First Time Home buyers Tapping Bank of Mom and Dad

More first time home buyers are turning to the bank of mom and dad.  A new FHA study shows borrowers who used FHA insured loans got help with the down payment from a relative in 26% of cases last year.  That's up from 22% in 2011. 

The study, published in the Wall Street Journal, shows those FHA borrowers are usually first time home buyers with weaker credit profiles.  Even though the rise of housing prices has slowed, its still going up and mortgage rates are higher which creates more challenges for first time home buyers.

Some analysts say parents helping their children with down payments is perpetuating a supply demand imbalance in some markets where prices continue to rise and supply is low.

Cristina Mendonsa

Cristina Mendonsa

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