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First-Quarter Down Payment Hits Lowest Since 2021 as Housing Market Tilts Toward Buyers, Realtor.com Says

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First-Quarter Down Payment Hits Lowest Since 2021 as Housing Market Tilts Toward Buyers, Realtor.com Says

First-quarter down payment in the US reached its lowest level since 2021 as the housing market slowly shifts toward more buyer-friendly conditions, News Corp's (NWS, NWSA) Realtor.com said Tuesday.

The typical down payment dropped 19% year over year to $23,400 in the March quarter, marking the fourth straight quarterly decrease and the lowest level recorded since 2021, according to the online real estate portal.

"Down payments are falling as the housing market slowly tilts toward buyers," Realtor.com Senior Economist Hannah Jones said. "High prices and borrowing costs continue to test affordability, and while conditions are improving, some of the buyers re-entering the market are doing so via government-backed programs that have lower down payment requirements."

In terms of key US regions, the softening in down payments was most pronounced in markets where inventory has recovered most fully and home prices have cooled most, with the South and West seeing the biggest drops. The Northeast continues to be the most competitive market, according to the report.

Down payments in the US peaked at $32,700 in the second quarter of 2024 following years of soaring house prices and intense competition, but the pandemic-era highs are now steadily unwinding. Down payments reached their first-quarter high in 2025 with a median of $28,900 and an average of 14% of the purchase price before steadily easing lower, the report showed.

The buyer pool is expanding with marginal improvement in affordability, though many are stretching their finances and increasingly relying on government-backed loan programs to finalize their deals, according to the report.

Together, Federal Housing Administration and Veterans Affairs loans now account for more than a third of all purchase mortgages, Realtor.com said.

"Government-backed programs are serving as a critical pressure valve, keeping the door to homeownership open for buyers who might otherwise be shut out entirely," Jones said. "The growing reliance on FHA and VA financing also reflects how much the conventional path to homeownership has narrowed for buyers without significant cash reserves."

Price: $30.22, Change: $-0.01, Percent Change: -0.03%

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