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Not many first time home buyers do a standard mortgage now. Typically 3-5% is all that is needed.

That and the lowest home mortgages rates anyone alive has seen have contributed to the home price increase. It's not the total value of the house but the amount of the monthly payment that is the driver, and 3% (today) vs 13% (early 80s) mortgage rates provide a huge swing.

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If the number of people that can afford to put down 20% has shrank significantly over time, won't the pool that can put 3-5% inevitably shrink as well? Will we return to 0-down homes? Where are down payments terminally headed?

OK, but now you hold less equity in your home and you're paying PMI on top of that until you reach ~22% equity. There's no free lunch here.

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