Down payments rising in hot housing market
With fewer homes hitting the market, prices are rising.
That is translating into higher down payments for home buyers, especially in more expensive markets, according to California-based ATTOM Data Solutions.
The national median down payment in the third quarter was $20,000, up from $18,161 in the previous quarter and up from $14,400 in the third quarter of 2016. It's the highest value as far back as data is available, which was the first quarter of 2000.
That $20,000 down payment equates to 7.6 percent of the median sale price for a home purchase with a loan, a four-year high.
The median down payment was more than $50,000 in 12 of 99 metropolitan areas analyzed by ATTOM, with the highest payments concentrated in parts of southern California and Colorado, as well as big markets such as New York City, Boston and Seattle.
"Buying a home has become a full-contact sport in many markets across the country, and buyers with the beefiest down payments — not to mention all-cash buyers — are often able to muscle out those with scrawnier savings," said Daren Blomquist, senior vice president at ATTOM.
In Central Pennsylvania, the median down payment isn't quite that high, but it is creeping up in some areas.
In the third quarter, the median down payment ranged from $4,538 in the York-Hanover metropolitan area, or 2.7 percent of the median sale price, to a high of $13,495 in Lancaster County, or 7.1 percent of the median sale price.
For Lancaster County, that was up from 5.7 percent last year. In York-Hanover, the median down payment a year ago was 2.1 percent.
By contrast, the median down payment in Harrisburg-Carlisle was $8,669 in the third quarter, or 4.9 percent of the median sale price. That was down from 5.2 percent last year, according to ATTOM.
Data for Lebanon County was not available.
The ATTOM report also found that 23.4 percent of all purchase loan originations in the third quarter involved co-borrowers — multiple, non-married borrowers listed on the mortgage or deed. That was up from 22.8 percent in the previous quarter and up from 21.1 percent in the third quarter of 2016.
Co-borrowing helps in markets where sizable down payments are needed to compete with other prospective buyers.