What areas have the highest and lowest down payment averages?

by MPA17 Mar 2015

Home buyers who purchased a single-family home or condo in 2014 put 14% down, translating into an average $32,141, according to the latest data from RealtyTrac. The real estate information firm's report analyzed nearly 1.5 million purchase loans were included in the analysis in 386 counties nationwide.

"This analysis shows that first time homebuyers have a better shot at buying a home in low-priced markets, not just because of the lower price point but because on average buyers are putting down just 12% in those markets compared to 24% in high-priced markets," said Daren Blomquist, vice president at RealtyTrac. "Meanwhile, the markets where millennials are moving the most have above-average down payment percentages, which will make it tough for millennial renters to convert into first-time homebuyers in those markets.

"There are a few exceptions, however, where the combination of an influx of millennials and relatively low average down payment percentages indicate markets that will see a quicker return of the first-time homebuyer," Blomquist added. "Markets such as Nashville, Durham, Philadelphia, Des Moines, Little Rock and Columbus, Ohio."

Down payments average 24% in highest-priced markets
In the 25 counties with the highest median home sales prices at the end of 2014, the average down payment percentage was 24% for homes purchased in 2014. The average down payment in dollars in these 25 counties was $138,547. On average, low down payment loans accounted for 7% of all home purchases in these counties in 2014. 

5 Highest Down Payment Averages among Highest-Priced Markets

           
State County MSA December 2014 Median Home Price Avg Down Payment Pct Avg Down Payment Dollars
New York New York New York-Northern New Jersey-Long Island, NY-NJ-PA $935,000 37.18% $347,614
California San Francisco San Francisco-Oakland-Fremont, CA $1,018,000 30.01% $305,467
California San Mateo San Francisco-Oakland-Fremont, CA $825,000 28.46% $234,779
New York Kings New York-Northern New Jersey-Long Island, NY-NJ-PA $580,000 28.20% $163,537
California Marin San Francisco-Oakland-Fremont, CA $864,500 27.81% $240,432
           

Down payments average 12% in lowest-priced markets
In the 25 counties with the lowest median home sales prices at the end of 2014, the average down payment percentage was 12% for homes purchased in 2014. The average down payment in dollars in these 25 counties was $8,239. On average, low down payment loans accounted for 25% of all home purchases in these counties in 2014.

5 Lowest Down Payment Averages among Lowest-Priced Markets

           
State County MSA December 2014 Median Home Price Avg
Down Payment Pct
Avg
Down Payment Dollars
Michigan Genesee Flint, MI $70,000 8.98% $6,283
Michigan Muskegon Muskegon-Norton Shores, MI $75,039 9.53% $7,155
Ohio Clark Springfield, OH $74,400 9.56% $7,110
Ohio Ashtabula Ashtabula, OH $72,500 9.68% $7,019
Georgia Bibb Macon, GA $45,000 9.92% $4,462
           

"After the great recession, the public is becoming more aware of the available lending opportunities in the market today. The pendulum has swung back to a strong lending environment. As the millennials continue to move into the market and the investors diminish we will see the number of low down payment loans increase," said Mike Pappas, CEO and president of the Keyes Company, covering the South Florida market, where Miami-Dade County was the second least expensive after Maricopa County, Arizona, among the nation's 10 largest counties. "Home affordability is still near an all-time high in our market -- which makes it still a great buying opportunity." 

Average down payment 17% where millennials are moving most
In the 25 counties with the biggest increase in the millennial population between 2007 and 2013, the average down payment percentage was 17% for homes purchased in 2014 (above the national average of 14%). The average down payment in dollars in these 25 counties was $66,174 - more than twice the national average of $31,723. The average down payment percentage in these 25 counties was 17% (above the national average of 14 percent), and on average low down payment loans accounted for 15% of all home purchases in 2014 (compared to 18% on average among all counties analyzed).

"Because there's so much competition for homes in Seattle right now, sellers can afford to be very selective when reviewing offers from buyers, and they're choosing those with the least amount of risk said OB Jacobi, president of Windermere Real Estate, covering the Seattle market, where King County saw a 34% increase in its millennial population between 2007 and 2013 and where the average down payment was 18%, or $71,125. "This means buyers with low down payments are being outbid by cash buyers and those with higher down payments. And it will likely stay this way until the supply in Seattle starts to catch up with the demand." 
 

