The daily wire

Average Down Payment On Houses Drops As Real Estate Demand Cools

Homebuyers in the United States have been making lower down payments on homes due to a decrease in demand for properties, according to an analysis by Redfin. The median down payment for a mortgage-financed home was $42,375 in January 2023, equaling 10% of the purchase price, a decline from the 13.6% share recorded in January 2022 and the peak of 17.5% in May 2022. Elevated mortgage rates and economic turmoil have slowed competition in the housing market, reducing the need to make higher down payments to attract buyers.

The chronic trend of decreased construction levels for residential real estate, exacerbated by supply chain bottlenecks and low labor force participation due to lockdown mandates, led to home prices and median down payments soaring over the past three years. As of 2019, the housing market experienced a shortage of 3.8 million properties, according to data from Fannie Mae. Despite the recent drop of 35% from their peak, down payments remain 30% higher than before the lockdown-induced recession.

Some reasons for the decreased down payments include high shelter costs and overall inflationary pressures, which are depleting the savings buyers can allocate for down payments, and a decline in home prices caused by higher mortgage rates. Down payments have reduced by 33% in Sacramento, California, over the past year, 28% in Atlanta, Georgia, and 23% in Orlando, Florida. Only Newark, New Jersey, and San Francisco, California, saw higher down payment percentages.

Apartment rental markets reflect a reversal in the trend for larger properties during the pandemic. The average size of new apartments was 887 square feet in 2022, decreasing 3% since the previous year and 54 square feet in the past decade, according to a recent report from RentCafe. Average rental prices, however, increased 26% from $1,568 in December 2019 to $1,981 in December 2022, according to data from Zillow.

CLICK HERE TO GET THE DAILYWIRE+ APP

Disclaimer: “The views and opinions expressed here are solely those of the author of the article and not necessarily shared or endorsed by Conservative News Daily”

.



" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases

Related Articles

Sponsored Content
Back to top button
Available for Amazon Prime
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker