you want to live in a neighborhood where you're likely to be shot.