5 Highest Average Down Payments among Millennial Magnet Markets

           
State County MSA Avg Down Payment Pct Avg Down Payment Dollars % Change Millennials 2007 to 2013
New York New York New York-Northern New Jersey-Long Island, NY-NJ-PA 37.18% $347,614 42.79%
California San Francisco San Francisco-Oakland-Fremont, CA 30.01% $305,467 68.04%
New Jersey Hudson New York-Northern New Jersey-Long Island, NY-NJ-PA 21.83% $75,312 44.30%
Massachusetts Suffolk Boston-Cambridge-Quincy, MA-NH 21.42% $90,811 28.54%
Virginia Arlington Washington-Arlington-Alexandria, DC-VA-MD-WV 21.28% $114,688 82.24%
           

5 Lowest Average Down Payments among Millennial Magnet Markets

           
State County MSA Avg Down Payment Pct Avg Down Payment Dollars % Change Millennials 2007 to   2013
North Carolina Cumberland Fayetteville, NC 9.31% $8,287 20.77%
Tennessee Montgomery Clarksville, TN-KY 10.57% $14,144 46.34%
Virginia PRINCE WILLIAM Washington-Arlington-Alexandria, DC-VA-MD-WV 11.15% $32,891 22.23%
Arkansas Pulaski Little Rock-North Little Rock-Conway, AR 12.18% $15,472 20.57%
Iowa Polk Des Moines-West Des Moines, IA 12.46% $16,194 23.45%
           

Top 10 markets for first-time homebuyers
RealtyTrac identified the top 10 markets for first time homebuyers based on the average down payment percentage being below the national average of 14% and an increase in the millennial population of 20% or more following the Great Recession.

"We are anticipating further growth of consumers taking advantage of low down payment options for purchasing homes across Ohio in 2015," said Michael Mahon, executive vice president at HER Realtors, covering the Ohio housing markets of CincinnatiDayton and Columbus, where Franklin County ranked among the top 10 markets for first time homebuyers with a 13% average down payment ($16,536) and a 22% increase in millennials between 2007 and 2013.

"As greater equity continues to stabilize property values, lenders' use of down payment assistance programs, FHA, Fannie Mae, Freddie Mac, and USDA rural housing loans will continue to grow in popularity with first time home buyers, as well as boomerang home buyers returning to an appreciating housing market."

           
State County MSA Avg Down Payment Pct Avg Down Payment Dollars % Change Millennials 2007 to 2013
Tennessee Montgomery Clarksville, TN-KY 10.57% $14,144 46.34%
Tennessee Davidson Nashville-Davidson--Murfreesboro--Franklin, TN 13.40% $21,104 37.12%
North Carolina Durham Durham, NC 13.07% $20,326 27.58%
Pennsylvania Philadelphia Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 13.40% $12,054 24.90%
Iowa Polk Des Moines-West Des Moines, IA 12.46% $16,194 23.45%
Virginia PRINCE WILLIAM Washington-Arlington-Alexandria, DC-VA-MD-WV 11.15% $32,891 22.23%
Ohio Franklin Columbus, OH 12.92% $16,536 21.86%
North Carolina Cumberland Fayetteville, NC 9.31% $8,287 20.77%
Arkansas Pulaski Little Rock-North Little Rock-Conway, AR 12.18% $15,472 20.57%
Georgia Columbia Augusta-Richmond County, GA-SC 12.14% $17,478 20.34%
           

"It's clear that low down payment loans are being used by first-time and other entry level buyers in lower priced markets; however, even in higher cost markets, there are a wealth of homeownership programs available that could lower buyers' down payment and closing costs," said Rob Chrane, president and CEO of Down Payment Resource.

"Programs in high cost markets may offer even greater down payment help, and income and home price limits are typically increased to fit the market. There's a general lack of awareness among first time homebuyers about down payment programs which may be keeping more of them on the sidelines longer than necessary."

 

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