{"id":817539,"date":"2025-02-25T08:34:47","date_gmt":"2025-02-25T13:34:47","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/redfin-reports-the-typical-buyers-down-payment-is-16-of-the-homes-price\/"},"modified":"2025-02-25T08:34:47","modified_gmt":"2025-02-25T13:34:47","slug":"redfin-reports-the-typical-buyers-down-payment-is-16-of-the-homes-price","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/redfin-reports-the-typical-buyers-down-payment-is-16-of-the-homes-price\/","title":{"rendered":"Redfin Reports the Typical Buyer\u2019s Down Payment is 16% of the Home\u2019s Price"},"content":{"rendered":"

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Redfin Reports the Typical Buyer\u2019s Down Payment is 16% of the Home\u2019s Price<\/b><\/p>\n

The typical U.S. homebuyer now puts down roughly $63,000, about $4,000 more than last year, because of a jump in home prices<\/i><\/p>\n

SEATTLE–(BUSINESS WIRE<\/a>)–
\n(NASDAQ: RDFN) \u2014 The typical U.S. homebuyer\u2019s down payment was equal to 16.3% of the purchase price in December, up from 15% a year earlier, according to a new report<\/a> from Redfin (redfin.com<\/a>), the technology-powered real estate brokerage. In dollar terms, the typical homebuyer\u2019s down payment was $63,188. That\u2019s up 7.5% from a year earlier, the biggest increase in five months.<\/p>\n

\nThe data in Redfin\u2019s report is from the company\u2019s analysis of county records across 40 of the most populous U.S. metropolitan areas. December 2024 is the most recent month for which data is available.<\/p>\n

\nThe amount<\/i> of money homebuyers are putting down is higher than a year ago mainly because home prices are up: A higher price means buyers typically make a bigger deposit. The median U.S. home-sale price rose 6.3%<\/a> year over year in December, to roughly $428,000.<\/p>\n

\nThe percentage<\/i> buyers are putting down is relatively high because mortgage rates are elevated near 7%, and some buyers are putting down more up front to bring down their monthly interest payments.<\/p>\n

\nDown payments are no longer seeing the wild swings they were during the pandemic. The median U.S. down payment rose from the 10% range before the pandemic to the 15% range in 2021, which was the height of the pandemic homebuying frenzy. Mortgage rates also drove that increase, but the dynamics were very different then: Record-low rates of under 3% were fueling intense bidding wars among homebuyers, which motivated many to put more money down to make their offers stand out in a competitive environment.<\/p>\n

\n\u201cWhile a larger down payment can lower monthly mortgage payments and help strengthen an offer in a bidding war, bigger isn\u2019t always better,\u201d said Sheharyar Bokhari, a senior economist at Redfin. \u201cHousing markets in much of the country have started tilting in buyers\u2019 favor<\/a>, allowing buyers to set the terms they want. That means house hunters don\u2019t necessarily need to break the bank for a huge down payment if it makes more financial sense to save some money for things like future home renovations or other investments.\u201d<\/p>\n

31% of Homebuyers Pay in Cash, Down From 34% a Year Ago<\/b><\/p>\n

\nRoughly three in 10 (30.6%) U.S. homes were bought with cash in December. That\u2019s down from 33.8% a year earlier, but up from September\u2019s three-year low of 28.6%.<\/p>\n

\nThe share of buyers paying with cash peaked in 2023 because that\u2019s when mortgage rates peaked, hitting a two-decade high of nearly 8%. Buyers who can afford to pay with cash are more inclined to do so when rates are high because they\u2019re avoiding high monthly interest payments, and saving money in the long run.<\/p>\n

\nMortgage rates have since come down slightly and evened out in the 6% to 7% range, bringing down the share of buyers who are paying in all cash. Additionally, investors\u2013who make up a big share of all-cash buyers\u2013are purchasing<\/a> fewer homes.<\/p>\n

\nOn an annual basis, 32.6%<\/a> of 2024\u2019s home sales were made with cash, the lowest share in three years.<\/p>\n

15% of Mortgaged Homebuyers Use FHA Loans, Little Changed From a Year Ago<\/b><\/p>\n

\nRoughly one of every seven (15%) mortgaged home sales used an FHA loan in December, down slightly from 15.9% a year earlier but up from mid-2022\u2019s decade-low of roughly 10% .<\/p>\n

\nThe share of mortgaged home sales using a VA loan rose to 6.7%, from 6.2% a year earlier.<\/p>\n

\nMore homebuyers are using FHA loans now than in late 2021 and early 2022, when the ultra-competitive environment favored buyers with higher down payments and more ability to prove their financial security. Now, buyers are more likely to get an offer using an FHA loan accepted. Additionally, higher home prices mean more buyers find it hard to afford large down payments, making FHA loans more popular.<\/p>\n

\nConventional loans are by far the most common type of mortgage. Nearly four in five (78.4%) borrowers used a conventional loan in December, little changed from 77.9% a year earlier.<\/p>\n

Metro-Level Highlights<\/b><\/p>\n

The data below is from December 2024, the most recent month for which data is available, and covers 40 of the most populous U.S. metros.<\/i><\/p>\n