NAR Infographic: A Dollar a Day: Simple Ways to Save For a Down Payment

Washington, D.C. – Sept. 6, 2017 (PRNewswire) Approximately 60 percent of homebuyers financed their home using a 6 percent – or less – down payment, according to data from the National Association of Realtors®. With the most recent median existing-home price clocking in at $258,300, a 6 percent down payment is $15,498. NAR has some simple suggestions for potential homebuyers on how they can cut costs and save for that down payment.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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Down Payment Holding Back Renters from Buying a Home

– Almost 70 percent of renters in 20 U.S. metros say coming up with the down payment is holding them back from homeownership, according to the first Zillow Housing Aspirations Report

– Saving for a down payment was a barrier for more than two-thirds of renters surveyed in a new Zillow survey, topping other hurdles such as job security and qualifying for a mortgage.

– About half of renters surveyed said debt and qualifying for a mortgage were barriers to homeownership.

– Saving for a down payment was a barrier to the greatest share of renters in San Jose, San Diego and Los Angeles — a few of the most expensive rental markets in the country.

– A 20-percent down payment on a typical U.S. home costs more than two-thirds of the national median annual household income. In pricier markets, it can cost more than 180 percent of the average annual income.

Seattle, WA – April 12, 2017 (PRNewswire) Even though a mortgage payment is more affordable than a rent payment on a monthly basis(i), renters say they can’t buy a home due to the pricey down payment, according to the first Zillow® Housing Aspirations Report™ (ZHAR)(ii).

Zillow Logo

Almost 70 percent of renters surveyed cite the down payment as a greater barrier to homeownership than debt, job security and qualifying for a mortgage(iii). Just over half of renters cite qualifying for a mortgage as a barrier to homeownership, and half say debt is holding them back. Almost 40 percent of renters say job security is keeping them from buying a home.

The U.S. homeownership rate is near an all-time low and has been falling since 2004, although members of the largest generation of Americans — millennials — are coming of age and starting to think about buying a home and settling down. Rents are also at record highs, costing almost 50 percent of the median income in some cities. Making a monthly mortgage payment is cheaper than a monthly rent payment in all but two of the 35 largest U.S. metros(iv), but first renters need to save enough money for a down payment.

The Zillow Housing Aspirations Report, a semi-annual survey sponsored by Zillow and conducted by IPSOS, asks 10,000 renters and homeowners in 20 metros across the country about their views on homeownership and their personal housing expectations going forward.

Here are some highlights from the report:

  • Over half (63 percent) of renters are confident that they will be able to afford a home someday, with 25 percent planning on buying in the next three to five years.
  • Millennial renters are more confident than any other generation that they will be able to afford a home someday, with 34 percent planning on buying in three to five years. Almost a quarter (22 percent) said they plan to buy in one to two years and 2 percent of millennial renters said they never plan on buying a home.
  • The majority of respondents (66 percent) believe owning a home is necessary to live The American Dream, and 72 percent believe owning a home increases your standing in the local community — millennials believe these two statements more than any other generation.

With home values across the country at their highest point since June 2007, cobbling together a 20-percent down payment on a home costs more than two-thirds of the U.S. median household annual income(v). In pricier markets like San Jose and Los Angeles, buyers must come up with more than 180 percent of the median annual income, making a home purchase out of reach for many aspiring homeowners.

“With home values close to record highs, it’s no surprise renters are concerned about coming up with enough money to buy a home,” said Zillow Chief Economist Dr. Svenja Gudell. “Rising rents are also a factor — it’s extremely difficult to save when you’re paying record-high rents. While it is possible to put down as little as 3 percent on a home, the trade-off is a higher interest rate and costly private mortgage insurance, a financial tradeoff that may make sense for some buyers. But with interest rates rising in 2017, it’s important to remember that a lower interest rate can save buyers thousands of dollars over the life of their loan. For those trying to save for a down payment, it’s important to set realistic goals and realize it may take a few years. Also, consider working with a reputable financial advisor to help set a budget that works for you.”

San Jose, San Diego and Los Angeles had the greatest share of renters say affording the down payment is the number one barrier to owning, at over 72 percent. Women (72 percent) were more likely than men (62 percent) to select the down payment as the top barrier to homeownership.

One-third of buyers used more than one source of funds for their down payment, including gifts and loans from family, according to the Zillow Group Report on Consumer Housing Trends(vi). Over half of buyers saved by setting aside a little money at a time.

Mortgage rates on Zillow ended the month of March at 3.94 percent, down from a high of 4.13 percent in the middle of the month(vii). Home shoppers can use the Zillow Affordability Calculator to see how varying loan amounts and down payments will impact monthly payments and the lifetime balance of their mortgage.

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About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc. Housing Aspirations Report is a trademark of Zillow, Inc.

IPSOS is a registered trademark of IPSOS S.A.

