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Average Down Payments on Homes Across 50 Largest U.S. Metros Top $46,000

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While there are signs that the housing market is beginning to cool somewhat, home prices are still significantly higher in many parts of the U.S. than they were before the coronavirus pandemic. One of the side effects of these higher home prices is higher down payments.

With that in mind, LendingTree looked at how expensive down payments are across the nation’s 50 largest metropolitan areas, finding the average to be $46,283. Analysts also looked at how expensive down payments are relative to median annual household income in each of the 50 metros.

Key findings

  • An average down payment on a home costs at least $28,000 in each of the nation’s 50 largest metros. The average down payment across the 50 metros is $46,283, with the highest average down payment in San Jose, Calif., and the lowest in Oklahoma City.
  • In the two metros where down payments are highest — San Jose and San Francisco — the average down payment is more than $100,000. The average down payment in San Jose is $115,138, or 88% of the median annual household income in the area. In San Francisco, the median down payment on a home is $103,016, or 90% of the area’s median annual household income.
  • Oklahoma City, New Orleans and St. Louis are the metros with the lowest down payments. Down payments in these metros average $28,267, $29,371 and $29,958, respectively. Though these figures may seem affordable compared to places like San Jose, coming up with nearly $30,000 in cash for a down payment will likely be difficult for many homebuyers.
  • Across the nation’s 50 largest metros, the average down payment on a home is about 62% of a given area’s median yearly household income.
  • While down payments typically are less than a metro’s median annual household income, they’re higher in Los Angeles and San Diego. In Los Angeles and San Diego, the down payments are worth 108% and 102% of each area’s median household income, respectively.
  • Down payments are the most affordable relative to income in Providence, R.I., St. Louis and Baltimore. Across the three metros, homebuyers put an average of 45% of the area’s median household income toward a down payment.

Metros with the highest average down payment

No. 1: San Jose, Calif.

  • Average down payment: $115,138
  • Median annual household income: $130,865
  • Down payment as a percentage of median household income: 88%

No. 2: San Francisco

  • Average down payment: $103,016
  • Median annual household income: $114,696
  • Down payment as a percentage of median household income: 90%

No. 3: San Diego

  • Average down payment: $85,714
  • Median annual household income: $83,985
  • Down payment as a percentage of median household income: 102%

 

Metros with the lowest average down payment

No. 1: Oklahoma City

  • Average down payment: $28,267
  • Median annual household income: $60,605
  • Down payment as a percentage of median household income: 47%

No. 2: New Orleans

  • Average down payment: $29,371
  • Median annual household income: $55,710
  • Down payment as a percentage of median household income: 53%

No. 3: St. Louis

  • Average down payment: $29,958
  • Median annual household income: $66,417
  • Down payment as a percentage of median household income: 45%

 


What higher down payments mean for homebuyers

Rising down payments present a challenge for buyers who need to come up with five or six figures in cash — even for those who work in high-paying industries or can afford to pay off a mortgage each month.

Depending on individual situations, higher down payments can have various impacts on would-be homebuyers. For example, those who already own a home may need to plan on staying in that home longer than they’d like. Or, if they made a profit by selling their current home, they might have to allocate more of that money toward the down payment on a new home than they would have in the past.

Others may need to resort to renting or moving in with family until home prices further cool. While these options are useful for those who can’t afford to buy a home, they aren’t necessarily ideal. This is especially true for people who find living with family stressful, or the 88% of Americans who recently told LendingTree they’d rather own than rent.

In some instances, borrowers might be able to get away with making a smaller down payment, either by taking advantage of loans that don’t require large down payments — like Federal Housing Administration (FHA) loans — or by leveraging a stellar credit score to reduce the amount of cash required upfront.

Keep in mind, however, that your loan amount and interest rate are likely to be higher if you put less money down on your home, which could make monthly payments more difficult to afford.

3 tips for coming up with a down payment

As this LendingTree report makes clear, a down payment on a home can be costly — even in areas not known for high home prices. And while this presents a challenge to many homebuyers, the good news is that there are ways to make coming up with enough money for a down payment a little bit easier.

  • Save, save, save. The more you save for a down payment, the better. Of course, saving can be difficult, especially with high inflation. But doing things like eating out less often or taking fewer vacations can help you build up a significant amount of money over time.
  • Consider different loan options. While a 20% down payment may be seen as standard, various loan options require less cash upfront. For example, FHA loans require a down payment of just 3.5%.
  • Look into down payment assistance programs. In some instances, you may qualify for help from a down payment assistance program. These programs can provide grant money or other discounts that can make a down payment more affordable.

Methodology

LendingTree researchers analyzed data for the nation’s 50 largest metropolitan statistical areas (MSAs) to determine the average down payment in each metro.

Down payment data is derived from mortgages offered to more than 760,000 LendingTree users from Jan. 1, 2021, to Aug. 25, 2021.

Median annual household income data comes from the 2019 U.S. Census Bureau American Community Survey, one-year estimates — the latest data available.

 

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