U.S. Homebuyers’ Down Payments Shrink Amid FHA, VA Loan Growth

In April 2025, the typical U.S. homebuyer's down payment declined by 1% year-over-year to $62,468, marking the first annual decrease in nearly two years, despite home prices rising 1.4%. The down payment remains steady at about 15% of the purchase price, higher than the pre-pandemic 10% average, as buyers increasingly opt for less expensive homes amid slowing home-price growth and a cooling housing market. Redfin's analysis shows more buyers are using FHA and VA loans—15.3% and 7.2% of mortgaged sales respectively—both of which require lower down payments, contributing to the decline. Additionally, all-cash purchases accounted for about 31% of home sales, slightly down from the previous year, reflecting a shift from the peak cash-buying period when mortgage rates were near 8%. Regional disparities exist, with California metros like San Francisco and San Jose having the highest down payment percentages (around 25%), while areas such as Virginia Beach and Detroit have the lowest. The market's shift toward a buyer's market, with more inventory and sellers willing to negotiate, also supports these trends toward smaller down payments and more affordable financing options.