Homebuyers More Cautious with Their Money

22 10 2006

Compared with a year ago, more adults are buying homes at prices they can afford rather than trying to stretch themselves financially.

Among those who have purchased a home in the past three years, 78 percent say they bought within their price range, up from 67 percent last year, according to a survey conducted by Harris Interactive for Wall Street Journal Online.

Single adults are more likely than married people to stretch their finances; 30 percent of single adults, compared with 15 percent of married couples, say they purchased a home above their price range.

Thirty-eight percent of borrowers said they used “creative” or “pay option” mortgages, up from 33 percent a year earlier.

Fourteen percent used interest-only mortgages, which let them avoid paying principal in early years of the loan. That’s down from 17 percent a year earlier.

Another 12 percent combined traditional mortgages with home equity loans or other lines of credit. Nine percent used mortgages that let them choose what to pay each month, and 3 percent took out mortgages that let them skip some payments.

Source: Planet Realtor


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