According to a recent analysis, Portland, Oregon is among the ten U.S. metro areas with the highest average down payment from home buyers. The study was conducted by the research team at Realtor.com and found that the average down payment among Portland home buyers was 15%.
Report: Average Down Payment in Portland is 15%
The data team at Realtor.com analyzed mortgage lending records and other sources to figure out the average down payment on a house in the nation’s 50 largest metro areas.
Their analysis included borrowers who put down more than the average (perhaps to avoid mortgage insurance), as well as those who make smaller payments by using government programs like FHA. So it’s a pretty comprehensive review of mortgage trends by metro area.
Here’s a summary of their findings:
- Portland, Oregon ranked ninth among the 50 largest metro areas in the U.S., with an average down payment of 15% for home buyers.
- Portland wasn’t the only Pacific Northwest city to make an appearance in the top ten. Coming in at #10, Seattle made the list with an average down payment of 13.6%.
- Tech cities made a strong showing overall, with Seattle, Austin, Denver, and San Francisco all within the top ten.
- San Jose, California was ranked first, with buyers putting down an average of 23.9% on a house. San Francisco, Los Angeles, Boston, and San Diego rounded out the top five metros, in terms of the highest average down payment among home buyers.
Competition and demand within the housing market can influence the size of the average down payment. Generally speaking, home buyers in more competitive markets tend to make a larger upfront investment, in order to make their offers stand out. And Portland is a highly competitive real estate market right now, with strong demand from buyers.
A key distinction:
This study determined the average down payment when buying a house in Portland, Oregon as of 2018. But that doesn’t mean you have to invest that much when you buy a home. Averages and minimums are two different things. There are mortgage programs (and gift-money strategies) that could result in a much lower down payment. So let’s talk about those next.
Why It’s Possible to Put Down Less
Down payments are a major concern for home buyers — and understandably so. After all, we’re talking about an upfront investment that must be paid on or before closing.
But at the same time, there are a lot of myths and misconceptions about down payments in Portland. For instance, a consumer survey conducted in 2017 found that the vast majority of first-time buyers thought they had to make a down payment of 10% or more.
In truth, there are mortgage programs available today that allow for a down payment in the relatively low 3% – 3.5% range. And military folks can often qualify for 100% financing through the VA home loan program.
It’s also important to point out that many home buyers and borrowers in Portland are able to use money provided by someone else to cover their down payment. Most loan programs available these days allow for gift money to be provided by a third party, such as a relative.
So don’t be discouraged by the average down payment among Portland home buyers. You might qualify for a mortgage loan that requires a much smaller investment. And the money could come from someone else. So that hurdle might not be as high as you think.