Redfin’s data indicates that median down payments among U.S. homebuyers rose 24.1% annually between February 2024 and February 2025 – representing the biggest annual percentage increase since April 2022.

Redfin’s analysis of county records across 40 of the most populous U.S. metropolitan areas from 2011 showed that last month’s typical down payment equaled 15% of purchase price – an increase from 10% in 2010.

“Homebuyers are making every effort to save up a sizeable down payment in order to lower their monthly payments in the future,” reported Rachel Riva of Redfin in Miami. The lowest down payment she had seen recently was 25%; one client put down 40%!

Home prices increased 6.6% year over year in February, which contributed to higher down payments; higher prices naturally translate to larger down payments as percentages of home values; however, elevated housing costs (due to both rising home prices and mortgage rates) also prompt buyers to take out larger down payments.

An increased down payment results in lower loan amounts and, therefore, monthly interest payments. For instance, when purchasing today’s median-priced U.S. home ($374,500), someone putting 15% down would have monthly payments of $2,836 at today’s 6.79% mortgage rate; someone paying 10% down with this same rate would face monthly payments of $2968 – that’s almost an extra $132 a month that adds up over time! Mortgage rates have seen some decrease from their October peak of roughly 8% but are more than double all-time lows hit during pandemic outbreak.

Over One Third of Home Purchases Are Made Using Cash – an Near Record Share

Over one third (34.5%) of U.S. home purchases made with all cash in February were completed without financing options, up from 33.4% in January and just shy of the decade high of 34.8% seen last November and closer than ever to 2013’s record high of 38%.

Redfin identifies an all-cash purchase as any home purchase made without mortgage information on the deed.

Some homebuyers opt for all-cash purchases due to rising mortgage interest rates; such buyers make no down payments at all and thus don’t incur monthly interest payments, but all-cash purchases remove that element entirely because no interest payments will ever need to be made by them.

Most buyers, however, cannot afford to make large down payments and all-cash offers in today’s market are often seen as preferential by sellers; first-time buyers in particular often face greater difficulty because they lack equity from prior home sales to bolster their down payments. Sellers also often prefer all-cash offers from investors – which accounted for almost one quarter of low-priced home purchases by investors in 2017, though overall they purchased far fewer properties during this time.

Redfin Economics Research Lead Chen Zhao reports: “High mortgage rates are widening the wealth gap among people of various races, generations and income levels,” according to Redfin’s Economic Analysis team. These rates compound with rising home prices during the pandemic crisis that have fuelled skyrocketing home prices; creating a situation in many locations where only wealthy Americans are able to purchase properties; while those priced out from homeownership miss out on an important opportunity that could potentially have lasting financial repercussions for their children and even their grandchildren’s children’s grandchildren if not captured early enough.

FHA Loans Are Growing More Popular Since Market is Less Contested

About one out of six (15.5%) mortgaged U.S. home sales used an FHA loan last month, up from 14.9% the prior year and just short of reaching its four-year peak of 16.3% reached in January. FHA loans have become more prevalent since the pandemic housing boom (when 12.1% were utilized). As today’s market is more stable and competitive.

One in 14 (7%) mortgaged home sales used a Veterans Affairs (VA) loan in February, down from 8% a year prior. Although typically stable over time, during the pandemic-influenced housing market it fluctuated more dramatically than usual.

Conventional loans were the predominant choice among mortgaged home sales in February, accounting for 77.5 % – slightly up from 77.1% last February – while jumbo loans, typically used by luxury buyers, made up 5.3% compared with 4.7% previously.

Metro areas that have seen significant increases/decreases in down payment amounts

Las Vegas saw the highest increase year over year based on Redfin’s analysis, with median down payments rising 60.9% year-over-year, followed by San Diego (49%), Charlotte, NC (47.4%), Virginia Beach VA 45% and Newark, NJ 32.2%) with only Milwaukee-13.9% and Pittsburgh (0.4% experiencing decreases.)

Metro areas with highest/lowest down payment percentages

Redfin found that in San Francisco, the median down payment equaled 25% of the purchase price–the highest among all the metros they analyzed. San Jose (24.9%) and Anaheim (21.9%) followed San Francisco; Fort Lauderdale, FL, Los Angeles, Miami, Montgomery County PA New Brunswick NJ New York Oakland Sacramento San Diego Seattle West Palm BeachFL were all metros with median down payments equaling 20% or higher of purchase price

Virginia Beach (1.8%) had one of the lowest down payment percentages among U.S. cities (1.8%) followed by Detroit (5%) Pittsburgh (5%) Baltimore (5%) and Philadelphia (7.3%).

Although the Bay Area boasts one of the highest home prices, its population includes many wealthy residents able to make large down payments. Virginia Beach stands out at the bottom as being home to a high concentration of veterans who utilize VA loans that require little or no down payment.

Where all-cash purchases are most/least prevalent

Jacksonville, FL led all metro areas Redfin analyzed with 54.4% of home purchases being made using cash – the highest share among them all. West Palm Beach (53.4%) followed closely behind with 53.4% paid cash followed by Cleveland (48%), Fort Lauderdale (46.2%) and Atlanta (46.1%). These metro areas are popular with investors who often purchase homes using this payment method.

All-cash purchases were the least prevalent in San Jose (18%), Oakland (21.6%), San Diego (21.7%), Los Angeles (23%), Providence, Rhode Island (23.3%).

Metro areas that had the biggest increases/decreases in all-cash purchases from 2009 through 2012

Atlanta led all other metros analyzed by Redfin with 46.1% of home purchases being completed with cash payments, an increase of 12.5 percentage points from one year earlier, marking it as the metro with the greatest increase. Jacksonville (8 percentage points), Oakland (6.2 points), Portland OR (5.7 points) and New Brunswick all experienced similar increases over that same timeframe.

Columbus, OH saw 28.5% of home purchases made using cash, down 6.1 percentage points from last year–the largest decrease among the metros Redfin examined. Cincinnati followed with (-4.4 ppts), Philadelphia with (-3 3 3 3), Chicago (3 3 3 3) and Phoenix with (2 8 2 8 2 8 2) also experiencing declines in cash transactions.