RealtyTrac released its latest down payment report this morning, which found that the average down payment dropped to a three-year low of 14.8% in the first quarter, down from 15.2% in the fourth quarter of 2014, and from 15.5% a year ago–and that’s potentially great news.
The average was notably affected by FHA loans, where down payments averaged just 2.9%, compared with 18.4% for the rest of the mortgage universe. And as the quarter went on, the share of FHA loans kept growing–from 21% in January to 22% in February to 25% in March.
Could this mean first-timers are finally stepping off the sidelines?
“Down payment trends in the first quarter indicate that first time homebuyers are finally starting to come out of the woodwork, albeit it gradually,” said Daren Blomquist, vice president at RealtyTrac. “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.”
You can check out this video clip which summarizes the findings
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”