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While the average down payment percentage of purchase price stayed mostly flat, the average dollar amount dropped 10% from the previous quarter, according to LendingTree.
The national average down payment in the third quarter was $47,265 this year, down from the second quarter’s $52,480. The steep quarterly decline could signal housing prices coming down, in addition to sales hitting their annual slow period. The average down payment percentage actually inched up quarter-over-quarter to 18.05% from 18.02%.
“The average down payment on a U.S. home fell in the third quarter, though down payments as a percentage of purchase price remained about the same,” Tendayi Kapfidze, chief economist at LendingTree, said in a press release.
The time it’s taken potential homebuyers to save for a down payment is at its highest since the housing bubble and ongoing affordability concerns decelerated home price appreciation.
“As LendingTree’s data shows, the average down payment for a home is decreasing and loan amounts fell. This is good news if you are looking to buy, as it means that you will need to save less money for a down payment. If high down payments have deterred you from buying a home in the past, now might be a good time to reconsider your options,” said Kapfidze.
California (21.44%), Hawaii (21.32%), Delaware (21.29%), Colorado (20.44%) and New York (19.85%) led the third quarter in down payment percentage. Alaska (15.41%), West Virginia (15.44%), Mississippi (15.78%), Iowa (15.8%) and Arkansas (15.9%) were the bottom five states.
California was also tops in average down payment amount with $97,809, while West Virginia’s $21,415 was the lowest.