As home prices have risen, so have borrowers’ down payments on homes.
The typical U.S. homebuyer now puts down roughly $63,000 — about $4,000 more than last year due to a jump in home prices, according to a report released Tuesday from real estate brokerage Redfin.
By comparison, the typical downpayment on a home during 2019 was roughly around $30,000, according to the company's data.
Further, that current $63,000 down payment equaled 16.3% of the average home purchase price as of December, up slightly from 15% at the same time in 2023. This latest report's data comes from Redfin’s analysis of county records across 40 of the most populous U.S. metropolitan areas.
“The amount 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 company noted in the report. “The median U.S. home-sale price rose 6.3% year over year in December to roughly $428,000.”
The percentage of total purchase price that buyers are putting down “is relatively high because mortgage rates are elevated near 7%,” Redfin stated, “and some buyers are putting down more up front to bring down their monthly interest payments.”
Helping illustrate home price appreciation over the past several years — and, perhaps the growing challenges potential homebuyers face — U.S. home prices grew 5.8% on a national basis in 2024, according to the Fannie Mae Home Price Index. That followed increases of 5.5% in 2023, 7.8% in 2022, 18.3% in 2021, and 10.2% in 2020.
So, for illustrative purposes and a longer lookback, taking an example of a $300,000 home in 2019 and a buyer making an optimal 20% down payment, that would make for a:
- $300,000 home price in 2019, with a down payment of $60,000;
- $330,600 home price (same home) in 2020, with a down payment of $66,120;
- $391,100 home price (same home) in 2021, with a down payment of $78,220;
- $421,600 home price (same home) in 2022, with a down payment of $84,320;
- $444,788 home price (same home) in 2023, with a down payment of $88,958; and
- $470,586 home price (same home) in 2024, with a down payment of $94,117.
About 31% of buyers, or roughly one out of three, are purchasing homes using all cash, down from about 34% a year earlier, Redfin noted. “The share of buyers paying in cash peaked in 2023 because that’s when mortgage rates peaked, hitting a two-decade high of nearly 8%,” the report stated.
