Down payments are dropping from historic highs — see how much you can save today

Homebuyers mightiness beryllium relieved to perceive that down payments are yet dropping from caller historical highs.

A new report by Realtor.com® shows that nan median down costs homebuyers plunked down from July to September of 2024 was an mean of 14.5%—or $30,300.

That’s a $2,400 savings from past quarter’s historical highest of $32,700 (14.9%).

So why are down payments dropping? Fewer homebuyers are retired there, which gives those who do brave today’s marketplace much leverage, according to Realtor.com senior economical investigation analyst Hannah Jones.

“The yearly diminution successful down payments is nan consequence of little purchaser title successful nan 3rd quarter,” Jones says. “Easing request and expanding inventory gave buyers much elasticity past quarter, which led to somewhat little down payments.”

To nutrient these findings, nan Realtor.com economical investigation squad examined down costs trends passim nan U.S., individual states, and nan apical 150 metropolitan areas up to nan 3rd 4th of 2024, utilizing information from Optimal Blue. The squad past wished nan down costs arsenic a percent of nan waste value by averaging nan data.

A caller study recovered that nan median location down costs has dropped from historical highs past quarter. Christopher Sadowski

States pinch nan biggest down costs declines

Down costs dollar amounts fell successful 21 states successful nan 3rd 4th of 2024.

The states that saw nan biggest down costs declines see COVID-19 pandemic-era basking spots specified as Texas and Florida.

These states “have seen important softening complete nan past twelvemonth arsenic waning request and climbing inventory effect location prices and trim competition,” says Jones.

The 5 states pinch nan biggest down costs declines were Florida, down 24% twelvemonth complete year, to $27,000; Texas, down 23.2%, to $14,400; Wyoming, down 22.3%, to $25,200; the District of Columbia, down 17.7%, to $81,300; and South Dakota, down 16.4%, to $31,400.

Metros pinch nan smallest down payments

“Overall, nan metros pinch nan smallest down payments thin to beryllium comparatively affordable and flush pinch inventory,” says Jones.

Housing banal was betwixt 19% and 37% much abundant successful these metros compared pinch 1 twelvemonth ago, and homes were spending much clip connected nan market.

The median database value successful each of these markets was much than $30,000 beneath nan nationalist median, enabling little down payments, according to Jones.

The apical 2 markets pinch nan smallest down payments are San Antonio, TX, and Virginia Beach,VA, which are some subject markets. In markets pinch a precocious subject population, buyers are much apt to use a VA loan, which tin let for arsenic small arsenic a $0 down payment.

In San Antonio, nan mean down costs successful nan 3rd 4th of 2024 was $5,200, aliases 7.4%. That’s down $900 twelvemonth complete year.

The mean down costs in Virginia Beach was 9.1%, aliases $7,300—which is really $600 higher than nan aforesaid clip past year.

Rounding retired nan apical 5 metros pinch lowest down payments were Memphis, TN, pinch an mean down costs of $8,300 (down 9.8%, aliases $2,500, twelvemonth complete year); New Orleans, pinch an mean down costs of $13,500 (up 11.2%, aliases $3,000, twelvemonth complete year); and Houston, pinch an mean down costs of $17,500 (down 11.8%, aliases $2,000, twelvemonth complete year).

Florida and Texas were nan states pinch nan highest down costs declines. Christopher Sadowski

States pinch nan biggest down costs increases

The apical 5 states pinch nan largest yearly down costs increases were each successful nan Northeast and Midwest.

“Northeast and Midwest markets person been heavy represented successful recent Hottest Housing Market reports, confirming that purchaser request is driving title and prices higher, resulting successful higher down payments,” says Jones.

In dollar amounts, Rhode Island saw nan largest spike successful down payment, pinch nan emblematic down costs going from $45,300 to $60,400 twelvemonth complete year—an summation of $15,000 (33.8%).

In Delaware, nan emblematic down costs went from $40,400 to $53,600—which was an summation of $13,200 (32.8%).

Wisconsin‘s emblematic down costs went from $28,300 to $35,500—which was an summation of $7,200 (25.2%).

In Nevada, nan emblematic down costs went from $33,300 to $40,900—which was an summation of $7,600 (22.8%).

Finally, Ohio‘s emblematic down costs went from $15,100 to $18,500—an summation of $3,400 (22.8%).

Metros pinch nan largest down payments

Four retired of 5 metros pinch nan highest down costs amounts are successful California, which includes immoderate of nan astir costly lodging markets successful nan country.

“These pricey metros thin to spot ample down payments arsenic some liking rates and liking payments summation pinch larger indebtedness amounts, incentivizing buyers to put down arsenic overmuch arsenic imaginable to debar these costs,” says Jones.

San Jose, CA, continues to beryllium nan metro pinch nan largest median down payment, pinch nan mean homebuyer putting down astir $312,000, aliases 27.7% of nan acquisition price. That’s astir a $76,000 summation from nan aforesaid 4th past year—when buyers put 24.8% down.

In August, nan median value of a single-family location successful San Jose exceeded $2 million, marking nan first lawsuit that a metropolis has reached specified a milestone since nan National Association of Realtors® began search this information successful 1979.

The different California metros successful nan apical 5 were San Francisco, astatine No. 2; Sacramento, astatine No. 3; and Los Angeles, astatine No. 5.

In San Francisco, buyers put down an mean of $231,400 connected a house, aliases 25%. That’s $28,900 much than nan aforesaid clip past year.

Homebuyers put down an mean of $109,000, aliases 21.0%, successful Sacramento. That’s a quality of $5,200 twelvemonth complete year.

In Los Angeles, buyers put down an mean of 20.9%, aliases $159,700. That’s $7,400 higher than nan 3rd 4th of past year.

Boston, astatine No. 4, stands retired connected this database of high-priced California markets. Buyers successful Beantown put 20.9%, aliases $109,000, down connected average—which was $2,000 much than past year.

“These high-priced locales thin to person wealthier, high-earning residents who person nan costs to put much down connected a home,” says Jones.

The early of down payments

Although down payments person started to inclination lower, they stay historically high.

“With galore buyers opting retired of nan location acquisition marketplace altogether, those near are apt amended positioned to make a larger down payment, and incentivized to do truthful by precocious owe rates,” says Jones.

As owe rates ease, much buyers will apt participate nan market, and nan inducement to minimize their location indebtedness will soften.

“However, if for-sale inventory fails to support up pinch accrued purchaser demand, down payments could climb erstwhile again,” says Jones.