One reason housing prices have soared over the past year is historically low interest rates that allow people to stretch their budgets for homes. Another is that middle-class and upper-class American incomes were little affected by the pandemic. In some cases, net worths have risen sharply because of the stock market and higher home equity. Also, many Americans have decided to relocate from the expensive coastal cities to cities that are more affordable and are perceived to have a better quality of living. This trend has been aided by the fact that millions of Americans can work from home, either all or part of their workdays.
Lending Tree looked at the cities with the highest down payments for homes. The title of the study is “Average Down Payments on Homes Across 50 Largest U.S. Metros Top $46,000.” The authors looked at the 50 largest U.S. cities based on population.
In addition to raw numbers for down payments, “Analysts also looked at how expensive down payments are relative to median annual household income in each of the 50 metros.” The primary conclusion of this part of the analysis is that in each market on average, down payments are 62% of the median household income for each city.
The most expensive housing markets in America are on the east and west coasts. According to Rocket Mortgage, the median home selling price in San Francisco is $1.3 million. This is followed by Manhattan at just shy of $1 million. In San Jose, it is also close to $1 million. Brooklyn and Los Angeles are high on the list as well.
The Lending Tree study shows that the city with the highest down payment is San Jose, at $115,138, followed by San Francisco and San Diego.
These are the 10 cities with the highest average down payments:
- San Jose: $115,138
- San Francisco: $103,016
- San Diego: $85,714
- Los Angeles: $83,987
- Seattle: $79,561
- New York: $62,436
- Boston: $60,692
- Washington, D.C.: $57,570
- Denver: $55,559
- Sacramento: $52,877