Down payments are shrinking, according to a new analysis from the National Association of Realtors’ consumer website. The typical down payment during the second quarter of this year was $27,100 or 13.7 percent of the home’s purchase price. Last year at the same time, the median down payment was $29,900 or 14.3 percent. Hannah Jones, senior economist at the site, says home buyers have gained some ground. “Buyers have gained some negotiating room, while higher mortgage rates remain the biggest factor shaping monthly affordability,” Jones said. “In expensive markets, buyers with more equity are using larger down payments to reduce monthly costs; in softer markets, smaller down payments are adding to the cost of higher rates. For many households, the monthly payment, rather than the just the cash needed upfront, will determine how much home they can afford.” (source)
