Changes in Down Payment Requirements Impact Housing Demand

According to several economists, a change in down payment requirements “tends to have a large effect on housing demand – a households’ willingness to pay for a given home.”

The economists, Andreas Fuster and Basit Zafar of the Federal Reserve Bank of New York’s Research and Statistics Group, say this is especially true for current renters. However, the effects of a change in the mortgage rate to housing demand are modest.

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