Homebuyers have been putting a bit more down recently.
The typical U.S homebuyer put 16.3% down when buying a home in December, up from 15% at the end of 2023, according to a report on the 40 most-populous metropolitan areas from real-estate-website Redfin.
Still, the end-of-2024 levels are down from between nearly 18% and 20% from May through August of that year.
In dollar terms, Redfin said that equals $63,188, up 7.5% from a year earlier and the biggest increase in five months.
The increase in money put down is largely because home prices have increased, Redfin said: The median home price rose to around $428,000 in December, a spike of 6.3% from a year prior.
A bigger down payment can lower mortgage payments and help in a bidding war, but "bigger isn't always better," said Sheharyar Bokhari, senior economist at Redfin, in the report.
“Housing markets in much of the country have started tilting in buyers’ favor, allowing buyers to set the terms they want," Bokhair said. "That means house hunters don’t necessarily need to break the bank for a huge down payment if it makes more financial sense to save some money for things like future home renovations or other investments.”
Earlier in February, Redfin said the housing market has shifted to a buyer's market for the first time in six years.
What about all-cash home purchases?
The popularity of all-cash home purchases, which became more frequent when interest rates rose, has also fallen.
Nearly 31% of homes were bought entirely with cash at the end of 2024, up from September's low of nearly 29%, but down from nearly 34% in 2023, Redfin said.
More people were paying all cash for homes in 2023 because that is when mortgage rates peaked at a two-decade high of nearly 8%, Redfin said.
Since then, mortgage rates have come down to the 6% to 7% range.
How are down payments different in parts of the U.S.?
Wealthier, more desirable areas tend to see larger down payments.
Down-payment percentages were the highest in San Francisco (26.4%), followed by other California metros San Jose and Anaheim (both at 25%).
They were the lowest in Virginia Beach (3%), Detroit (6.5%) and Baltimore (8.5%).
The share going to down payments fell in eight of the 40 most-populous metropolitan areas, Redfin said, including the biggest declines in Portland, Oregon (-4.6 points to 15.4%), Orlando, Fl. (-3 points to 15%) and Jacksonville, Fl. (-2.1 points to 10%).
They rose the most in Charlotte, North Carolina (4.1 points to 14.1%), Minneapolis (1.4 points to 11.4%) and San Francisco (1.4 points to 26.4%).
Below is a table on down payment trends among 40 of the most-populous U.S. metropolitan areas in Dec. 2024.
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