The common down fee on a house in San Francisco is $131,631.
Whereas there are indicators that the overheated housing market is lastly beginning to settle down, dwelling costs are nonetheless considerably greater in lots of components of the nation than earlier than the pandemic. One of many negative effects of those greater dwelling costs is greater down funds.
As an instance excessive down funds, LendingTree analyzed knowledge from greater than 960,000 customers of its platform who lived in one of many nation’s 50 largest metros and have been provided a 30-year, fixed-rate mortgage from January 1 to October 10.
The web lending market discovered that dwelling consumers throughout the nation’s 50 largest metros are placing tens of 1000’s of {dollars}, on common, towards their down funds. Even in areas the place family incomes and mortgage quantities are comparatively low, five-figure down funds are frequent.
A down fee on a house throughout the nation’s 50 largest metros averages $62,611. For comparability, that quantity is 35.3% greater than when LendingTree final revealed this research in September 2021, when the typical down fee throughout the nation’s 50 largest metros was $46,283. Whereas common down funds can range considerably by location, no metro featured within the research’s 2022 replace has a mean of lower than $38,000.
California is dwelling to the three metros the place down funds are highest — San Jose, San Francisco and Los Angeles. The common down fee in San Jose is $142,006. In San Francisco and Los Angeles, these figures are $131,631 and $104,749, respectively. These are the one metros in our research the place common down funds prime $100,000.
Oklahoma Metropolis, St. Louis and Virginia Seaside, Virginia are the metros with the bottom down funds. Down funds in these metros common $38,169, $40,113 and $40,530, respectively.
Throughout the nation’s 50 largest metros, the typical down fee on a house equates to 58.3% of that space’s common yearly family earnings.
Down funds are probably the most inexpensive relative to earnings in Hartford, Connecticut; St. Louis; and Virginia Seaside. Throughout the three metros, dwelling consumers put 43.5% of their space’s common annual family earnings towards a down fee.
Los Angeles, San Diego and San Francisco are the metros the place down funds are least inexpensive relative to earnings. Throughout the three metros, dwelling consumers put 83.4% of their space’s common annual family earnings towards a down fee.
Metros with the very best common down funds
No. 1: San Jose, California
- Common down fee: $142,006
- Common mortgage quantity: $636,091
- Common annual family earnings: $195,284
- Common down fee as a proportion of common family earnings: 72.7%
No. 2: San Francisco
- Common down fee: $131,631
- Common mortgage quantity: $593,860
- Common annual family earnings: $167,674
- Common down fee as a proportion of common family earnings: 78.5%
No. 3: Los Angeles
- Common down fee: $104,749
- Common mortgage quantity: $535,268
- Common annual family earnings: $115,845
- Common down fee as a proportion of common family earnings: 90.4%
Metros with the bottom common down funds
No. 1: Oklahoma Metropolis
- Common down fee: $38,169
- Common mortgage quantity: $252,495
- Common annual family earnings: $82,109
- Common down fee as a proportion of common family earnings: 46.5%
No. 2: St. Louis
- Common down fee: $40,113
- Common mortgage quantity: $248,228
- Common annual family earnings: $96,061
- Common down fee as a proportion of common family earnings: 41.8%
No. 3: Virginia Seaside, Virginia
- Common down fee: $40,530
- Common mortgage quantity: $287,146
- Common annual family earnings: $94,877
- Common down fee as a proportion of common family earnings: 42.7%
Whereas giant down funds could make shopping for a house tougher for some, they’ll make the method simpler — and doubtlessly extra inexpensive in the long run — for others.
Lending Tree provided these three suggestions for developing with a down fee:
- Save, save, save. Usually, the extra time you give your self to save lots of for a down fee, the higher. After all, saving may be troublesome, particularly with excessive inflation. However doing issues like consuming out much less typically or taking fewer holidays might make it easier to construct up a major sum of money over time.
- Take into account completely different mortgage choices. Whereas a 20% down fee could also be best, numerous mortgage choices require much less upfront money. For instance, FHA loans require a down fee of as little as 3.5%. Have in mind, nevertheless, that whereas discovering a approach to cut back a down fee could make it simpler for somebody to buy a house, a smaller down fee will end in a better mortgage quantity and doubtlessly even a better rate of interest. That implies that a house purchaser’s month-to-month funds could possibly be costlier.
- Look into down fee help packages. In some situations, a borrower could qualify for assist from a down fee help program. These packages can present grant cash or different reductions that make a down fee extra inexpensive.
