It’s widely known that California has some of the highest home prices of any state in the nation. Because of this, the average down payment in California is also much higher when compared to other states.
A recent report showed that the median or average down payment in some parts of California now exceeds $300,000, as of 2024.
Average Down Payment Among Buyers Declined in 2024
Housing data company ATTOM Data Solutions recently published a report showing the median down payment amounts. Specifically, their report ranked the 10 housing markets with the highest median down payment amounts in 2024.
Nationwide, the average down payment declined over the past year or so. That’s because home prices also declined during that period.
As you probably already know, home prices skyrocketed during the pandemic years, peaked during the summer of 2022, and then declined into the first part of 2023. So, overall, down payment amounts have also declined in California and elsewhere across the country.
Despite these home price declines (which now seem to be coming to an end), California housing markets still have fairly substantial down payments for the typical home buyer. The state is home to seven of the priciest housing markets, when measured by the median or average down payment size among borrowers.
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California Tops List of Markets with Biggest Down Payments
If you’re asking yourself the question, “What’s the average down payment on a house in California?” you may want to look at individual areas throughout the state.
Here are the 10 U.S. housing markets with the highest median down payment amount during the first quarter of 2024, based on the ATTOM Data Solutions analysis:
- San Jose-Sunnyvale-Santa Clara, CA ($360,000)
- San Francisco-Oakland-Hayward, CA ($239,750)
- Los Angeles-Long Beach-Anaheim, CA ($174,000)
- Boulder, CO ($171,135); Santa Rosa, CA ($154,875)
- Oxnard-Thousand Oaks-Ventura, CA ($147,000)
- San Diego-Carlsbad, CA ($146,000)
- Barnstable Town, MA ($130,000)
- Naples-Immokalee-Marco Island, FL ($130,000)
- Santa Maria-Santa Barbara, CA ($120,807)
In 2024, the San Jose metro area has the highest typical down payment size within the state of California, and also nationwide.
For those who don’t know, the San Jose metro area is home to some of the largest tech companies in the world. These include AMD, Cisco Systems, Intel, Apple, eBay and Google, to name but a few.
When people refer to “Silicon Valley,” they’re talking about Santa Clara County in particular. San Jose is the most populous city in Santa Clara County, with roughly 1 million residents as of 2024.
The current median home price within the county is around $1.4 million. That’s more than $1 million above the nationwide median price in the U.S. So it’s easy to see why the San Jose metro area has the highest average down payment in the nation. House values in the area far exceed national norms.
The San Francisco Bay Area and the Los Angeles metropolitan area rounded out the top three housing markets with the largest down payments in 2024.
The current median home value for the Bay Area region is around $1.1 million, while the Los Angeles-Long Beach-Anaheim metro currently has a middle price point nearing $900,000. Their median down payments in 2024 were $239,750 and $174,000, respectively.
Overcoming Hurdles to Homeownership
Do you want to buy a home, but can’t afford the average down payment on a house in California? You still have options!
Statistics like those shown above are often skewed by home buyers who make larger down payments, sometimes up to 20%. Some borrowers choose to invest 20% when buying a home because it allows them to avoid paying mortgage insurance.
But it’s possible to buy a home in California with a much smaller down payment—possibly as low as 3%. There are other things you can do, as well, to facilitate your purchase.
Here are 5 ways to reduce the down payment hurdle:
Go for the minimum
Conventional loans (that aren’t backed by the government) require a minimum down payment of 3%, while FHA loans require 3.5%. VA loans and USDA loans don’t require a down payment at all, though they are limited to a specific audience.
In an expensive real estate market like California, it’s much easier to come up with the minimum down payment for a particular loan program, rather than aiming for the 20% threshold mentioned above. So be sure to explore all of your financing options.
Use gift money
Many of the mortgage loan programs available to California home buyers allow for the use of gift money. This is when a third party like a family member contributes funds toward your down payment or closing costs.
Many home buyers rely on down payment gift money, because it helps to offset some of the upfront costs associated with a home purchase.
Look into down payment assistance programs.
Depending on your situation, you may be able to qualify for a down payment assistance program. In California, the MyHome Assistance Program is available from the California Housing Finance Agency.
This program provides eligible homebuyers in California with a deferred-payment second mortgage of up to 3.5% of the price of the home for the down payment, not exceeding $11,000.
This program must be used in conjunction with the California Housing Finance Agency 30-year, fixed-rate mortgage.
No matter what the current average down payment for a house in California may be, this down payment assistance program can help you top up your down payment on a home purchase.
To qualify for this program, you must meet the following eligibility requirements:
- Be a first-time homebuyer
- The home must be your primary residence
- Participate in a homebuyer education counseling course
- Have an income no higher than the MyHome income limits
- The purchase price of the home must be within the price limits in the respective county
Consider buying in a more affordable city
Your down payment requirements can be significantly reduced by simply purchasing a home in a more affordable area.
For instance, the average home price in San Diego is currently $960,202, while in nearby Chula Vista, the average home price is $812,571. That’s a difference of about $148,000.
Based on these prices, a 10% down payment on a home in San Diego would be around $96,200, while a 10% down payment on a home in Chula Vista would be about $81,300. That’s $15,000 less that you would have to come up with.
Southern California is certainly home to high housing prices. But the same is true in Northern California and everything in between.
As such, the average down payment on a house in southern California or other parts of the Golden State will be high. However, looking for a home just outside of more expensive centers can reduce your down payment amount and the overall mortgage you need to secure.
Start saving early
Are you planning to buy a house in California in the near future? If so, you’ll benefit from starting a home-buying fund. The sooner you start saving the better.
The down payment is only one of the upfront costs you could incur when buying a home. You’ll probably have to pay for closing costs as well, along with moving-related expenses.
The best way to save is by automating it. So see if your bank offers some kind of auto-transfer or auto-deposit program. Most of them do.
In 2024, the average down payment on house in California is the highest of all states. This in turn makes it harder to buy a home in the Golden State. But by exploring your options and saving early, you could achieve your dream of homeownership sooner rather than later.
Need a Mortgage?
Do you need mortgage financing? We can help. Sammamish Mortgage has been helping borrowers across the Pacific Northwest since 1992, including Washington State, Colorado, Idaho, and Oregon. We offer many different mortgage programs with flexible qualification requirements to suit the needs of each borrower, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Contact us today if you have questions about applying for a mortgage.