Rising Trend of Median Down Payments in 2025: Understanding the Impact on Homeownership

Buying a home is a significant investment that requires careful planning and consideration. While a 20% down payment is often touted as the ideal amount, it's not a hard requirement. However, having a good amount of cash on hand, usually tens of thousands of dollars, is crucial to cover the down payment and other expenses. The question is, how much should you be saving up? Is it worth putting down more than the minimum down payment? The answer depends on your loan program, budget, location, and other factors.

According to real estate company Redfin, as of June 2024, the median down payment on a house in the U.S. was $67,500. This is up nearly 15% from just one year prior and represents the highest nationwide down payment in at least the last 13 years. The jump is largely due to higher home prices, as down payments are based on a percentage of the sales price. Since home prices have risen over the last decade or so, loan amounts and down payments have also increased.

The typical home buyer is putting down 18.6% on their purchase price, up from 15% in June 2023. This is much more than the minimum required for many conventional loans, which typically require just 3% down. When broken down by buyer type, first-time home buyers tend to put down less than those who have purchased a home before. In 2023, the typical down payment for a first-time home buyer was 8%, the highest since 1997, according to the National Association of Realtors. The typical repeat home buyer paid more than double that, putting down 19%.

Down payments can vary greatly by location due to differences in home prices and housing market conditions. For example, down payments in Newark, N.J., have increased the most in the last year, jumping 51.5% to a median down payment of $125,000. Other cities with big increases in down payment size include Las Vegas, Nashville, Washington, D.C., and New Brunswick, N.J. Down payments only dropped in three places over the last year: Oakland, Tampa, and Jacksonville, Fla.

When planning your home purchase, consider these average down payments by location as a guideline. Remember that while a higher down payment can help reduce your monthly mortgage payments and interest costs in the long run, it's essential to prioritize your financial security and not overextend yourself financially. A good rule of thumb is to save up at least 20% of the purchase price as a down payment, but don't hesitate to put down more if you can afford it.