Key takeaways
- Down payments reached an average of 14.4% and a median down payment amount of $30,250 in the fourth quarter of 2024. Both values were down from the 2024 Q2 historical peak (15.1%, $32,700) but set a new Q4 record.
- As a whole, 2024 saw the highest down payments in the data’s history, both as a dollar amount and as a share of purchase price.
- Down payments on second homes and investment properties, which have typical down payments of 28% and 27.4%, respectively, in Q4 2024 are just shy of double the typical share of down payments on primary residences.
- The typical “modest” down payment amount (approximated as the 30th percentile down payment) was $8,200, less than a third of the median amount.
Down payments ease seasonally, but resume annual climb
Down payments fell from Q3, as is seasonally appropriate, but set a new Q4 record in terms of both the share of purchase price and the absolute dollar amount. The typical down payment in the fourth quarter was $30,250, ever so slightly below the third quarter’s level and roughly $3,000 higher than one year prior. The typical Q4 down payment as a share of purchase price was 14.4%, down 0.1 percentage point quarter over quarter and up 0.2 percentage point year over year.
As a whole, 2024 saw the highest down payments in the data’s history, both as a dollar amount and as a share of purchase price. Buyers paid 14.4% as a share of the purchase price and $29,900 on average in 2024, up from 14.2% and $27,200 in 2023.
Down payments were 3.4 percentage points higher than pre-pandemic (2019 Q4) in the fourth quarter of 2024, emphasizing the trend toward bigger down payments. Higher mortgage rates and higher home prices influence this trend as more financially prepared, high-earning buyers claim homes while entry-level and lower-earning buyers continue to sit out. Additionally, high mortgage rates incentivize buyers to put down more as a down payment as a means of limiting loan size and thereby interest payments.
The housing market is not expected to shift dramatically in the coming months, so recent down payment trends are likely to persist. Mortgage rates have eased in recent weeks, but remain in the high 6% range, pricing out many would-be buyers when coupled with still-high home prices. As a result, home sales picked up in the $750,000-plus price range in 2024 (+7.4%), while fewer homes sold for less than $750,000 compared with 2023 (-9.3%). Put differently, housing activity is growing in the high-priced segment but shrinking in lower-priced segments, which has pushed the median sale price and median down payment amount higher.
A larger percentage down on typically higher-priced homes means the buyers paid 125.5% more as a down payment in the fourth quarter of 2024 ($30,250) compared with Q4 2019 ($13,400). The median home sale price climbed 43.8% between Q4 2019 and Q4 2024, accounting for some of the growth in down payments. In the same period, the typical down payment as a share of purchase price climbed 3.4 percentage points, accounting for another portion of the dollar amount increase. Each of these components and their interaction (higher share of a higher home price) resulted in the typical down payment dollar amount more than doubling over the past five years.
Though the fourth quarter of 2024 was not an overall peak, it was the fourth-highest down payment in terms of percentage down and fifth highest in terms of dollar amount in the data’s history (back to 2013). Notably, home sales price hit a new peak in June 2024 as down payment share and dollars down both hit a historical peak in the same quarter. Prices have since eased slightly, as is seasonally typical, but remain near the historical high.
| Primary Residence | Avg Down Payment as % of Purchase Price | Med. Down Payment ($ amt) | ||||||
| 2021 Q4 | 2022 Q4 | 2023 Q4 | 2024 Q4 | 2021 Q4 | 2022 Q4 | 2023 Q4 | 2024 Q4 | |
| United States | 12.7% | 13.5% | 14.2% | 14.4% | $24,000 | $25,200 | $27,100 | $30,250 |
Homebuyers utilize pandemic-era savings and home equity
In the three years before the pandemic, the U.S. personal savings rate averaged 6.5%, meaning that on an aggregate basis, consumers saved 6.5% of their disposable income. The relatively high personal savings rate during the pandemic—which spiked to over 30% and was above the pre-pandemic norm for more than 20 months—contributed to a buildup in savings, which in turn fueled consumer spending as well as larger down payments.
