The days of saving up 20% for a down payment are dwindling as many lenders, such as Bank of America, have come out with new financing options that ease the burden of saving up amid the market’s rapidly rising home prices.

Millennials eager to break into the housing market might rely on parents to help foot the bill, or resort to buying tiny homes, as that trend has started to become a new alternative to traditional homeownership.

There are several reasons, however, why Millennials may want to keep renting and hold off buying a home until they can afford a larger down payment, according to an article by Financial Investment Advisor Evan Powers for Seeking Alpha.

From the article:

Indeed, the wisdom of that 20% down payment advice has been questioned by some in recent years, despite the fact that most borrowers continue to heed it (according to LendingTree, the average down payment for a conventional 30-year mortgage currently sits at around 17.5%). And some of the arguments in favor of lower down payments do, in fact, have merit.

However, I'd argue that the scenarios in which a low down payment is a good idea are both overly specific and too few and far between. For the vast majority of borrowers – first-time homebuyers or not – it's still best to accumulate a large down payment before purchasing, particularly for young families (like the Couches) who already have debt on their balance sheets.

Here are three reasons why Powers said borrowers should avoid a 3% down payment:

1. They will immediately be underwater

2. Their effective mortgage rate will be higher

3. It’s contributing to real estate market volatility

Read the whole article here. 

On the other hand, As the spring home-buying season struggles to lift off, people point to tight credit as one reason to blame, with Danny Gardner, Freddie Mac vice president of affordable lending and access to credit, weighing in on the discussion at the Mortgage Bankers Association Secondary conference in New York City.