A June 2018 report published by ATTOM Data Solutions showed the average down payment among home buyers in Seattle, Washington. Technically, it showed the median of midpoint, which is slightly different from an average figure. During the first quarter of 2018, buyers in Seattle made a median down payment of $59,800.
But don’t be discouraged by that figure. It’s possible to buy a house or condo with less of an upfront investment.
Median Down Payment Among Seattle Home Buyers
ATTOM Data Solutions (the Irvine, California-based company that owns RealtyTrac) recently published its “U.S. Residential Property Loan Origination Report” for the first quarter of 2018. This report offers a wealth of data that home buyers might find useful. Among other things, it revealed the average and median down payments among buyers in Seattle and other major cities across the U.S.
To quote the report:
“Other metro areas with median down payments of $50,000 or higher in the first quarter were Naples, Florida ($64,750); Seattle, Washington ($59,800); Boston, Massachusetts ($55,000); and New York-Newark-Jersey City ($50,000).”
Note: These were the median down payments for this reporting period. That means half of all home buyers using a mortgage put down more than that amount, while the other half made a smaller upfront investment.
Median and average down payments are directly related to home prices. So it’s natural to see a comparatively higher figure for the Seattle metro area, where house values are generally higher than the rest of the state.
As of June 2018, the median home price in the Seattle area was around $765,000. It’s much lower in most other major cities across the state.
Seattle also ranked high among major metro areas for the percentage of co-buyers who purchased a home (i.e., multiple, non-married buyers listed on the sales deed). According to the report, nearly 30% of all purchases during the first quarter were made by co-buyers. And they made an average down payment of $115,943 — significantly higher than individual buyers.
How to Minimize Your Upfront Investment
Home buyers who can’t afford these average or median down payment amounts should not despair. These figures might be useful for comparing housing costs from one area to the next. But they do not represent the minimum down payment required for different mortgage programs. Those minimums tend to be lower than the median.
- The FHA loan program allows eligible borrowers (with credit scores of 580 or higher) to make a down payment as low as 3.5% of the purchase price or appraised value.
- Similarly, some conventional home loans allow borrowers to put down as little as 3% when buying a house.
- And then there’s the VA program, which lets home buyers finance 100% of the purchase price.
There are also some common misconceptions regarding the 20% down payment. Surveys over the last couple of years have shown that many renters and prospective buyers believe they have to put down at least 20% to buy a home.
But, as we’ve just shown, that’s not always the case. There are many financing options available with a lower upfront investment for eligible borrowers.
The 20% figure usually relates to mortgage insurance. It’s true that a lot of home buyers choose to put down 20% or more, but they usually do it in order to avoid paying mortgage insurance. This insurance is typically required whenever the loan-to-value ratio rises above 80%.
Disclaimer: This article uses down payment data provided by third-party sources not associated with our company. We have presented it here as an educational service to our blog readers.