According to a report released this week by LendingTree, down payment percentages for 30-year fixed-rate purchase loans fell in the first quarter to a national average of 15.78 percent, down from just higher than 16 percent in the last quarter of 2013. LendingTree's CEO and founder, Doug Lebda, said the change reflects an industry-wide movement to adapt lending guidelines and improve accessibility for homebuyers as the market improves and refinances decline.
Out of the top states offering the lowest down payment percentages to borrowers, North Dakota reigned with an average of 12.3 percent. At the bottom of that top 10 range was Idaho at 13.8 percent. Meanwhile, the other end of the spectrum shows New Jersey, New York, California, Connecticut, and Hawaii, with down payments approaching 20 percent.
While states with higher down payments might be more prohibitive to potential homebuyers, a report released last month by LendingTree shows they also tend to rank highest in borrower health, while the opposite is true for states with lower percentages.
Despite soft housing news, mortgage rates experienced a moderate increase this week. In its weekly Primary Mortgage Market Survey, Freddie Mac recorded the average 30-year fixed rate at 4.33 percent, up six basis points from last week. The 15-year fixed rate also moved up, averaging 3.39 percent, while adjustable rates were unchanged for the week. With the Federal Open Market Committee set to convene next week to discuss the next round of tapering, commentators say further increases seem likely in the weeks ahead.