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M R EP O RT | 41 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Average Down Payments on Homes Rise Nationwide According to a new LendingTree study, the average down payment on homes across the 50 largest U.S. metros analyzed has now topped $62,000, an overall 35% increase compared to 2021. W hile the housing market begins to cool, home prices are still signifi- cantly higher in many parts of the U.S. than before the COVID-19 pandemic, according to a new study from LendingTree. One of the side effects of these higher home prices is higher down pay- ments. On average, Lending Tree found that homebuyers across the nation's 50 largest metros are put- ting tens of thousands of dollars toward their down payments. Even in areas where household incomes and loan amounts are relatively low, five-figure down payments are common. Key findings: A down payment on a home across the nation's 50 largest metros averaged $62,611. For comparison, that amount is 35.3% higher than when LendingTree last published this study in September 2021, when the average down payment across the nation's 50 largest metros was $46,283. While average down payments can vary significantly by location, no metro featured in our study's 2022 update has an average of less than $38,000. California is home to the three metros where down payments are highest—San Jose, San Francisco, and Los Angeles. The average down payment in San Jose is $142,006. In San Francisco and Los Angeles, those figures are $131,631 and $104,749, respectively. These are the only metros in our study where average down pay- ments top $100,000. Oklahoma City, St. Louis, and Virginia Beach, Virginia, are the metros with the lowest down payments. Down payments in these metros average $38,169, $40,113, and $40,530, respectively. Across the nation's 50 larg- est metros, the average down payment on a home equates to 58.3% of that area's average yearly household income. Down payments are the most affordable relative to income in St. Louis, Virginia Beach, and Hartford, Connecticut. Across the three metros, homebuyers put 43.5% of their area's average annual household income toward a down payment. Los Angeles, San Diego, and San Francisco are the metros where down payments are least affordable relative to income. Across the three metros, home- buyers put 83.4% of their area's average annual household income toward a down payment. What High Down Payments Can Mean for Homebuyers Higher down payments can se- verely impact would-be homebuy- ers depending on their situations. For example, those who already own a home may need to plan to stay longer than they'd like while they save enough cash for a down payment. Or, if they sell their current house and make a profit, they might have to allocate more of that profit toward the down payment on a new home than in the past. Similarly, those who don't own may need to rent for longer periods or resort to mov- ing in with family to save more money. High down payments aren't necessarily bad news for those with ample cash on hand. The more money a person can put down on a home, the more likely they will get approved for a mortgage and be offered a lower interest rate. As a result, a high down payment can provide more benefits than drawbacks in many instances for those who can afford it.