10 Cities Where You Don’t Need a Large Down Payment To Buy a Home Right Now—and 10 Where You Really Do
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Home shoppers, especially first-time buyers and those with tight budgets, have been through the wringer lately. They’ve struggled with skyrocketing prices and historically low inventory. Inflation and rising rents have cut deeply into their savings accounts, and, lately, mortgage rates have hit 20-year highs.
Now, add one more searing pain point to the list: Bigger-than-ever down payments are expected in many areas before sellers will even consider an offer. Even in lower-priced markets, down payments have generally gone up in the post-COVID-19 housing era.
It’s exacerbating one of the traditionally most challenging parts of homebuying: saving up for the cash down payment. And it’s enough to dissuade some cash-strapped buyers from buying altogether.
While putting down 20% of the purchase price is the gold standard, in many highly competitive real estate markets, buyers are now expected to contribute significantly more. Yet—in other parts of the country, buyers can get away with kicking in just a fraction of that.
“Sellers look at the smaller down payment as coming from a riskier buyer, with less certainty that the mortgage will be approved or close on time,” says Rob Chrane, CEO of DownPayment Resource. The company helps homebuyers find information about down payment assistance. “It got really extreme before the market started cooling down.”
As home prices hit new heights over the past few years, down payments in the tightest markets went up and up—a combination of sellers’ demands and buyers’ tactics to beat out the competition. For single-family home sales, the average down payment jumped to a high of more than 14% of the purchase price this year. That’s up from just above 11% in 2019.
To figure out where buyers are putting the most and least down on their home purchases, the Realtor.com® data team pored through September home sales in the 300 largest metropolitan areas using mortgage data from Optimal Blue. We limited our rankings to just one metro per state to ensure geographic diversity. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
So where are buyers plunking down the most—and least—amount of cash?
1. The Villages, FL
Average down payment: 30.2%
Median home purchase price: $375,000*
2. Coeur d’Alene, ID
Average down payment: 27.9%
Median home purchase price: $530,000
3. Santa Barbara, CA
Average down payment: 26.4%
Median home purchase price: $800,000
4. Barnstable, MA
Average down payment: 26.0%
Median home purchase price: $624,000
5. Salisbury, MD
Average down payment: 24.0%
Median home purchase price: $409,990
6. Maui, HI
Average down payment: 24.0%
Median home purchase price: $900,000
7. Boulder, CO
Average down payment: 23.9%
Median home purchase price: $683,150
8. Bend, OR
Average down payment: 23.9%
Median home purchase price: $545,000
9. Santa Fe, NM
Average down payment: 23.8%
Median home purchase price: $510,000
10. Hilton Head, SC
Average down payment: 23.7%
Median home purchase price: $425,000
