US Homebuyer’s Typical Down Payment Declined 10% Year-Over-Year in January

Redfin reported on Wednesday (3-22-23) that the typical US homebuyer’s down payment declined 10% year-over-year in January to $42,375, its lowest level in nearly two years. Redfin notes that median down payment was down 35% from the peak reached in June 2022 but was still up more than 30% from pre-pandemic levels.

The median down payment in January was equal to 10% of the purchase price, down from 13.6% a year earlier and the pre-pandemic peak of 17.5% in May 2022. The last time down-payment percentages were this low was in early 2021, before the pandemic homebuying boom drove buyers to put more money down to make their offers more attractive.

Adding additional background and his expert analysis, Redfin’s Senior Economist, Dr. Sheharyar Bokhari, said:

“One sliver lining of high mortgage rates and economic turmoil is that they’ve slowed competition. That means buyers are often able to purchase a home without facing a bidding war and don’t need to fork over a huge portion of their savings for a down payment to grab sellers’ attention. Today’s buyers are also able to save money in other ways: Nearly half of the sellers are offering concessions, like helping pay for a mortgage-rate buydown or covering closing costs to attract buyers.”