Redfin: Typical Buyer Putting Up 16.3% Down Payment

(Image courtesy of Redfin)

Redfin, Seattle, reported that the typical U.S. homebuyer’s down payment in December was 16.3% of the purchase price, up from 15% a year earlier.

That translates to a down payment by the typical homebuyer of $63,188, which is actually up 7.5% from December 2023.

However, due to the continued increase in home prices, the figure represents only 16.3% of the purchase price on a typical home. The median home-sale price was up 6.3% year-over-year in December, to hit approximately $428,000.

The typical down payment has seen some significant swings in recent years–ranging from 10% pre-pandemic to 15% during the pandemic.

“While a larger down payment can lower monthly mortgage payments and help strengthen an offer in a bidding war, bigger isn’t always better,” said Sheharyar Bokhari, a Senior Economist at Redfin. “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.”

Redfin also noted that 30.6% of U.S. homes were bought with cash in December, down from 33.8% in 2023.

Fifteen percent of mortgaged homes utilized an FHA loan in December, down from 15.9% in December 2023. The share of mortgaged homes using a VA loan increased to 6.7% from 6.2% a year earlier.