Realtor.com®: Down Payments Steady as Average FICO Scores Remain At 10-Year High
Realtor.com®: Down Payments Steady as Average FICO Scores Remain At 10-Year High |
| [20-October-2025] |
Continued high prices and mortgage rates in the third quarter of 2025 kept many homebuyers on the sidelines, while higher-income buyers continued to drive upper-tier sales AUSTIN, Texas, Oct. 20, 2025 /PRNewswire/ -- Down payments remained relatively flat in the third quarter, as the housing market continued to balance elevated costs with moderating demand. According to the latest Realtor.com® Down Payment Report, the typical down payment in Q3 2025 was $30,400 – about $500 higher than Q2 and roughly unchanged from a year earlier. The average down payment share remained near 14.4% of the purchase price. Historically, down payments pick up steam through the first half of the year, but 2025's gain was more modest. Between the first and third quarters, the typical down payment rose just 0.5 percentage points, or $1,500, compared with 0.8 points and $4,000 during the same period in 2024, reflecting a steadier market with stable prices and more measured buyer demand. "Down payments remain elevated but steady, reflecting the broader housing environment," said Danielle Hale, chief economist at Realtor.com®. "High prices and borrowing costs continue to test affordability, keeping many potential buyers on the sidelines and slowing overall sales activity. Even with mortgage rates easing into the low 6% range in recent months, the combination of high prices and limited inventory has left little relief for cost-sensitive home shoppers, while increasingly concentrating homebuying among higher-income households." Down Payments Remain Elevated Post-Pandemic Down payments climbed steeply between 2020 and 2022 amid more intense competition and record-low mortgage rates, then leveled off at about 14% to 15% of purchase price. While the market has cooled since then, elevated prices and financially strong buyers have kept typical down payments in the upper $20,000 to low $30,000 range.
Higher-Earning, Highly Qualified Buyers Still Dominate: FICO Scores Remain Near Decade High In fact, through the first seven months of 2025, sales of homes priced above $750,000 rose nearly 6% from a year ago, while lower-priced sales declined about 3%. That shift means expensive homes now account for a larger share of activity, while entry-level home sales continue to lag behind. Buyers of investment properties and second homes continue to make significantly larger down payments as well, averaging 26.7% and 26.9% of the purchase price, respectively, nearly twice the typical share for primary residences. In dollar terms, those down payments reached $84,200 for investment properties and $110,100 for second homes. Regional Differences Reflect Market Imbalance All four regions saw modest declines in down payment shares compared with a year earlier. The South and West dropped furthest, each down 0.6 percentage points, while the Northeast (-0.2 points) and Midwest (-0.1 point) posted smaller decreases. These patterns align with broader housing trends, from greater inventory recovery and softer demand in the South and West to tighter supply, years of underbuilding, and continued competition in the Northeast and Midwest. In dollar terms, the Northeast saw a median down payment of $62,900 (+5.6% year over year). The Midwest also saw a modest increase to $28,000 (+5.8%). Meanwhile, the West and South posted declines, with median down payments falling 5.6% to $51,000 and 4.4% to $22,800, respectively.
Compared to 2019, the Northeast has seen the largest jump in both down payment share and down payment dollar amount. In Q3 2019, the typical buyer in the region put down 12.3% of the purchase price—nearly six percentage points lower than in 2025. Over that same period, the median down payment has surged to nearly 2.5 times its 2019 level, underscoring how rising prices, fierce competition, and stronger buyer profiles are both drivers and symptoms of shifting market dynamics in one of the nation's most costly regions. "As mortgage rates edge lower, we expect more variety in who can buy, and that could bring back smaller down payments," said Hannah Jones, Senior Economic Research Analyst at Realtor.com®. "However, unless inventory grows meaningfully, renewed competition could put upward pressure on prices and down payments once again." Methodology About Realtor.com® Media contact: press@realtor.com
SOURCE Realtor.com | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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