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Homes: New down payment rules

New rules that came info effect in October 2008 have forced consumers to have a least five per cent down on any home purchase. Mortgages can also be amortized over 35 years, down from 40 years, making for a larger month payment.

The market is expected to get some relief from the fact that new listings are expected to decline, Mr, Klump, chief economist at CREA, said.

CREA president Calvin Lindberg said consumer confidence has not been this low since the mid-1990s. "The major drop in consumer confidence and a steady stream of economic bad news from the financial markets is taking its toll on the national housing market," he said.

The association pointed out a decline in housing is bad news for the overall economy, saying spin off spending from MLS transactions is about $15.3 billion per year when moving and renovation costs and the purchase of new furniture and appliances is included.