These Are the Cities Where You Will and Won't Need to Make a Huge Down Payment

For those trying to squirrel away enough for a down payment while also paying rent, 25% instead of 15% can also mean the difference between locking in a mortgage or watching prices rise for another few years.

That is why many looking to own are increasingly moving away from the old 20% standard suggested by financial advisers and locking in a mortgage as soon as they have enough to start that conversation with an agent -- a report from the National Association of Realtors found that, in 2021, the median down payment was 12%.

A new report from Realtor.com looked at cities with the biggest and smallest down payment averages across the country. 

Some Are Putting Down 30% While Others Can Get A Mortgage With 4%

A Florida city developed specifically for those older than 55, The Villages took top spot but should not be used to draw conclusions about the rest of the country -- the 30.2% down payment average reflects the large number of new retirees who are buying with the proceeds from a house in another part of the country. 

The lower than the national average median sales price of $375,000 also makes it easier for those coming from high-end suburbs to put down a larger down payment.

"They sell houses up North that they've had for years," local real estate agent Geralyn Vilar told Realtor.com. "They take that equity and come down here, and they can buy outright."

In general, cities with high down payment averages are higher-end communities where many are buying secondary and vacation homes -- Coeur D'Alene in Idaho took second place with 27.9% (median sales price $530,000) while Santa Barbara in California took third with 26.4% (median sales price $800,000).

Other similarly touristic cities to make the list include Maui in Hawaii, Boulder in Colorado and South Carolina's Hilton Head.

How Far Away Do I Have To Move To Get That House?

Meanwhile, cities where buyers made the lowest down payments tend to be those with low property values across the South and the Rust Belt -- in North Carolina's Fayetteville, the average buyer put down only 4.3% of the price while the median home sold for $239,900 in September 2022.

In Louisiana's Monroe, the average down payment was 4.7% while the median home sold for $192,000. No other cities in the country passed below 5% as the third city on the list is Topeka, Kansas with a 7.1% down payment and $159,777 median home sales price.

In general, such low down payments do not indicate a healthy housing outlook -- buyers with a lower ability to pay are usually chosen when the housing market is stagnant and homes sit without a buyer.

At the same time, an initial purchase in an out-of-the-way location can significantly help those on the path to homeownership. According to Realtor.com, the numbers on the lowest down payment list are also influenced by various Veterans Affairs and U.S. Department of Agriculture programs that help some secure a mortgage with a single-digit or even 0% down payment.

"Sellers look at the smaller down payment as coming from a riskier buyer, with less certainty that the mortgage will be approved or close on time," Rob Chrane, the chief executive of mortgage assistance company DownPayment Resource, told Realtor.com. "It got really extreme before the market started cooling down."

SEE THE FULL LIST OF CITIES' DOWN PAYMENT REQUIREMENTS HERE.