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Average Down Payments Decrease for First Quarter, Report Says

There could not be a better time to purchase a home, as lenders are loosening mortgage guidelines and the average down payment decreases. According to a report released today by LendingTree, an online loan marketplace, down payment percentages for conventional 30-year fixed rate purchase mortgages dropped from 17.59 percent in the fourth quarter of 2014 to an average of 16.98 percent for the first quarter of 2015.

The report also noted that the average down payment amount also decreased from last quarter from $47,585 to $44,007.

"As lenders need more mortgage volume, average down payments start to drop,” said Doug Lebda, founder and CEO of LendingTree. "More lenders are beginning to loosen their guidelines and are going after a slightly broader pool of potential borrowers. For first time homebuyers, this spring and summer homebuying season is proving itself to be an excellent time to enter the market.”

Although down payments have declined, the mortgage rate remains above 4 percent.

Last week, Freddie Mac released its Primary Mortgage Market Survey (PMMS), revealing that the average fixed mortgage rates averaged 4.02 percent for the week ending June 11, 2015. This was mostly due to the positive Bureau of Labor Statistics (BLS) employment data released last Monday. This was the first time the rate rose above 4 percent since November 2014.

"Mortgage rates rose above 4 percent for the first time since November 2014 as Treasury yields surged,” said Len Kiefer, deputy chief economist at Freddie Mac. “Markets are responding to strong employment data. In May, the U.S. economy added 280,000 jobs. Moreover, job openings surged to 5.4 million in April, up over 20 percent from a year ago."

The top five states with the lowest average down payment percentage for a 30-year fixed rate conventional loan are:

 

Rank State Avg Loan Amount Avg Down Payment Amt Down Payment %
1 KY $164,458.07 $33,391.04 14.02 Percent
2 AL $187,991.39 $33,057.76 14.26 Percent
3 WV $170,079.66 $32,084.75 14.53 Percent
4 ND $200,130.66 $29,355.19 14.68 Percent
5 NM $192,773.15 $29,744.21 14.82 Percent

The top five states with the highest down payment percentage for a 30-year fixed rate conventional loan are:

 Rank State Avg Loan Amount Avg Down Payment Amt Down Payment %
1 NJ $252,837.08 $57,259.93 18.96 Percent
2 DC $309,056.42 $89,915.80 19.03 Percent
3 CA $293,374.17 $67,998.60 19.58 Percent
4 NY $245,619.33 $75,150.33 20.02 Percent
5 HI $267,841.74 $59,029.82 20.36 Percent

Click here to view LendingTree's full report.

About Author: Xhevrije West

Xhevrije West is a writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University.
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