RealtyTrac says the emergence of first-time homebuyers might be the reason the average percentage of down payments used to purchase single-family homes, condos, and townhomes in the first quarter of 2015 was down almost a point, the lowest level in three years.
On average homebuyers put down 14.8 percent of their home’s purchase price compared to 15.2 percent in the fourth quarter of 2014 and 15.5 percent a year earlier. This was the lowest average percentage for a down payment since the first quarter of 2012.
Daren Blomquist, vice president at RealtyTrac, said, new low down payment loan programs recently introduced by Fannie Mae and Freddie Mac, along with the lower insurance premiums for FHA loans that took effect at the end of January are helping, given that first-time homebuyers typically aren’t able to pony up large down payments. Also helping tilt the balances toward first time homebuyers in the first quarter is less competition from the large institutional investors that have been buying up starter home inventory as rentals.”
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