One major side effect of higher home prices is higher down payments.
Down Payments Higher Now than Pre-Pandemic
LendingTree took a look at how expensive down payments are across the country’s 50 largest metro areas. This personal finance platform found that the average down payment came in at $46,283 among these largest metros.
LendingTree analysts also looked at how expensive down payments are relative to median annual household incomes in each of these 50 metro areas.
READ: 2022 Top Agent Success Secrets [Revealed]: New FREE Real Estate Coaching Web Event, Revealing 17 Surprising Secrets Of The Top 100 $ Millionaire Agents. Get Your FREE Spot For The 2022 Real Estate Coaching Webinar Now. After You Have Attended This Event You Will Have A Huge Feeling Of Relief Knowing You Will FINALLY Laugh At Your Money Worries – You Will Have Your Own Personalized 2022 Step-By-Step Business Plan. Learn Now How To Generate 100’s of Motivated Leads for FREE, Without Coming Off As A Pushy Salesperson and Losing Your Soul. You Will Soon Know How To Become One of the 1000s of Agents Making HUGE Money Who Never Thought They Could. YES, I Want To Attend The FREE Webinar! <——Click To Register
P.S. Free Webinar, Limited Space. Less Than 300 Spots Still Available.
Key Findings of LendingTree’s Down Payment Study
- The average down payment on a house now costs at least $28,000 in each of the country’s 50 largest metro areas.
- San Jose and San Francisco have the highest average down payments
- Down payments in Oklahoma City, New Orleans and St. Louis have the lowest down payments.
- The average down payment on a home across all 50 of the nation’s largest metros represents approximately 62% of any given metro’s median yearly household income.
Metros with the Highest Average Down Payment
San Jose CA
- Average Down Payment: $115,138
- Median Annual Household Income: $130,865
- Down Payment as Percentage of Median Household Income: 88%
San Francisco CA
- Average Down Payment: $103,016
- Median Annual Household Income: $114,696
- Down Payment as Percentage of Median Household Income: 90%
San Diego CA
- Average Down Payment: $85,714
- Median Annual Household Income: $83,985
- Down Payment as Percentage of Median Household Income: 102%
Other metros with the highest down payments include:
- Los Angeles CA
- Seattle WA
- New York NY
- Boston MA
- Washington DC
- Denver CO
- Sacramento CA
Metros with Lowest Average Down Payment
Oklahoma City OK
- Average Down Payment: $28,267
- Median Annual Household Income: $60,605
- Down Payment as Percentage of Median Household Income: 47%
New Orleans LA
- Average Down Payment: $29,371
- Median Annual Household Income: $55,710
- Down Payment as Percentage of Median Household Income: 53%
St. Louis MO
- Average Down Payment: $29,958
- Median Annual Household Income: $66,417
- Down Payment as Percentage of Median Household Income: 45%
Other metros with the lowest down payments include:
- Louisville KY
- Providence RI
- Detroit MI
- Milwaukee WI
- Pittsburgh PA
- Kansas City MO
- Memphis TN
Impacts for Homebuyers with Higher Down Payments
First of all, it’s a huge challenge for buyers, even for buyers working in high-paying industry sectors, to come up with enough cash for a five- or six-figure down payment.
Secondly, for buyers who already own a home, they may need to stay in that home longer than they’d like or had intended to stay while they gather up that cash for a higher down payment. Or, if they made a profit on the house they just sold in order to buy the new house, they may have to spend more of the profit money they made on that sale than they would have spent in the past.
Third, some buyers may simply have to move in with families/friends or may have to continue renting until they can save up the cash for a down payment.
Other buyers may be able to take advantage of loans that require smaller down payments, such as Federal Housing Administration (FHA) loans. However, the kicker on loans that require lower down payments usually translates into higher loan amounts, higher interest rates and, therefore, higher monthly mortgage payments that could be more difficult to afford.
Thanks to LendingTree.
