5 US Cities Where Homebuyers Are Forking Over the Largest Down Payments
Written by
Adam Palasciano
Edited by
Cory Dudak
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Since the onset of the COVID-19 pandemic in March 2020, the cost of buying a home has skyrocketed. This is due to high demand driving up prices coupled with a steep increase in mortgage rates. In fact, the average mortgage rate was 3.72% in January 2020, and it stood at 8% as of Oct. 18, CNBC’s Make It reported. The median price of a home has increased 26% since 2020.
But home prices and mortgage rates aren’t the only things to consider when you’re buying a home. Your down payment amount is important, too. While a 20% down payment lets you avoid paying mortgage insurance, it’s possible to buy a home with 5% down or less. However, you might need more than that to make a competitive offer or purchase a second home, especially in pricier markets.
US Cities Where Homebuyers Are Fronting the Most Money
These five metropolitan areas are seeing the largest down payments, according to Realtor.com.
5. Boston, Massachusetts
Boston homebuyers are fronting larger down payments so they can win bidding wars on the limited number of properties available. In fact, the number of properties for sale in the Boston metro area was down 16.6% year over year in September. At the same time, prices were up 14.1% due to the high demand.
- Average down payment (percentage): 21%
- Median down payment: $108,654
- Median home list price: $849,000
4. Asheville, North Carolina
Asheville, North Carolina is located in the Blue Ridge mountains and is famous for its outdoor lifestyle and craft beers. The city has long been sought after by retirees, artists and vacationers. Its location about two hours away from Knoxville, Tennessee, and Charlotte, North Carolina, is a draw for luxury buyers with deep pockets.
- Average down payment (percentage): 21.8%
- Median down payment: $63,733
- Median home list price: $600,000
2. Fort Collins, Colorado
Fort Collins, Colorado, has become known as a somewhat more affordable destination compared to Denver, which is about an hour to the south. The city was originally founded as a military fort in 1864. Today, Fort Collins is an outdoor-friendly community teeming with cultural sites such as museums and art galleries.
- Average down payment (percentage): 23.2%
- Median down payment: $105,533
- Median home list price: $625,000
2. North Port, Florida
Located on the Gulf Coast in southwestern Florida, North Port is part of the Sarasota metro area. It’s a hot spot for retirees and for vacationers searching for a second home, which makes the housing market here competitive — especially since the supply of homes is limited.
- Average down payment (percentage): 23.5%
- Median down payment: $81,853
- Median home list price: $525,000
1. Santa Rosa, California
Santa Rosa, California, is about an hour north of San Francisco. Located in Sonoma County’s wine country, this metropolitan area is by far the most expensive on Realtor.com’s list.
- Average down payment as a percentage of the home sale price: 25%
- Median down payment: $147,550
- Median home list price: $1,070,990
As mortgage interest rates remain stubbornly high and demand for homes continues to outpace supply, down payments in these markets aren’t likely to shrink anytime soon.
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