The typical U.S. homebuyer made a $42,375 down payment in January, the smallest typical down payment recorded in nearly two years, according to HousingWire. Though January’s typical down payment was still up 30% compared with pre-pandemic levels, it was 35% below the high recorded in June 2022.
Of the 40 metros tracked by Redfin, San Francisco was home to the highest down payment percentage of 25%, followed by Anaheim and San Jose, in California. Meanwhile, Sacramento, Calif., posted the largest year-over-year decline in down payment percentage, posting 12.4% in January 2023 compared with 20% one year prior.
“One silver lining of high mortgage rates and economic turmoil is that they’ve slowed competition,” Sheharyar Bokhari, Redfin’s senior economist, said in a statement. “That means buyers are often able to purchase a home without facing a bidding war and don’t need to fork over a huge portion of their savings for a down payment to grab sellers’ attention. Today’s buyers are also able to save money in other ways: Nearly half of sellers are offering concessions, like helping pay for a mortgage-rate buydown or covering closing costs, to attract buyers.”
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