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Home Purchases With Low Down Payments Fall

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The number of California homes purchased with a down payment of 5% or less fell sharply from last year’s high levels after rising steadily for several years, according to a report by DataQuick Information Systems. During the third quarter, the number of home buyers who put down 5% or less of the purchase price totaled 34,359--an 18% drop from the same period last year. The year-ago figure was the second-highest on record, according to DataQuick. The number of such buyers more than tripled from 1990 to 1999, far outstripping California’s overall increase in home sales. “The easiest conclusion to reach here is that rising prices are pushing entry-level buyers out of the market,” said Mike Ela, DataQuick’s president. However, Ela noted that prices in entry-level neighborhoods where low down payments are popular have not risen as rapidly as in more pricey communities. In Southern California, the number of low down-payment purchases fell 17.7% from last year.

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