The median down payment on a home in the U.S. was $23,400 during the first quarter of 2026, the lowest level since 2021, according to a new report. This represents a 19% year-over-year drop, with down payments decreasing for the fourth consecutive quarter.
Down payments surged during the pandemic-era housing boom, reaching a record high of $32,700 in the second quarter of 2024. However, as the market has cooled, payment amounts have gradually eased, with inventory increasing and softening home prices reducing competition among buyers.
Active listings have grown on an annual basis for 28 consecutive months, and about 40% of potential sellers are expected to make concessions this year, up from 30% in 2025. This shift in the market has given buyers more leeway when deciding how much to put down.
Despite the decrease in down payments, affordability remains a concern, particularly for first-time buyers. The median renter has only about $2,600 in liquid assets, far short of the typical down payment amount. Only about 15% to 20% of renters have enough assets to cover a conventional median down payment of $23,400.
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According to the report, buying a home by age 30 is associated with a 22.5% higher net worth by midlife. However, the median age of first-time buyers rose to a record high of 40 in 2025, according to the outlet.
Hannah Jones, senior economic research analyst, noted that high prices and borrowing costs continue to test affordability, and while conditions are improving, some of the buyers re-entering the market are doing so via government-backed programs that have lower down payment requirements. This trend is reflected in the increased use of FHA and VA loans, which have been above 24% and 11.7%, respectively, in recent quarters.
FHA purchase loans have been elevated for the longest period since 2016, and VA loans have hit a more than 10-year high. In contrast, conforming loans have hit their lowest level since 2019. Jones said that while government-backed loans are keeping the door to homeownership open for some buyers, their increased frequency of use shows how much the conventional path to homeownership has narrowed for buyers without significant cash reserves.
Regionally, down payment amounts have decreased the most in the South, corresponding to cooling home prices in that part of the country. The average down payment dropped 1.2% year-over-year in the South, compared to 1.0% in the Northeast and 0.9% in the West. The Midwest was the only region where down payments remained relatively flat year over year.
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Regional Down Payment Trends
Down payments as a percentage of a home’s sale price remain highest in the Northeast, where home prices trend higher and inventory is more constrained. In that region, buyers put 17.3% down, compared to 15.2% in the West, 13.6% in the Midwest, and 11.1% in the South.
The pace of sales throughout the summer will provide more signals about what to expect during the latter part of the year. As the market continues to evolve, it is unclear if down payments will drop further or if seller concessions will continue to rise.
Government-Backed Loans on the Rise
- FHA purchase loans: above 24% for the last five quarters
- VA loans: 11.7% in early 2026, a more than 10-year high
- Conforming loans: lowest level since 2019
These trends suggest that while the market may be becoming more favorable to buyers, many are still struggling to make the math work and are turning to alternative financing options to buy a home.
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