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Down Payments Shrink Amid Home Price Recovery

Though rising mortgage rates may act as a weight on today's increased housing affordability, a report from ""LendingTree"":https://www.lendingtree.com/?theme=L3 shows down payment percentages continue to decline even as interest rates recover.

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According to LendingTree's study, average down payments for 30-year fixed-rate purchase mortgages have declined 9.4 percent since May 2011. As of May 31, 2013, the average down payment percentage across the nation was 16.1 percent, while the average national loan amount was $221,694.76.

""As the housing market begins to improve, lenders are beginning to loosen their guidelines to more normalized standards and approve loans with lower down payments,"" said Doug Lebda, founder and CEO of LendingTree. ""Although a good credit score is still important to have, borrowers may have an easier time qualifying for loans after years of tight guidelines, especially as home prices rise and we see fewer homeowners underwater.""

In terms of lowest down payment percentages, LendingTree's report has Mississippi at the top of the list with an average 11.9 percent down payment. West Virginia (12 percent), Alabama (12.4 percent), Kansas (12.7 percent), and Missouri (13.2 percent) complete the top five.

At the other end of the spectrum, Hawaii (18.2 percent), Massachusetts (18.3 percent), New York (19.0 percent), California (19.1 percent), and New Jersey (20.5 percent) have the highest average down payment percentages in the United States.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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