US Existing-Home Buyers Make Smaller Down Payments in Q1

On Tuesday, Redfin reported that the typical US homebuyer put down $64,000 in March, down 1.5% from a year earlier. As a share of the purchase price, the typical down payment was 15.0%, compared with 16.1% a year earlier.

The findings are based on Redfin’s analysis of county records across 40 of the most populous US metropolitan areas. March is the most recent month for which data is available. Loan-type data and down-payment figures are limited to home purchases financed with a mortgage.

Redfin attributed the decline to cooling home-price growth, increased use of lower-down-payment loan products, and reduced competition in the housing market. With home-price appreciation slowing and bidding wars becoming less common, buyers have faced less pressure to make larger down payments and have been more inclined to preserve cash amid elevated monthly housing costs and broader economic uncertainty.

Despite the decline from recent peaks, down payments remain well above pre-pandemic levels. In dollar terms, the typical down payment has nearly doubled since 2019, largely reflecting higher home prices. Before 2020, the typical down payment was approximately 10% for many years before rising during the pandemic-era housing boom.