Rising home prices have made the traditional 20% down payment increasingly difficult for buyers, causing many to postpone their purchase decisions. However, alternatives exist, including government-backed no-down-payment loans for eligible buyers, though such programs have strict qualifications. As of Q3 2024, the average down payment stands at 14.5%, which is lower than the norm in the early 2000s. Particularly, aiming for a 20% down payment is still beneficial due to advantages such as reduced monthly payments, lower interest rates, and the elimination of private mortgage insurance costs.
After years of record-breaking home price appreciation, achieving a 20% down payment for a house has become increasingly difficult, prompting many buyers to wait for market stabilization.
While the 20% down payment is ideal, the average in Q3 2024 was just 14.5%. Lower down payments are possible, but come with drawbacks.
Government-backed, no-down-payment-required loans can aid uniquely qualified buyers, but eligibility for buyers and properties is limited.
A higher down payment can mean lower monthly payments, better interest rates, and the avoidance of private mortgage insurance costs.
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