Redfin Reports Typical Down Payment Hits Record $67,500

(Illustration courtesy of Redfin)

The typical down payment for U.S. homebuyers hit a record $67,500 in June, up nearly 15% from $58,788 a year earlier, according to a new report from Redfin, Seattle.

June represented the twelfth consecutive month the median down payment rose year over year.

The jump in the median down payment significantly outpaced the increase in home prices, which were up 4% in June year over year, Redfin noted. “The increase is being influenced by the current market, where higher-priced, turnkey homes in desirable neighborhoods are more likely to sell. It’s also partly due to buyers putting down a higher percentage of the purchase price as a down payment.”

Annie Foushee, a Redfin real estate agent in Denver, noted she still sees investor coming in with all-cash offers on houses that need to be renovated. “Traditional buyers are putting down large down payments to try and lower their mortgage payment,” she said. “These buyers will often utilize the help of family members to put down more than they could on their own.”

Redfin said the typical homebuyer’s down payment was 18.6% of the purchase price in June, the highest level in more than a decade and up from 15% a year earlier. Nearly three in five homebuyers put down more than 10% of the purchase price in June, up from 56% a year earlier.

All-cash purchases now make up nearly a third of home sales, Redfin said.

“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,” Redfin Senior Economist Sheharyar Bokhari said. “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.”