The Average Down Payment
In March this year, Realtor Magazine published an article about the average down payment home buyers put down on the home they purchased in 2014. I was intrigued because this always varies greatly between clients.
First, let me bring attention to the first time home buyer. This core buying group make up 38% of all home buyers. And they are actually the most active in the market given that over 75% of this group is under 33 years of age. They tend to be tech savvy and know how to use the latest tools. They are also the group with the smallest down payment (in their bank account or coming from a previous home sale). Yet they jump into home buying with the greatest intentions and may require a little work on their credit. Once that’s in place and they get approved, they are ready to buy.
The average buyer (factoring in the first time home buyer with the remaining 62%) who bought a home last year put 14% down on their home or just over $32,000. Yet the average down payment vary across types of markets.
And according to RealtyTrac, buyers in low-priced markets put down just 12 percent or $8,000. In higher priced market, the down payment percent nearly doubles (24 percent) . In those markets, the average down payment was $138,000.
In the Philadelphia market for example, the average down payment is just below the national average at 13 percent.
Regardless the percentage or final amount, each home buyer must research their loan options. If you are buying through FHA for example, you can purchase with just a 3.5% down payment. So work with your lender while doing your financing homework so you’re best prepared when your ready to start shopping for your next home.
Always ask your Home Marketsite agent about special loan programs and options. What the average down payment is for one varies with others. HMSRE.com and our agents can offer local resources and mortgage professionals to help aid your search for your home loan that best suite your financing needs.