For homebuyers, down payment trumps interest rate

The size of the down payment, not the interest rate, more often determines what buyers are willing to pay for homes, according to a study by the Federal Reserve Bank of New York. “A change in down payment requirements tends to have a large effect on housing demand — households’ willingness to pay for a given home — especially for current renters, whereas the effects of a change in the mortgage rate are modest,” the researchers wrote. “The price of available financing (that is, the mortgage…
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