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Nationwide, buyers are putting down more money to offset high mortgage rates. Two Florida cities, however, rank among the lowest for median down payments.

WASHINGTON – Homebuyers are putting down more money than ever to soften the blow of high mortgage rates, and in some cities, $400,000 down payments are now the norm.

The typical down payment for U.S. homebuyers hit a record $67,500 in June, nearly 15% higher than a year earlier, according to a new Redfin analysis. That jump significantly outpaced the rise in home prices, which went up 4% year over year.

In several California cities, buyers are putting down much more. San Jose ($451,500) and San Francisco ($441,500) had the highest median down payments in the country. Anaheim ($300,000) ranked third, and Oakland ($195,000) ranked sixth.

Down payments are also higher in percentage terms, reaching almost 19% of the purchase price in June. That's up from 15% a year ago and the highest level in over a decade, Redfin found.

Elevated mortgage rates are driving the trend. By putting down more money upfront, buyers can lower their monthly payments. At 6.92%, June's average mortgage rate was near a 20-year high, and the typical monthly mortgage payment was $2,785.

Rising home prices are another reason buyers are putting more money down. Part of that is because homeowners are sitting on more equity, so when they sell, they have more money for their next down payment, Redfin noted.

In some markets, investors continue to play a role in driving up prices, often making all-cash offers to avoid paying interest.

It's no coincidence that buyers in the Bay Area put down a bigger share of the purchase price, 26%, than those in every other metro — many are competing with wealthy residents and deep-pocketed investors.

"San Jose has a lot of overseas investors buying sight-unseen, and a lot of home flippers who are purchasing dilapidated homes, putting some lipstick on them, and selling them for a profit," Craig Pellegrini, a Redfin Premier real estate agent in San Jose, said in a recent report.

Source: https://www.floridarealtors.org 8/30//2024

The average rate on a 30-year mortgage fell to 6.47% from 6.73% last week. Costs on 15-year fixed-rate mortgages fell to 5.63% from 5.99% last week.

LOS ANGELES – The average rate on a 30-year mortgage fell this week to its lowest level in more than a year, a welcome affordability boost for prospective home shoppers and homeowners looking to refinance their home loan to a lower rate.

The rate fell to 6.47% from 6.73% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.96%.

This is the second straight weekly drop in the average rate. It’s now the lowest it’s been since mid-May last year, when it was 6.39%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, pulling the average rate down to 5.63% from 5.99% last week. A year ago, it averaged 6.34%, Freddie Mac said.

“The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move,” said Sam Khater, Freddie Mac’s chief economist. “Additionally, this drop in rates is already providing some existing homeowners the opportunity to refinance.”

After jumping to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has mostly hovered around 7% this year – more than double what it was just three years ago.

The elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have discouraged home shoppers, extending the nation’s housing slump into its third year.

Sales of previously occupied U.S. homes fell in June for the fourth month in a row. And sales of new single-family homes fell last month to the slowest annual pace since November.

Rates have mostly eased in recent weeks as signs of easing inflation and a cooling job market have raised expectations that the Federal Reserve will cut its benchmark interest rate next month.

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Source: https://www.floridarealtors.org 8/8//2024