Year-over-year rise in average down payment size was highest for middle-tier homes
Quick Takes:
- In May 2022, U.S. homebuyers offered record-high down payments for homes in all price tiers.
- The year-over-year rise in average down payment sizes was highest for middle-tier homes (19%), followed by low-tier homes (15%) and then high-tier homes (13%).
- Home prices play a significant part in the size of down payments, and with increases in home prices over the last few years, average down payments have followed suit.
The average sums that buyers are parting with for a down payment are at an all-time high for all homes purchased in the United States. After falling during the housing crisis of the Great Recession (2008-2009), the average down payment amount has steadily increased. However, since the onset of the pandemic in early 2020, the average down payment sum surged, reaching a record high in May 2022.
Home prices play a significant part in the size of down payments, and with increases in home prices over the last few years, average down payments have followed suit.
Figure 1 shows that the average down payment amount has increased for all sales price tiers, according to CoreLogic public records data. In June, the average down payment amount for low-tier homes (those priced at less than 75% of the median sales price) was about $30,186, up from $26,314 for the same month in 2021.
Similarly, Figure 2 shows the average down payment percentage by sales price tiers. This June, the average down payment percentage for low-tier homes was about 12% of the sales price.
The average down payment amount for middle-tier homes (those priced between 75% and 125% of the median sales price) was $63,071 in June, up from $52,862 for the same month in the previous year. The average down payment percentage for middle-tier homes was about 14% of the home sales price in June.
Similarly, the average down payment for high-tier homes (those priced at more than 125% of the median sales price) was $152,022 in June, up from $134,535 in the same period of 2021. The average down payment percentage for high-tier homes was about 21% in June. Mortgages for high-tier homes are mostly high-balance loans or jumbo loans, which generally require a larger down payment.
Year-over-year rises in average down payment amounts were highest for middle-tier homes (19%), followed by low-tier homes (15%). In contrast, the year-over-year increase was just 13% for high-tier homes.
Figure 1: Average Down Payment Amount by Sale Price Tiers[1]
Average Down Payment Amount by Price Tier
Figure 2: Average Down Payment Percentage By Sale Price Tiers
Average Down Payment Percentage by Price Tier
[1] Sales price tiers are based on the median price of all home sale transactions at a metro level during a given month.