(i) In the U.S., the monthly median mortgage payment takes 15.8 percent of the median monthly income while the monthly median rent payment takes 29.2 percent of the median monthly income.

(ii) The Zillow Housing Aspirations Report is computed from an IPSOS poll which combines sample of 10,000 U.S. adults from 20 U.S. core-based statistical area (CBSA) metropolitans (Atlanta, Boston, Chicago, Dallas, Denver, Detroit, Los Angeles, Las Vegas, Miami, Minneapolis, New York, Philadelphia, Phoenix, St. Louis, San Diego, San Francisco, San Jose, Seattle, Tampa, and Washington, D.C.) age 18+, surveyed online in English. The survey has a credibility interval of plus or minus 1.1 percentage points for all respondents from the 20 U.S. metropolitans and approximately 5.0 percentage points for an individual U.S. metropolitan. Post-hoc weights were made to the population characteristics on gender, age, region, and race and ethnicity. This version of the survey was conducted March 1st – 15th, 2017. For more information about conducting research intended for public release or Ipsos’ online polling methodology, please visit the Public Opinion Polling and Communication page.

(iii) Renters surveyed said coming up with a down payment is a greater barrier than qualifying for a mortgage, debt, job security, not being in a position to settle down and low inventory of homes.

(iv) San Jose and Miami are the only metros among the largest 35 U.S. metros where a mortgage payment takes up more income than a rental payment.

(v) Zillow release on down payment costs here.

(vi) The first annual Zillow Group Report is the largest-ever survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them, and what frustrations and aspirations color their decisions.

(vii) Rates for a 30-year fixed mortgage. High of 4.13 percent was hit on March 14, 2017.

Down Payments Fall Slightly In Q1 2016

Charlotte, NC – April 28, 2016 (PRNewswire) According to the latest national down payment report released today by LendingTree®, a leading online loan marketplace, average down payment percentages for conventional 30-year fixed rate purchase mortgage offers fell slightly in the first quarter to an average of 16.64 percent, down from 17.46 percent in the prior quarter and 16.98 percent from the same period last year. The average down payment amount also fell quarter-over-quarter from $51,721 to an average $49,839, but increased year-over-year from $44,007.

The average down payment for all purchase mortgages, including FHA, VA, non-prime, and jumbo mortgages in the first quarter was $44,058, or 12.18 percent of the home’s purchase price.

Lending Tree

“Despite seasonality, home sales improved year-over-year and while low inventories fueled price growth in many markets,” said Doug Lebda, founder and CEO of LendingTree. “According to the National Association of Realtors, pending home sales rebounded in February, and existing home sales surged in March. This momentum suggests a strong spring home-buying season given low mortgage rates, improved housing inventory levels and growing consumer confidence.”

The average down payment on an FHA mortgage in the first quarter was 8.74 percent, or $16,998, representing a slight increase from Q1 2015. The average down payment on a jumbo mortgage was 23.89 percent, or $194,950 in Q1 2016.

LendingTree has ranked each state according to the conventional average down payment percentages offered to LendingTree customers from lowest to highest. The complete listing can be found on LendingTree’s press room.

The ten states with the lowest average down payment percentage for a 30-year fixed rate conventional loan are:

Table 1

The ten states with the highest average down payment percentage for a 30-year fixed rate conventional loan offers are:

Table 2

Additionally, LendingTree ranked 100 major US cities by down payment percentages from lowest to highest. The top and bottom ten are as follows:

Table 3

Table 4

About LendingTree:

LendingTree (NASDAQ: TREE) is the nation’s leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 55 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 350 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:

Megan Greuling
Megan.Greuling@LendingTree.com
(704) 943-8208

Down Payment Amounts Rise as Housing Market Strengthens

Charlotte, NC – Jan. 25, 2016 (PRNewswire) According to the latest national down payment report released today by LendingTree®, a leading online loan marketplace, average down payment percentages for conventional 30-year fixed rate purchase mortgage offers fell slightly in the fourth quarter to an average of 17.46 percent, down slightly from 17.63 percent in the prior quarter. Although down payment percentages fell, the average down payment amount climbed quarter-over-quarter to $51,721, an increase from the previous quarter’s average of $48,924. The average down payment for all purchase mortgages, including FHA, VA, non-prime, and jumbo mortgages in the second quarter was $51,663.84 or 15.19 percent of the home’s purchase price.

Lending Tree

“The fourth quarter marked another period of housing market improvement, where home values continued to rise for most markets,” said Doug Lebda, founder and CEO of LendingTree. “Higher home prices mean larger down payment amounts, even though down payment percentages remain fairly flat. As we continue to see the housing market improve, current homeowners who have postponed a move may be more inclined to sell, creating more housing inventory for buyers across different price distributions.”

The average down payment on an FHA mortgage in the second quarter was 8.12 percent, or $16,793, representing a slight increase from Q3 2015. The average down payment on a jumbo mortgage was 23.67 percent, averaging just over $200,000 in Q4 2015.

