A new report by LendingTree [1] finds that for the first time in a more than a year, the amount homebuyers are spending on down payments for their properties is on the rise.
According to a report [2] released Wednesday, down payment percentages for conventional 30-year fixed-rate mortgages rose a little more than 1.5 percentage points to an average of 17.28 percent from the first to the second quarter.
The average down payment amount also increased by nearly $3,000 in the second quarter to $37,576.
Doug Lebda, founder and CEO of LendingTree, said the upswing is welcome news after 18 months of lower down payment percentages.
"[A]ppreciating home prices and pent-up demand have brought borrowers back into the housing market with more funds available for a down payment," Lebda said.
The states with the lowest average down payment percentage for a 30-year fixed rate conventional loan primarily are in the Midwest and South. West Virginia tops the list of lowest down payments, where the average borrower put down about 14 percent—roughly $25,000—toward a down payment. Arkansas, Nebraska, and Mississippi had similar numbers.
News of the upswing coincides with a recent report [3] by Trulia [4] showing a nearly 8-percent rise in asking prices nationwide—more pronounced in the South—and a Wednesday report [5] by the Mortgage Bankers Association [6] showing that mortgage applications nationwide are down by a little more than 7 percent as of last week.
The states with the highest down payment percentages and amounts, unsurprisingly, are those with some of the highest real estate values—Hawaii, New Jersey, New York, California, and Connecticut—where borrowers put down between 18 and 21 percent on home purchases in the second quarter.
Lebda said that the competitive real estate environment in some of the more desirable markets may be forcing some homebuyers to put more money down in order to strengthen their offers.
"However, the slight uptick in down payments is a positive sign for the housing market as homeowners will realize lower monthly payments, quickly build equity, and reduce risk for lenders," he said.