A Shifting Housing Market Drives Down Payments to Four-Year Low

The typical down payment fell to $23,400 in the first quarter of 2026, the lowest level since 2021, according to the latest Realtor.com® Down Payment Report. That represents a 19% decline year-over-year and the fourth consecutive quarterly drop, as rising inventory and moderating prices give buyers more negotiating room and reduce the pressure to lead with an outsized down payment. "Down payments are falling as the housing market slowly tilts toward buyers," said Hannah Jones, Senior Economic Research Analyst at Realtor.com®. "High prices and borrowing costs continue to test affordability, and while conditions are improving, some of the buyers re-entering the market are doing so via government-backed programs that have lower down payment requirements. That tells us the market is broadening, but the path to homeownership remains a difficult one for many households." Post-Pandemic Down Payment Highs Are RecedingDown payments climbed steeply between 2020 and 2022 as intense competition and rising house prices pushed buyers to put more cash forward to win deals, then held near record highs through 2024. That era is unwinding. Down payments peaked in Q2 2024 at $32,700 and 15.1%. They hit their Q1 high in 2025 and have eased lower since.  Primary Residence Avg Down Payment as % of Purchase Price Med. Down Payment ($ amt) 2019 Q1 2021 Q1 2025 Q1 2026 Q1 2019 Q1 2021 Q1 2025 Q1 2026 Q1 United States 10.7% 11.7% 14.0% 12.8% $12,500 $19,700 $28,900 $23,400 While today's levels remain above the Q1 2019 median of $12,500 and 10.7%, the gap is narrowing as inventory recovery and softening prices ease competitive pressure. The Realtor.com® Market Clock currently shows balanced or buyer-friendly conditions across much of the country, consistent with the directional shift in down payment data. The Realtor.com® April 2026 Housing Report found active listings rose year-over-year for the 28th consecutive month, while nearly 40% of potential sellers now expect to make concessions, up from 30% in 2025. The latest data offers a mixed early signal on whether that trend will continue. Down payments ticked up in March and April, as is seasonally typical, though April's reading of $25,000 and 13.2% remained well below year-ago levels of $27,500 and 13.8%. Whether the spring rebound sustains through summer will be a key signal of how durable the current softening trend is.  Buyer Pool Broadens, but Many Are Stretching to ParticipateAs affordability improves at the edges, more buyers who had been priced out are starting to re-engage. The typical buyer FICO score has trended downward since mid-2025, settling at 733 in early 2026, still above pre-pandemic norms but a meaningful directional shift. Many of these re-entering buyers are leaning on government-backed programs to make deals work: FHA's share of purchase mortgages has held above 24% for five consecutive quarters, it's the most sustained elevated stretch since 2016, while VA loans reached 11.7% in early 2026, their highest share in over a decade. Together, FHA and VA now account for more than a third of all purchase mortgages, as the share of conforming loans has fallen to its lowest level since 2019. "Government-backed programs are serving as a critical pressure valve, keeping the door to homeownership open for buyers who might otherwise be shut out entirely," said Jones. "But the growing reliance on FHA and VA financing also reflects how much the conventional path to homeownership has narrowed for buyers without significant cash reserves." The affordability constraints driving these trends have long-term implications beyond the transaction itself. Realtor.com®'s recent Homeownership and Generational Wealth report found that purchasing a home by age 30 is associated with 22.5% higher net worth by midlife, underscoring how delays in entry compound over time. That dynamic is further illustrated by renter balance sheets. The median renter holds an estimated $2,600 in liquid assets, rising only modestly to $2,900 even when directly held stocks, bonds, and IRA balances that could be used for down payments are included. Only about 15 to 20% of renters have sufficient assets to cover the $23,400 conventional median down payment, underscoring how significant a barrier entry remains for much of the would-be buyer pool. Median Down Payment Potential Among Renters By Asset Potential and Age Group · 2025 Q4 Dollars Age Group Liquid Assets Only + Stocks & Bonds + IRA All Renters $2,605 $2,787 $2,891 Under 45 $3,166 $3,925 $4,213 45–64 $1,570 $1,701 $1,818 65+ $2,224 $2,551 $2,617 Note: SCF 2022 asset values aged to 2025 Q4 using Federal Reserve Z.1 B.101h aggregate growth factors. IRA contribution capped at $10,000 (single) / $20,000 (married/partnered) per IRS first-time homebuyer exemption. Regional TrendsDown payment softening was most pronounced in markets where inventory has recovered most fully and where house prices have cooled most, with the South and West posting the largest declines. The South posted the largest year-over-year decline at 1.2 percentage points, while the Midwest was the only region to hold flat. With roughly 45% of all U.S. home transactions, the South's well-supplied, more affordable market carries outsized influence on the national average. The Northeast remains the most competitive market: buyers there still put down a median of $57,600, and the region has seen down payments climb 237% since 2019, significantly more than any other region. Avg Downpayment Pct Region 2019 Q1 2025 Q1 2026 Q1 YY Vs 2019 Midwest 10.0% 13.5% 13.6% 0.1 ppts +3.6 ppts Northeast 11.8% 18.3% 17.3% -1.0 ppts +5.5 ppts South 9.0% 12.3% 11.1% -1.2 ppts +2.1 ppts West 12.2% 16.1% 15.2% -0.9 ppts +3.0 ppts Methodology Down payment trends analyzed at the national- and state-level through April 2026 using Optimal Blue data. Down payment as a share of sale price is calculated as an average across the data. Down payment as a dollar amount is calculated by taking the median across the data. All comparisons are between the first quarter of the current and previous years unless otherwise stated.