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In 2024, U.S. homebuyers made the largest down payments on record — both in size and as a share of the home price — but that milestone reveals an increasingly uneven playing field in the housing market.
According to a new Realtor.com report, the national average down payment hit 14.4 percent and $30,250 in the fourth quarter. The biggest gains came from the Northeast and Midwest, where limited inventory and rising competition increased home prices and, subsequently, the amount that buyers had to bring to the table.
Meanwhile, it’s a different story in the South and West.
Realtor.com
Numerous states, including Delaware, Rhode Island, Maine and Nevada, saw the sharpest year-over-year increases with down payments rising between 28 percent and nearly 39 percent.
This trend isn’t exactly new — down payments started climbing during the pandemic, as intense buyer competition pushed home prices up, but today’s elevated mortgage rates and home prices have made it even harder for lower-income buyers to keep up.
“Today’s market is more navigable for high-earning, financially prepared buyers who can afford higher-priced homes and bigger down payments, pushing overall down payments higher,” Realtor.com author Hannah Jones wrote in the report.
States in the South and West — Texas, Florida, South Dakota and Wyoming — have seen notable declines in down payments, falling between 8.1 percent and 16.5 percent. Many of the same states that experienced a boom during the pandemic, including Montana, Tennessee and North Carolina, are also feeling the effects of cooling demand and growing inventory.
Major metros in Texas and Florida led the slide. Cape Coral-Fort Myers and Jacksonville, Florida, and Austin and San Antonio, Texas, buyers put down between 9.1 percent and 31.2 percent less than they did the year before. Falling or stagnant home prices in these areas have helped reduce the size of down payments, easing some pressure for buyers.
Despite regional softening, experts expect overall down payments to stay elevated, continuing to pose a challenge for first-time and lower-income homebuyers.
