Special Report

10 Cities Where Home Buyers Make the Highest Downpayments

Samuel Stebbins

Published: February 1, 2023 11:39 am

During the COVID-19 pandemic, demand for single-family housing surged as supply constraints reduced inventory. These conditions not only sent home values soaring, but also gave mortgage lenders and sellers greater leverage in negotiating the terms of home sales. While in recent months these conditions have changed drastically, buyers in many markets are now also forced to put down more cash up front. 

According to realtor.com, a real estate data platform, the average down payment for a single family home hit 14% in 2022, up from 11% in 2019. Using the most recent national median home value as reported by the U.S. Census Bureau, this means the average down payment rose from about $31,000 to over $39,000 in the three-year period. (Here is a look at the states where home values increased the most during COVID.)

Historically, banks have required homebuyers to make a downpayment of at least 20% of the sale price. But in many U.S. metropolitan areas, average down payments are considerably higher than that. 

Using September 2022 home sale data, realtor.com compiled a list of cities where buyers need a large down payment. 24/7 Wall St. identified the 10 U.S. metro areas with the highest average down payments. Realtor.com considered the average down payment in America’s 300 largest metro areas, limiting the rankings to one per state to ensure geographic diversity. For each market we added relevant data from the U.S. Census Bureau’s 2021 American Community Survey.

High average down payments are indicative of tight housing markets in high demand areas, and, not surprisingly, many of the metro areas on this list also have higher than average home values. The median home purchase price on the places on this list ranges from $375,000 to $900,000, all well above the national median home value of $281,400. (Here is a look at the cities with the most expensive homes.)

Another common feature many of the housing market on this list share is that they are popular vacation and retirement destinations. Historically, down payment rates for second homes have been far higher than for primary residences. And places on this list, which include parts of Hawaii; Boulder, Colorado; and Cape Cod, Massachusetts, are popular spots for vacation homes.

Click here to see 10 cities where home buyers make the highest downpayments.

Click here to see our detailed methodology.

Source: Sean Pavone / iStock via Getty Images

10. Hilton Head, SC
> Avg. down payment: 23.7%
> Median home purchase price: $425,000
> Homeownership rate: 74.7%
> Median monthly housing costs: $1,599 (incl. mortgage payments)
> Typical home size: 6.5 rooms
> Overall cost of living: 2.0% less expensive than avg.

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Source: Sean Pavone / iStock via Getty Images

9. Santa Fe, NM
> Avg. down payment: 23.8%
> Median home purchase price: $510,000
> Homeownership rate: 74.4%
> Median monthly housing costs: $1,619 (incl. mortgage payments)
> Typical home size: 5.8 rooms
> Overall cost of living: 5.6% less expensive than avg.

24/7 Wall St.
Cities Where Home Values Went Up the Most Since 2000

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8. Bend, OR
> Avg. down payment: 23.9%
> Median home purchase price: $545,000
> Homeownership rate: 74.9%
> Median monthly housing costs: $1,843 (incl. mortgage payments)
> Typical home size: 5.9 rooms
> Overall cost of living: 2.2% more expensive than avg.

Source: Craig McCausland / iStock Unreleased via Getty Images

7. Boulder, CO
> Avg. down payment: 23.9%
> Median home purchase price: $683,150
> Homeownership rate: 61.7%
> Median monthly housing costs: $2,291 (incl. mortgage payments)
> Typical home size: 7.1 rooms
> Overall cost of living: 2.6% more expensive than avg.

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6. Maui, HI
> Avg. down payment: 24.0%
> Median home purchase price: $900,000
> Homeownership rate: 67.1%
> Median monthly housing costs: $2,464 (incl. mortgage payments)
> Typical home size: 5.3 rooms
> Overall cost of living: 9.0% more expensive than avg.

Source: Alexey_Fedoren / iStock via Getty Images

5. Salisbury, MD
> Avg. down payment: 24.0%
> Median home purchase price: $409,990
> Homeownership rate: 76.1%
> Median monthly housing costs: $1,483 (incl. mortgage payments)
> Typical home size: 6.8 rooms
> Overall cost of living: 7.8% less expensive than avg.

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4. Barnstable, MA
> Avg. down payment: 26.0%
> Median home purchase price: $624,000
> Homeownership rate: 82.3%
> Median monthly housing costs: $2,048 (incl. mortgage payments)
> Typical home size: 6.2 rooms
> Overall cost of living: 7.0% more expensive than avg.

Source: bpperry / iStock via Getty Images

3. Santa Barbara, CA
> Avg. down payment: 26.4%
> Median home purchase price: $800,000
> Homeownership rate: 51.9%
> Median monthly housing costs: $2,509 (incl. mortgage payments)
> Typical home size: 6.0 rooms
> Overall cost of living: 10.0% more expensive than avg.

Source: bpperry / iStock via Getty Images

2. Coeur d’Alene, ID
> Avg. down payment: 27.9%
> Median home purchase price: $530,000
> Homeownership rate: 73.7%
> Median monthly housing costs: $1,476 (incl. mortgage payments)
> Typical home size: 6.5 rooms
> Overall cost of living: 8.4% less expensive than avg.

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1. The Villages, FL
> Avg. down payment: 30.2%
> Median home purchase price: $375,000
> Homeownership rate: 89.1%
> Median monthly housing costs: $1,422 (incl. mortgage payments)
> Typical home size: 5.5 rooms
> Overall cost of living: 4.4% less expensive than avg.

Methodology

Using September 2022 home sale data, realtor.com compiled a list of cities where buyers need a large down payment. 24/7 Wall St. identified the 10 U.S. metro areas with the highest average down payments. Realtor.com considered the average down payment in America’s 300 largest metro areas, limiting the rankings to one per state to ensure geographic diversity. Metro areas are ranked by the average down payment percentage in Sept. 2022. Median home sale prices are also from realtor.com for the same period.

For each metro area on this list, we also considered the homeownership rate, median monthly housing costs for homeowners with a mortgage, and median home size by room count with data from the U.S. Census Bureau’s 2021 American Community Survey. 

Data on overall cost of living is from the Bureau of Economic Analysis and is for the year 2020.