All articles tagged with #down payments
Home prices are stabilizing with slight declines and mortgage rates have decreased, improving affordability for buyers, but high down payment requirements remain a barrier. Increased housing supply and rising pending sales indicate a positive market trend, though the typical time to save for a down payment is still longer than pre-pandemic levels.
Homebuyers in some U.S. markets, particularly in California, are still making down payments of over $100,000 on homes, despite a slight decrease in down payment percentages relative to home prices. The top 5 cities with the largest down payments are all in California, including San Jose-Sunnyvale-Santa Clara and San Francisco-Oakland-Berkeley. The dominance of California in the rankings can be attributed to the state's desirable yet expensive properties and longstanding housing shortage. In contrast, areas near military bases tend to have lower down payments, thanks to affordable, 0% down mortgages offered by the U.S. Department of Veterans Affairs.
Realtor.com has identified the top 10 US cities where homebuyers make the smallest down payments, making homeownership more affordable. The cities are primarily located in the South and Midwest, known for their affordability, and four of them have military bases, increasing the chances of buyers being military personnel who can utilize Veteran loans with low or no down payments. The average down payment in these cities ranges from 5.3% to 10% of the purchase price, providing an opportunity for buyers who may not have enough cash for a larger down payment.
The typical down payment for US homebuyers fell 10% YoY to $42,375, the lowest level in two years, due to low competition in the housing market. Buyers are able to purchase homes without facing bidding wars and don't need to fork over a huge portion of their savings for a down payment. High housing costs, persisting inflation, and concerns over the uncertain economy are also hitting budgets hard. Lower home prices have fallen more than 10% from their peak in May 2022 and are down 1.5% from a year ago.