Buyers Make 20% Higher Down Payments
March 19, 2018
The median down payment on a single-family home or condo in the fourth quarter of 2017 was $18,000, up 20 percent from $14,950 a year prior, according to a new report by ATTOM Data Solutions. The 2017 figure represents 7.1 percent of the median sales price of the home purchased, up from 6.2 percent in the fourth quarter of 2016.
Many Americans, particularly young people, think they need a lot more money down than they really do.
Among 143 metro areas analyzed, the top five cities where residents paid the highest down payments in the fourth quarter of 2017 were in California:
- San Jose, Calif.: $268,000
- San Francisco: $174,500
- Santa Rosa, Calif.: $123,450
- Los Angeles: $119,800
- Ventura, Calif.: $107,000
Buyers in Seattle were also bringing higher down payments to settlement. “The median down payment in the greater Seattle area was 14.1 percent—twice the national average—and is continuing to rise,” says Matthew Gardner, chief economist for Windermere Real Estate in the Seattle area. “This is good news for homeowners in our market, as it provides them with a layer of protection should home prices see a downturn in the future.”
Meanwhile, the share of loans backed by the Federal Housing Administration dropped to a three-year low, according to ATTOM Data Solutions. FHA loans accounted for 12 percent of all residential property loans originated in the fourth quarter of 2017, down from 12.3 percent a year ago and the lowest share since the fourth quarter of 2014.
Residential loans backed by the U.S. Department of Veterans Affairs comprised 6.6 percent of all residential property loans originated in the fourth quarter of 2017, down from 7.6 percent a year ago.
Source: ATTOM Data Solutions
Updated: July 19, 2018