Down payments on a home in the United States fell in the third quarter of this year, giving hopeful buyers much-needed relief.
The average down payment as a share of the purchase price dropped to 14.5% in the months of July through September. That equates to $30,300.
In comparison, the median down payment for homebuyers in the second quarter was 14.9% or $32,700. That means buyers saved $2,400 on average in the third quarter, per a recent report from Realtor.com.
In addition, down payments for investment properties also fell by 0.7% in Q3 2024 to 27.5% while those for second homes fell by 0.6 points to 27.7%.
The research team at Realtor.com examined down payment trends throughout the individual states in the US using data provided by Optimal Blue.
Why Down Payments Are Dropping
The decline in median down payments is caused by a fall in buyer competition in the third quarter. The reduced demand, and the increase in inventory, eased the pressure on the housing market and led to slightly lower down payments, Realtor.com senior economic research analyst Hannah Jones said.
It is unclear if the decline represents the start of a downward trend or if the shift was only caused by seasonal housing market conditions.
Where Down Payments Dropped the Most
Down payments (in dollar amounts) fell in 21 US states in the third quarter. The 10 states with the biggest down payment declines include:
Florida
Average Down Payment Q3 2024: $27,000
Decline (In Dollars): -$8,500
Texas
Average Down Payment Q3 2024: $14,400
Decline (In Dollars): -$4,400
Wyoming
Average Down Payment Q3 2024: $25,200
Decline (In Dollars): -$7,200
District of Columbia
Average Down Payment Q3 2024: $81,300
Decline (In Dollars): -$17,400
South Dakota
Average Down Payment Q3 2024: $31,400
Decline (In Dollars): -$6,200
Georgia
Average Down Payment Q3 2024: $15,300
Decline (In Dollars): -$3,000
South Carolina
Average Down Payment Q3 2024: $20,600
Decline (In Dollars): -$3,800
Alabama
Average Down Payment Q3 2024: $7,500
Decline (In Dollars): -$1,200
Montana
Average Down Payment Q3 2024: $63,300
Decline (In Dollars): -$9,600
North Dakota
Average Down Payment Q3 2024: $21,400
Decline (In Dollars): -$3,200
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