Typical Down Payment on US Home Increases 7.5% Year-Over-Year in December

On Tuesday, Redfin reported that the typical US homebuyer’s down payment in December was equal to 16.3% of the purchase price, up from 15% a year earlier. In dollar terms, the typical homebuyer’s down payment was $63,188—up 7.5% from a year earlier and the biggest increase in five months.

The data in Redfin’s report is from the company’s analysis of county records across 40 of the most populous US metropolitan areas. December is the most recent month for which data is available.

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 median home-sale price rose 6.3% year-over-year to roughly $428,000 in December.

Down payments are no longer seeing the wild swings they were during the pandemic, Redfin said. The median down payment rose from the 10% range before the pandemic to the 15% range in 2021, which was the height of the pandemic homebuying frenzy. Mortgage rates also drove that increase, but the dynamics were very different then: Record-low rates of under 3% were fueling intense bidding wars among homebuyers, which motivated many to put more money down to make their offers stand out in a competitive environment.

Commenting on the report, Redfin Senior Economist Sheharyar Bokhari said:

“While a larger down payment can lower monthly mortgage payments and help strengthen an offer in a bidding war, bigger isn’t always better. Housing markets in much of the country have started tilting in buyers’ favor, allowing buyers to set the terms they want. That means house hunters don’t necessarily need to break the bank for a huge down payment if it makes more financial sense to save some money for things like future home renovations or other investments.”