Homebuyers are now making smaller down payments, signaling a shift toward purchasing less expensive homes with loans.
Key Findings
In April 2025, the typical down payment was $62,468, about 1% lower than a year ago.
Down payments accounted for 15% of the home price, slightly down from 15.1% last year.
Although down payments have dropped, they remain higher than pre-pandemic levels, which were around 10%.
What’s Driving the Drop?
Experts say buyers relying on financing are choosing more affordable homes. There is also an increase in the use of FHA and VA loans, which require smaller down payments.
Dana Anderson, a data journalist at Redfin, noted that economic worries like tariffs may be causing buyers to prioritize keeping more cash on hand. This cautious approach leads them to seek cheaper homes.
Additionally, many metro areas have shifted from a seller’s market to a more balanced one. With more homes available, sellers might accept lower down payments to close deals.
More Buyers Using FHA and VA Loans
FHA loans accounted for 15.3% of mortgage sales in April, up from 14.2% last year.
VA loans rose to 7.2% from 6.4% in the same period.
This trend indicates softening demand. During the pandemic boom, sellers often chose offers with higher down payments due to multiple bids.
Cash Offers Remain Common
Despite higher mortgage rates, all-cash offers remain strong. In April, 30.7% of home sales were all-cash deals, slightly down from 31.6% a year earlier.
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