House Down Payments Are Getting Bigger, Now Averaging Over $63,000

Buying a house is becoming more expensive, not just because of the price tags on homes, but also because the initial payment you make, known as the down payment, is going up. That's the chunk of money buyers pay upfront when purchasing a house.

As house prices rise and interest rates hover around 7%, people looking to buy homes are finding they have to save up more for their down payments. 

A report from Redfin, a real estate brokerage, shows that in December, the average down payment was over $63,000. That's a 7.5% jump compared to the year before when it was around $58,800. As a part of the total price of the house, it's now a little over 16%, which is up from 15% at the same time last year.

Before COVID-19 hit, it was common to put down about 10% of the home's cost. But now, things have changed a lot. High home prices combined with more expensive mortgage costs have turned the housing market on its head.

The average price for a house in December was quoted as $428,000 by Redfin, which is 6% more than the previous year. In fact, about one-third of the buyers paid in full with cash. This jump in down payments makes it even harder for many Americans to buy their first homes, leading them to wait longer. Because of this, the average age of first-time homebuyers is now almost 40, the highest it's ever been.

The good news might be that the rapid increase in home prices may be slowing down a bit. Still, with more people wanting homes than there are available, many buyers are finding they don't have much choice but to pay these higher prices. 

However, in some places, buyers are starting to have better chances to negotiate.

Check out: Top 5 Loan Options for First-Time Homebuyers in 2025

Deposits vary quite a bit depending on where you are in the country, especially in California, where down payments are usually the highest. For example, San Francisco's average is 26.4%, and both Anaheim and San Jose have rates around 25%. On the lower side, in Virginia Beach, Virginia, the average down payment is just 3%, and Detroit and Baltimore have averages below 10%.

With all this variation, Redfin's senior economist, Sheharyar Bokhari, suggests that sometimes it might be smarter to make a smaller down payment. This way, you can save money for things like fixing up the home later or for other investments.

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