The personal savings rate has recovered from mid-pandemic lows, though not to pre-pandemic levels. Personal savings climbed to a post-pandemic peak of 5.5% in January 2024, fell to 4.6% by January 2025. The recent fall in the savings rate has taken a toll on excess savings, but at an aggregate level, the nest egg built up during the pandemic has not been fully depleted, thus, there is still excess personal savings, likely fueling both overall consumption and home down payment growth.
A lower savings rate over the past two years suggests that buyers would have a harder time saving for a large down payment. However, the typical down payment dollar amount is still more than double the pre-pandemic median, and the typical down payment as a share of purchase price was more than 3 percentage points higher. Still-large accumulations of pandemic savings likely help some homebuyers, especially buyers who also have the benefit of near record-high existing home equity, which can boost a down payment as well.
Modest down payments climb but remain below peak
There is a wide distribution of down payments, and trends at the median might not reflect trends among those making more modest down payments. For example, first-time buyers tend to buy lower-priced homes and typically make lower down payments. Furthermore, buyers taking advantage of government-backed loan options such as FHA or VA loans—a key benefit to current and former service members—also tend to make lower down payments. To approximate how trends may have evolved for these more modest down payments that likely include many first-time homebuyers, we looked at the 30th percentile down payment amount.
In the fourth quarter of 2024, the 30th percentile down payment was $8,200, less than one-third of the median down payment amount, up 6.5% year over year. This modest down payment level peaked in the second quarter of 2022 at $10,300. The highly competitive pandemic-era market pushed even the low end of down payments much higher as buyers paid more as a means of competition and as a result of the pandemic-era boost in savings. Pre-pandemic (2019), the typical modest down payment was $4,600, nearly $4,000 below the 2024 level. The gap between the 30th percentile down payment and the median down payment grew during the pandemic and remains much larger than pre-pandemic.
First-time buyers tend to use loan types that allow for lower down payments. In Q4, 25.2% of all buyers used an FHA loan, 10.3% used a VA loan, and 1.6% used a USDA loan. These loan types enable buyers to put down a smaller down payment, or in some cases, no down payment at all.
As low-down-payment government loans comprised roughly 37% of all mortgages in Q4, these loan types are driving the 30th percentile down payment by share. The change compared with pre-pandemic levels is in large part due to the falling share of government mortgage loans.
Primary residence down payments lag investment/secondary properties
Primary-residence down payments continue to lag investment property and second-home down payments as a percentage of sale price, but both saw down payments fall in Q4, straying from the primary-residence trend. On average, investment properties saw down payments of 27.4% in Q4 2024, 0.6 percentage point lower as a percentage of purchase price than in Q4 2023. Second-home down payments were typically 28% in Q4 2024, down 0.8 percentage point from Q4 2023.
Buyers who can afford investment and second-home purchases opted to pay more as a down payment, perhaps due to nonprimary home purchase requirements and to avoid higher interest payments. The typical down payment in dollars on a second home or investment property was more than 2.5 times as large as the typical primary residence down payment in Q4 2024.
Moving forward
Down payments climbed as both a share of purchase price and as a dollar amount in 2024 Q4 relative to one year prior, reversing the Q3 annual trend. Buyer demand is likely to remain stifled until housing becomes more affordable, which will likely follow lower mortgage rates. However, for the time being, the market is accessible only to higher-earning buyers who are less sensitive to home prices and mortgage rates. This means that down payments are likely to remain relatively high as the market leans toward homebuyers with significant purchasing power.
As mortgage rates ease, a more diverse set of buyers, in terms of budgets, will likely enter the market, and the incentive to minimize their home loan will soften. However, if for-sale inventory fails to keep up with increased buyer demand, down payments could climb once again as the result of increased competition.
Methodology
Down payment trends analyzed at the national and top 150 metro levels through Q4 of 2024 using Optimal Blue data. Down payment as a share of the sale price is calculated as an average across the data. Down payment as a dollar amount is calculated by taking the median across the data. All comparisons are between the fourth quarter of the current and previous years unless otherwise stated. “Modest” down payments are approximated as the 30th percentile by down payment amount and down payment share.
