Home Buyers Boost Debt to Make Purchase

The share of first-timers who bought homes in California dropped to 27.1 percent in 2006 from 30.5 percent in 2005, according to data released by the California Association of Realtors. At the same time, the C.A.R. survey found buyers who used a second mortgage to finance home purchases climbed to 43 percent last year from 38 percent in 2005, the highest percentage since 1982. And zero-down payments increased to 21.1 percent in 2006, from 4.5 percent in 2000. “Two out of five first-time buyers made a zero-down payment on their home purchase, while just one in 10 repeat buyers purchased their home with no down payment,” said Leslie Appleton-Young, C.A.R. vice president and chief economist, in a statement. Home sales in Southern California declined 23 percent versus 2005 while the median price of a home increased a mere 2 percent versus 14 percent in 2005.