ATTOM Data Solutions’ Q3 2017 U.S. Residential Property Loan Origination Report, out Thursday, shows that the median down payment for single family homes and condos purchased with financing in the third quarter was $20,000, up from $18,161 in the previous quarter and up from $14,400 in Q3 2016 to a new high as far back as data is available, Q1 2000.
The loan origination report is derived from publicly recorded mortgages and deeds of trust collected by ATTOM Data Solutions in more than 1,700 counties accounting for more than 87% of the U.S. population. Counts and dollar volumes for the two most recent quarters are projected based on available data at the time of the report (see full methodology below).
The average down payment of $20,000 was 7.6% of the median sales price of $263,000 for financed home purchases in the third quarter, up from 7.1% in the previous quarter and up from 6.1% in Q3 2016 to the highest level since Q3 2013 — a four-year high.
“Buying a home has become a full-contact sport in many markets across the country, and buyers with the beefiest down payments — not to mention all-cash buyers — are often able to muscle out those with scrawnier savings,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “Despite the increasingly competitive nature of home buying, the number of residential property purchase loans nationwide increased to a 10-year high in the third quarter.”
Median down payment tops $50,000 in a dozen markets
The median down payment was more than $50,000 in 12 of the 99 metropolitan statistical areas analyzed in the report, led by San Jose California ($247,000); San Francisco, California ($170,000); Los Angeles, California ($118,000); Oxnard-Thousand Oaks-Ventura, California ($105,000); and Boulder, Colorado ($99,900).
“Across Southern California factors such as low available listing inventory have resulted in many consumers turning to cash or leveraging investment accounts for cash as alternative methods for funding home ownership and beating out competitors for acceptance of their purchase offers in a highly competitive market,” said Michael Mahon, president at First Team Real Estate, covering the Southern California market.
Other markets with median down payments above $50,000 were San Diego, California; New York, New York; Fort Collins, Colorado; Bridgeport, Connecticut; Boston, Massachusetts; Seattle, Washington; and Naples, Florida.
“Rising home prices in the Seattle area combined with changes in the mortgage underwriting process have pushed the median down payment over $50,000 and the average down payment to over $100,000,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “We’ve also seen an increase in new mortgages which is an indication of rising home sales. Most interesting to me is the big jump in new lines of credit which is likely a result of frustrated buyers deciding to stay in their existing homes and remodel rather than deal with the highly competitive Seattle housing market.”
Purchase and HELOC originations increase, refinance originations down
Nearly 2.4 million loans (2,386,518) secured by residential property (1 to 4 units) were originated in the third quarter, up 17% from the previous quarter but still down 5% from a year ago.
Of the total 2.4 million loan originations during the quarter, nearly 1.1 million were purchase loans (1,011,144), up 8% from the previous quarter and up 7% from a year ago to the highest level since Q3 2007 — a 10-year high.
A total of 981,773 refinance loans secured by residential property were originated in the third quarter, up 28% from the previous quarter but still down 19% from a year ago.
A total of 393,602 home equity lines of credit (HELOCs) secured by residential property were originated in the third quarter, up 19% from the previous quarter and up 12% from a year ago.
