The typical US homebuyer can expect to make a 15% down payment on a home in 2025, virtually the same as the 15.1% down required in the past four years. But the dollar amount in 2025 ($62,468) is 1% less than last year's.
The number dropped even though home prices rose 1.4% year-over-year in April. However, the rate of growth is slowing – a factor that contributes to lower down payments, according to a new report from Redfin. The report is based on an analysis of county records from 40 of the most populous U.S. metros.
“Down payments are falling in dollar terms even though overall home prices are rising slightly because not all homebuyers make a down payment; nearly one-third of buyers pay in all cash,” the report stated.
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In addition, in a buyer’s market, sellers may be willing to accept lower down payments, despite the potentially higher risk of the deal falling through.
There are also other factors at work. Some buyers may have chosen less expensive homes to reduce the cost of a mortgage and protect their bank account during a time of economic insecurity, while others used VA and FHA loans that require lower down payments.
The number of buyers who used FHA mortgage loans rose from 14.2% in April 2024 to 15.3% -- one in seven -- in April 2025. Similarly, the share of mortgaged home sales using a VA loan rose from 6.4% to 7.2% in the same period – the highest level since 2020. In the current buyers’ market, the report said, these loans are more likely to be accepted than in more competitive markets where higher down payments are preferred.
Nevertheless, conventional loans continue to dominate, accounting for almost eight in 10 home loans in April.
Nationwide, the median downpayment is 15% -- $62,468. But in three cities in California, it is 25%: Anaheim ($290,000), San Francisco ($430,250) and San Jose ($465,250). In New York City, the median is 22% ($199,100).
A median down payment of 20% is the rule in several West Coast cities including Los Angeles, Oakland, Sacramento, San Diego, Seattle, and Portland, OR, as well as in East Coast cities like Ft. Lauderdale, West Palm Beach, Newark, Montgomery County, PA and New Brunswick, NJ.
Meanwhile, sellers can expect buyers, especially first-time buyers, to be particularly cautious as they decide whether to invest in the current environment. “Combine that with concerns about layoffs and a potential recession, and people are doing things like cross-comparing mortgage origination fees, shopping around for lenders, and looking into down payment assistance,” commented Fernanda Kriese, a Redfin agent in Las Vegas.
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