What is the Average Down Payment in the U.S.?— You Might Be Surprised!

When it comes to buying a home, one of the first questions many buyers have is: How much should I be putting down for a down payment? Whether you're a first-time buyer or looking to upgrade, understanding the typical down payment expectations can help you prepare better and feel more confident in your home buying journey.

The Average Down Payment Across the U.S.

Let’s start with the basics. Across the country, 60% of buyers are putting down more than 10% of the home’s purchase price. That's a sizable amount of money, especially considering how competitive the housing market can be. But here's the thing—this average includes all buyers, from first-timers to those purchasing their second or third home. And that’s where the numbers start to shift.

First-Time Homebuyers: What’s Realistic?

If you’re a first-time homebuyer, you’re likely wondering how much you should be saving for your down payment. The good news is that you may not need to put down as much as you think. On average, first-time homebuyers are putting down between 5% to 8% of the purchase price. This is a bit lower than the overall average and is often achievable with the help of first-time homebuyer programs, lower-interest loans, or down payment assistance programs that can make the homebuying process more accessible.

Repeat Buyers: Why the Larger Down Payments?

For repeat buyers, the scenario is a bit different. On average, repeat buyers are putting down 19% to 20% for their next home. Why such a significant difference? The main reason is that repeat buyers usually have existing equity from their current home that they can roll over into their new purchase. This accumulated equity allows them to put down a larger sum upfront, which can help them secure a better mortgage rate or avoid paying for private mortgage insurance (PMI).

What Does This Mean for You?

These numbers can serve as a useful benchmark as you plan for your home purchase, but remember, they represent averages. Your specific down payment will depend on several factors, including the type of loan you qualify for, the price of the home, and your own financial situation.

The good news is that no matter where you fall in this spectrum, the Justiz League Team is here to help guide you every step of the way. We know that buying a home is a big decision, and we're committed to providing you with the tools and knowledge to make this process easier and more empowering.

If you have questions or need personalized advice on how to navigate your down payment or financing options, reach out today. We’re just one message away!

Source:
National Association of Realtors (NAR) 2023 Survey of Home Buyers and Sellers.