Average Down Payment Inches Up on Market Improvements: Report

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Homebuyers had to put slightly more money down on a conventional 30-year fixed-rate mortgage during the second quarter, reversing an 18-month downward trend, according to LendingTree.

The average down payment amount for conventional loans to LendingTree customers was at 17.28% of the loan amount, up from 15.78% in the first quarter.

Appreciating home prices and pent-up demand that brought borrowers back into the housing market with more funds available for a down payment also helped reverse “the downward trend in down payments seen over the past 18 months,” said Doug Lebda, founder and chief executive of LendingTree.

Reflecting these overall market improvements the average down payment amount also increased to nearly $37,580 in the second quarter, from more than $34,700.

Supply shortages in certain markets may also have forced some homebuyers “to put more money down in order to strengthen their offers,” Lebda said, nonetheless the uptick in down payments is a positive development that ultimately leads to lower monthly mortgage payments, helps homeowners build equity faster and reduces loan default risk for lenders.

Down payment amounts vary geographically. At 14.42%, West Virginia featured the lowest average down-payment-to-loan amount ratio.

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