Builders may want to fasten their seat belts even tighter; data released yesterday by the U.S. Census shows that a significant share of both likely new-home buyers and recent home purchasers (both new and existing) did not have a down payment when they bought their home.

According to the 2007 American Housing Survey, 12.5 percent of the more than 4.5 million owner-occupied households living in "new construction" did not have a down payment. (The American Housing Survey defines "new construction" as housing constructed within the past four years of the survey year.)

That figure jumped even higher for those 5.2 million householders who purchased their residence (either new or existing) within the previous year, to 16.9 percent. 

Both those figures register higher than the results for owner-occupied homes as a whole. Overall, 9.4 percent of the 70.3 million owner-occupied households said they did not have a down payment when they purchased their house. 

This new down-payment data is troubling for builders, who have grown increasingly reliant on seller-funded down-payment assistance (DPA) programs in the last year as the economy has faltered. Housing analyst Michael Rehaut of JPMorgan estimates that such seller-funded DPA was responsible for as much as 17 percent of home sales among public builders.

But Congress, concerned about higher default rates on mortgages reliant on such down-payment help, eliminated these programs as of Oct. 1. In addition, lending requirements have tightened dramatically, making mortgages difficult to get even for buyers with good credit. Builders have tried to turn the $7,500 temporary tax credit for first-time home buyers into a partial replacement for DPA, but the tax credit itself doesn’t seem to be a powerful enough incentive for consumers, given the current economic situation.

Among those who did have a down payment on their home purchase, the major source of that money was the sale of a previous home. That was the case for 44.3 percent of those living in new construction; 32.6 percent of all owner-occupied householders; and 29.9 percent of those who bought their home within the past year.

The next largest source of down-payment money was savings or cash-on-hand, which provided the major dollars for 44.1 percent of all owner-occupied householders; 35.8 percent of those who purchased their house within the previous year; and 28.5 percent of those living in new construction.

Alison Rice is senior editor, online, at BUILDER magazine.

By the Numbers: New Homes and Down Payments
Here is how much owner-occupied householders living in new construction contributed to the purchase of their home, which would have been built within the previous four years:

No down payment: 12.5%

Put less than 3 percent down: 8.3%

Put 3 percent to 5 percent down: 7.6%

Put 6 percent to 10 percent down: 12.6%

Put 11 percent to 15 percent down: 5.2%

Put 16 percent to 20 percent down:  10.4%

Put 21 percent to 40 percent down: 10.9%

Put 41 to 99 percent down: 7%

Bought house outright: 7.4%

Down payment not reported: 18%

Source: American Housing Survey, 2007