How Much Do You Really Need for a Downpayment?

When someone is in the process of buying a home, how much money do they need to put up as a down payment? According to research from the National Association of REALTORS® consumers across all income brackets, education levels and ages believe that 20 percent of the cost of the home is needed for a down payment. However, this simply isn’t true. In fact, the average median down payment has been 5 percent for first-time buyers for decades.

This misconception is holding back many potential first-time buyers, who incorrectly believe they do not have enough cash on hand to purchase a home. Young, creditworthy buyers have several safe lending options available to them that require as little as 3 percent down. So potential buyers should review their finances and figure out how much they are comfortable using for a down payment - chances are there are financing options available.  

Story Springboard:

Check out NAR’s Housing Opportunities and Market Experience (HOME) Survey for data on consumers’ sentiments on and knowledge of the housing market. Review NAR’s 2015 Profile of Home Buyers and Sellers for information about how homebuyers finance their purchase. Speak with a REALTOR® in your community about how much their clients usually put down and what they would recommend to a first-time buyer.


2020 Census

The decennial census is important for all REALTORS® because completing the 2020 census means more resources for businesses and communities.


NAR continues to monitor and respond to concerns about COVID-19 (coronavirus) and its impact on the real estate industry and events.