Infographics for complete report rankings may be found on the LendingTree Press Room. Below, LendingTree ranks each state according to the conventional average down payment percentages offered to LendingTree customers from lowest to highest. The ten states with the lowest average down payment percentage for a 30-year fixed rate conventional loan are:

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The ten states with the highest down payment percentage for a 30-year fixed rate conventional loan offers are:

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To view the original release along with the associated high-resolution infographics, please visit the LendingTree Press Room.

About LendingTree:

LendingTree (NASDAQ: TREE) is the nation’s leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 55 million loan requests. LendingTree provides free monthly credit scores through MyLendingTree and access to its network of over 350 lenders offering home loans, personal loans, credit cards, student loans, personal loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:

Megan Greuling
Megan.Greuling@LendingTree.com
(704) 943-8208

LendingTree Reports Average Down Payments Fall in Q1 2015

As lenders loosen mortgage guidelines, average down payment amounts decline

Charlotte, NC – June 12, 2015 (PRNewswire) According to a report released today by LendingTree, the nation’s leading online loan marketplace, down payment percentages for conventional 30-year fixed rate purchase mortgages decreased in the first quarter to an average of 16.98%, down from 17.59%, in Q4 2014. Additionally, the average down payment amount also fell quarter-over-quarter to $44,007 from $47,585 in the previous quarter.

Lending Tree

“As lenders need more mortgage volume, average down payments start to drop,” said Doug Lebda, founder and CEO of LendingTree. “More lenders are beginning to loosen their guidelines and are going after a slightly broader pool of potential borrowers. For first time homebuyers, this spring and summer homebuying season is proving itself to be an excellent time to enter the market.”

An infographic released by LendingTree ranks each state according to the average down payment percentages offered to LendingTree customers from lowest to highest:

Down Payment Affordability

The ten states with the lowest average down payment percentage for a 30-year fixed rate conventional loan are:

Table 1

The ten states with the highest down payment percentage for a 30-year fixed rate conventional loan are:

Table 2

To view this release in LendingTree’s press room, along with the associated infographic, please visit:
www.lendingtree.com.

About LendingTree:

LendingTree (NASDAQ: TREE) is the nation’s leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 35 million loan requests. LendingTree provides access to lenders offering home loans, personal loans, student loans, personal loans, business loans, home equity loans/lines of credit, auto loans and more. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:

Megan Greuling
(704) 943-8208
Megan.Greuling@lendingtree.com

US Average Down Payment Percentage Falls to 15.78% in Q1 2014

LendingTree Average Down Payment Report – Mortgage lenders loosen standards as rates rise and the housing market improves

Charlotte, NC – April 23, 2014 (PRNewswire) According to a report released today by LendingTree, down payment percentages for 30-year fixed rate purchase mortgages declined in the first quarter to an average of 15.78%, down from 16.01% in Q4 2013. Additionally, average credit scores for borrowers matched with lenders on the LendingTree network have dropped 6% year over year, suggesting that lenders are more willing to consider a wider pool of borrowers.

Lending Tree

“As the housing market improves and refinance activity declines, lenders are adapting their guidelines to improve credit accessibility for borrowers,” said Doug Lebda, LendingTree founder and CEO. “Relaxed lending guidelines translates to a larger pool of qualified homebuyers that could boost the housing recovery. While lenders still need proof that a borrower has the financial ability to repay the loan, lenders have started to accept lower down payments and credit scores from potential borrowers.”

An infographic released by LendingTree ranks each state according to the average down payment percentages offered to LendingTree customers. The top ten states with the lowest average down payment percentage for a 30-year fixed rate conventional loan are:

1. North Dakota 12.31%
2. Nebraska 12.50%
3. West Virginia 12.50%
4. Missouri 12.89%
5. Alabama 12.89%
6. New Mexico 12.89%
7. Iowa 12.98%
8. Arkansas 13.36%
9. Kentucky 13.71%
10. Idaho 13.81%

New Jersey (19.36%), New York (18.54%), California (18.21%), Connecticut (18.01%) and Hawaii (17.89%) top the list with the highest average down payment percentages.

First Quarter 2014 Real Estate Down Payment Infographic

Click here for the infographic.

About LendingTree, LLC:

LendingTree, LLC is the nation’s leading online source for competitive home loan offers, empowering consumers during the mortgage, refinance or auto loan process. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 30 million loan requests and $214 billion in closed loan transactions. LendingTree provides access to lenders offering mortgages and refinance loans, home equity loans/lines of credit, and more. LendingTree, LLC is a subsidiary of Tree.com, Inc. (NASDAQ: TREE). For more information go to www.lendingtree.com, dial (800) 555-TREE, join our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:

Megan Greuling
(704) 943-8208
Megan.Greuling@tree.com