U.S. homebuyers paid 14.8% more for the typical down payment in June 2024 than homebuyers in June 2023 as the typical down payment hit a record high of $67,500. This marked the 12th consecutive month that the median down payment rose year over year, according to Redfin.
The nearly 15% jump significantly outpaced the increase in home prices, which were up 4% in June year over year. Redfin analysts said the current market factors in to this increase in down payments, as higher-priced, turnkey homes in desirable neighborhoods are more likely to sell.
Buyers are also putting down a higher percentage of the purchase price as a down payment. The typical homebuyer’s down payment was 18.6% of the purchase price in June, the highest level in over a decade and up from 15% a year earlier.
“Investors are still coming in with all-cash offers on homes that need to be renovated,” said Annie Foushee, a Redfin agent in Denver. “Traditional buyers are putting down large down payments to try and lower their mortgage payment. These buyers will often utilize the help of family members to put down more than they could on their own.”
Metros with biggest increases in down payments included Newark, NJ, where the median down payment jumped 51.5% from a year ago to $125,000 – the largest percentage increase among the metros Redfin analyzed.
Next up came Las Vegas (up 40.7% to $45,500), Washington, D.C. (up 38.7% to $76,000), New Brunswick, NJ (up 32.7% to $124,213) and Nashville, Tenn. (up 32% to $61,395).
Down payments fell in just three metros: Jacksonville, FL (down 28.4% to $28,338), Oakland, Calif. (down 11% to $195,000) and Tampa, Fla. (down 6.4% to $39,773).
In San Francisco, the median down payment was equal to 25.8% of the purchase price – the highest among the metros Redfin analyzed. Second was San Jose (25.7%) and third, Anaheim (25%).
Down payment percentages were lowest in Virginia Beach, Va. (3%) – an area with a higher concentration of veterans using VA loans with little to no down payment – followed by Detroit (6.8%), and Jacksonville, Fla. (8.6%).
Down payments are increasing for several reasons: higher home prices, elevated mortgage rates, and an increase in home equity. Meanwhile, all-cash purchases are also up.
The share of all-cash purchases rose to 30.7% of all home sales in June, up slightly from 30.4% a year ago.
“The percentage of all-cash sales generally follows the same trend as the rise and fall of mortgage rates. When rates are down, the percentage of all-cash sales is down too, and the opposite is true when rates go up,” said Redfin Senior Economist Sheharyar Bokhari. “That means we may start to see all-cash purchases level off a little now that mortgage rates have started to come down from recent highs.”
Among the 40 most populous U.S. metros Redfin analyzed, those with the most all-cash home purchases also had strong activity by property investors.
West Palm Beach, Fla. led the pack with the highest share of all-cash purchases, at 50.4%. It was followed by Riverside, Calif. (39.9%) and Detroit (38.9%).
