Homebuyers Are Increasing Down Payments, but Finding the Cash Remains a Challenge

In December, the median down payment for homebuyers reached $63,188, marking a 7.5% increase from the previous year, according to a recent Redfin report. Despite this rise, a new study from Bankrate highlights that saving for a down payment remains a major challenge for most buyers.

Home prices have been on the rise, and so have down payments.

According to a recent Redfin report, the median down payment for homebuyers in December reached $63,188—a 7.5% increase (about $4,000) from the previous year.

“This mainly reflects the rise in home prices,” said Redfin economist Chen Zhao.

In addition to high prices, homebuyers are also dealing with challenges like inflation, fluctuating mortgage rates, and limited savings.

Redfin data shows that in December, the typical down payment was about 16.3% of the purchase price, with the median home selling for $428,000.

A recent Bankrate report reveals that down payments and closing costs remain significant barriers for aspiring homeowners, even as buyers are putting more cash toward their purchases.

According to the survey, 81% of prospective buyers consider these expenses an obstacle to homeownership. For 52%, the challenge is “very significant,” while 29% find it “somewhat significant.” The survey, conducted by YouGov Plc, polled 2,703 U.S. adults in mid-January.