U.S. Homebuyers Put Up Biggest Down Payments In 20 Years

Homebuyers, facing tightening credit standards and skyrocketing prices, are putting up the biggest down payments in at least two decades.

The median down payment for single-family homes and condos in the U.S. was $20,775 in the third quarter, the most in records going back to 2000, according to a report from Attom Data Solutions. That’s up 69% from $12,325 a year earlier, before record low mortgage rates kicked the housing boom into a higher gear.

Borrowers put up 6.6% of the median sale price of homes financed in the quarter, up from 4.7% a year earlier and the highest level since 2018. The median loan amount in the quarter of $275,500 was the highest since 2000, up 24% from the third quarter of last year.

”Down payments are rising at a time when lenders are tightening their guidelines,” said Todd Teta, chief product officer at ATTOM Data Solutions. “Lenders have grown more cautious in order to protect themselves from more delinquencies.”

Mortgage companies are raking in cash in the midst of the pandemic, earning hefty margins while consumers flood in to buy homes or refinance existing loans to take advantage of 30-year mortgage rates below 3%. It’s no wonder that lenders have gotten more picky than they have been in decades.

Lenders includingJPMorgan Chase & Co. have tightened terms for borrowers amid widespread worry about future economic growth. JPMorgan, for instance, told loan officers earlier this month that it would limit jumbo loans to 70% of the sale price for most co-ops and condominiums in Manhattan.

The typical borrower last quarter had a 786 credit score, the highest median score in quarterly figures dating to 1999, according to data maintained by theFederal Reserve Bank of New York.

The $1.05 trillion of home mortgages originated last quarter was the highest since 2003, New York Fed data show, when homeowners across the country were taking advantage of a previous historic refinancing boom.

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