The median down payment for buying a home in the United States has jumped to an all-time high, driven by factors like high home prices and mortgage rates, according to a report by real estate brokerage Redfin.
“The typical down payment for U.S. homebuyers hit a record high of $67,500 in June, up 14.8 percent from $58,788 a year earlier,” according to an Aug. 28 news release. Year-over-year down payment costs have been rising continuously over the past months, with June recording the 12th straight month of increase.
Redfin said the spike in down payment was being influenced by current market conditions where “higher-priced, turnkey homes” located in desirable neighborhoods are likely to get sold. Turnkey homes are fully renovated properties that an investor can buy and rent out immediately.
The median price of a U.S. home was also at a “record” high of $442,525. With elevated home prices and mortgage rates, buyers need to put down more money in down payment.
“Investors are still coming in with all-cash offers on homes that need to be renovated. Traditional buyers are putting up large down payments to try and lower their mortgage payment,” said Annie Foushee, a Redfin agent in Denver.
“These buyers will often utilize the help of family members to put down more than they could on their own.”