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34 | TH E M R EP O RT 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 ORIGINATION THE LATEST Down Payment Costs on the Rise According to recent data, buyers will need an extra $7,000 to afford a down payment in 2018. A ccording to data released by Zillow last month, it is becoming more difficult for first- time home buyers to break into the housing market. According to Zillow's analysis, there is no better time than the present for potential homebuyers to start saving for a down payment, as home values in every major metropolitan area in the United States are expected to rise over the year. What this means for the average person looking to buy a home is that a 20 percent down payment will cost thousands of dollars more by 2018. According to Zillow, homes will increase by a median value of around $6,000, which translates to potential buyers need - ing to save roughly $100 extra per month. In hotter markets, Zillow calculates that number will go as high as roughly $36,000, which puts an even greater monthly bur - den on the buyer, as he or she will need to spend about $7,000 more on the down payment, which translates to needing to save ap - proximately $600 more per month. The increasing cost of homes provides a less-than-ideal situation for potential buyers. One of the routes most commonly used by buyers, especially in today's age of rising home prices, is putting a down payment of less than 20 percent on a home. According to the Zillow, 59 percent of first- time buyers go down this route. However, that method is not without its risks. Zillow's release also found that the lower a buyer goes on a down payment when making an offer, the less likely the buyer is to win. For buyers making a smaller offer on the down payment, the buyer is likely to have to make 2.4 offers before winning while buyers who make larger down payments will make 1.9 deals before they win. Making a lower down payment is a risky proposition for buyers looking to break into the housing market, but it is the more eco - nomical choice. A buyer might get rejected a few times before win- ning an offer on a lower down payment, but that same buyer might decide to save more money on the down payment for a year, only to find that the price of his or her desired home has moved out of their budget a year later. Markets Facing Luxury Price Increases High prices and low inventory challenges markets across the U.S., according to Redfin's latest Luxury Market Report. W hat's considered a luxury market? Redfin's analysis defines the luxury market as the top 5 percent most expensive homes sold in a city in each quarter—on average a $1 million home price or greater. In addition, the analysis tracks home sales in more than 1,000 cities across the country. "There is still strong buyer demand for high-end homes," said Nela Richardson, Chief Economist at Redfin. "Despite declining inven - tory, luxury sales soared in the third quarter. Sales of homes priced at or above $1 million were up 11 percent from a year ago, while sales of homes priced at or above $5 million were up almost as much at 10 percent." Luxury homes are also moving off the market faster, the report notes, with the typical luxury home finding a buyer in 70 days— four days sooner than last year. With high prices and a com - petitive market, homes for sale rates dropped. The data reports that the number of homes for sale in this market decreased 18.1 percent since last year. According to Redfin, this marks two consecutive quarters of a decline in the number of high-end homes for sale. Which cities experienced the highest home price increase across the nation? Redfin's findings report that Longmont, Colorado led the nation with the strongest year-over-year price growth in the luxury segment for Q 3 2017. On average, the price of a luxury property increased 34.7 percent— compared to last year—to $1.55 million. Following suit were Florida cities of Fort Lauderdale with a 28.7 percent increase in prices, and St. Petersburg with prices up 19.6 percent.