Historically, down payments tend to hit their seasonal peak in the third quarter of the year; however, this year's down payment share peaked in the second quarter, according to the Realtor.com^® bi-annual down payment report. Nationwide, down payments reached an average of 14.5% and a median down payment amount of $30,300, in the third quarter of 2024, down from the Q2 2024 historical peak of 14.9% and $32,700, and down year-over-year as easing mortgage rates improved affordability conditions.

"The annual decline in down payments is the result of less buyer competition in the third quarter. Easing demand and increasing inventory gave buyers more flexibility last quarter, which led to slightly lower down payments," said Hannah Jones, senior economic research analyst, Realtor.com^®. "The recent drop in mortgage rates could pave the way for more competition in the coming months, especially if rates fall further, but we haven't yet seen that reflected in home sales or down payment trends."

Homebuyers Continue to Utilize Pandemic-Era Savings

Large accumulations of pandemic savings are likely still helping some home buyers put down a large down payment, especially buyers who also have the benefit of record high existing home equity that can boost a down payment. The typical down payment dollar amount is 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.

Looking Forward

Down payments fell as both a share of purchase price and as a dollar amount in 2024 Q3 relative to one year prior and to the 2024 Q2 peak.

"It is too early to tell if this is the beginning of a lasting downward trend in down payments. While down payments have started to trend lower with lower demand, they remain historically high," said Jones. "Easing mortgage rates may bring more buyers back into the market, potentially increasing competition – and down payments – once again if for-sale inventory fails to keep pace with demand."

As long as housing market competition continues, down payments are likely to remain elevated nationally, but distinct trends may emerge in different markets as local competitiveness varies. Shoppers looking to navigate these trends may find that relatively affordable markets offer the opportunity to achieve homeownership and limit interest payments by using their existing savings to put a larger amount down as a down payment on a home.

Key Regional Data

Northeast States See Climbing Down Payments

At the state-level, the increase in down payment as a percent of price increased the most (1.8 percentage points) in Maine and Rhode Island, followed by Connecticut (+1.2 pp), Vermont (1.1 pp) and New Jersey (+1.0 pp).

States with Largest Down Payment Growth in 2024 (%)

In terms of down dollar payment amount, Rhode Island saw the largest increase in Q3 2024, where the typical down payment increased from $45,300 in Q3 2023 to $60,400 in Q3 2024 (+33.3%). Measuring in this way, drivers include both the increase in down payment and the median home price increase. The list has mostly higher-than-average down payment markets, plus Ohio which tends to see a lower percentage down.

States with Largest Down Payment Dollar Growth Q3 2023-2024

Down payments shrank annually in half of the states in the U.S.

In Q3 2024, down payments as a share of purchase price fell in 24 states, and down payment dollar amounts fell in 21 states. The lists of places with the largest decline in the percentage down and dollars down has significant overlap. Pandemic-era hotspots like Texas, Florida, and Montana have seen significant softening over the last year as waning demand and climbing inventory impact home prices and reduce competition.

States with Biggest Down Payment Declines (%)

Florida saw down payments fall 24.0% year-over-year in Q3, which translated to a nearly $9,000 drop. The District of Columbia saw the biggest absolute decline, with down payments dropping more than $17,000 year-over-year, a 17.7% drop. Despite this decline, down payments are still more than $80,000 on average in the district. For the District of Columbia, in particular, falling down payments may reflect ongoing preference for and availability of remote work that households have previously used to locate further from downtown jobs and find more housing affordability.

States with Biggest Down Payment Declines ($)

To learn more, read the full report here.