IRVINE, Calif. (6/5/15)--The average down payment on a single-family home dropped to 14.8% of the purchase price in the first quarter, RealtyTrac reported Thursday.
That marks a 0.4% decrease from the fourth quarter and a 0.7% drop on a year-over-year basis.
For Federal Housing Administration (FHA) purchase loans issued in the first quarter, the average down payment was 2.9% of the purchase price, while for conventional loans the average down payment was 18.4%.
In dollars, the average down payment was $57,710 in the first quarter, a slight increase from the previous quarter. The average down payment on an FHA purchase loan was $7,609 and the average down payment for a conventional loan backed by Fannie Mae and Freddie Mac was $72,590.
“Down-payment trends in the first quarter indicate that first-time homebuyers are finally starting to come out of the woodwork, albeit gradually,” said Daren Blomquist, RealtyTrac vice president. “New low-down payment loan programs recently introduced by Fannie Mae and Freddie Mac, along with the lower insurance premiums for FHA loans that took effect at the end of January, are helping, given that first-time homebuyers typically aren’t able to pony up large down payments.”
Blomquist added that less competition from institutional borrowers has helped first-time buyers as well.
The share of low-down payment loans, meanwhile, climbed to nearly a two-year high during the first quarter.
Low-down loan payments are typically 3% of the purchase price or lower.
Twenty-seven percent of all purchase loans in the first quarter were low-down payment loans, RealtyTrac found, up from 26% the prior quarter.
Further, 83% of all FHA purchase loans in the first quarter were low-down payment loans, while 11% of conventional loans came with low-down payments.