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Boston down payments are among the most expensive in the United States according to a new report from Realtor.com.
The median down payment in the Boston metro was $110,700 in the third quarter of 2024, down a tenth of a percent year-on-year. The average down payment in the quarter was 20.9 percent of a home purchase, the same as in Los Angeles.
Additionally, four of the six New England states saw the largest down payment growth. This includes Connecticut which saw down payments jump from making up 16.6 percent of a home purchase in the third quarter of 2023 to 17.8 percent in the third quarter of 2024.
Interestingly, down payments nationwide actually eased. The annual decline of 0.26 percentage points in the third quarter was the largest annual decline in the average down payment as a share of purchase price since 2020 Q2. But the dollar amount only decreased by $100, which suggests homebuyers felt little relief.
“The annual decline in down payments is the result of less buyer competition in the third quarter. Easing demand and increasing inventory gave buyers more flexibility last quarter, which led to slightly lower down payments,” Hannah Jones, a senior economic research analyst at Realtor.com, said in a statement. “The recent drop in mortgage rates could pave the way for more competition in the coming months, especially if rates fall further, but we haven’t yet seen that reflected in home sales or down payment trends.”
Down payment percentage had increased nationwide beginning in the third quarter of 2021 with this year being the first year that it has begun to decline.
Still, the median U.S. sale amount, the typical down payment share of the purchase price, and the median down payment amount all reached record highs in June 2024 according to the report. These metrics have since dropped slightly, but remain near peak.
“It is too early to tell if this is the beginning of a lasting downward trend in down payments. While down payments have started to trend lower with lower demand, they remain historically high,” Jones said. “Easing mortgage rates may bring more buyers back into the market, potentially increasing competition – and down payments – once again if for-sale inventory fails to keep pace with demand.”
