This Florida city ranks among top 10 in U.S. for smallest down payments on homes
All across the nation, many residents feel locked out of the housing market due to rising prices. But are some markets immensely better than others?
Housing website Realtor.com has tracked the top cities where homebuyers are making both the largest and the smallest down payments in the country.
To come up with the places with the highest and lowest down payments, experts looked into market data from financial technology firm Optimal Blue. They added that they looked at the average down payments as a percentage of the home sale price in the 150 largest metropolitan areas in the third quarter.
The company only used one metro area per state to ensure geographic diversity. Here's what Florida cities made the list and what to take from the study:
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What Florida residents are making the smallest down payments in the country?
Polk County's Lakeland nabbed the eighth spot on the list, with statistics such as:
Average down payment: 9.4%
Median down payment: $7,271
Median home list price: $358,793
In what U.S. city do residents make the lowest down payments on their homes?
The Texas town of Killeen grabbed the first spot. The city, about an hour north of Austin, is an Army town, home to Fort Cavazos, formerly called Fort Hood. It’s the largest military base in Texas with more than 53,000 soldiers and their families based here.
The study found that the:
Average down payment (percentage): 5.3%
Median down payment: $2,182
Median home list price: $325,000
"Many of the area’s buyers are either active service members or veterans and have access to popular VA loans that don’t require a down payment. Those loans pushed down the average down payment in the local housing market," officials explain.
Most of the homes for sale in Killeen are single-family houses, with buyers finding brick ranches for less than $200,000 and new construction for roughly $450,000.
Top 10 U.S. cities where homebuyers are making the lowest down payments on homes
Killeen, Texas
Fayetteville, North Carolina
Shreveport, Louisiana
Huntington, West Virginia
Augusta, Georgia
Mobile, Alabama
Virginia Beach, Virginia
Gulfport, Mississippi
Lakeland, Florida
Peoria, Illinois
In what U.S. city do residents make the largest down payments on their homes?
California's Santa Rosa residents make the largest down payments for housing in the country. Experts said that it was the most expensive metro on the list by a lot, adding that California housing markets would have taken six of the top 10 slots if they hadn’t limited the analysis to just one metro per state.
They found that:
Average down payment as a percentage of the home sale price: 25%
Median down payment: $147,550
Median home list price in September: $1,070,990
Many of the buyers in the area are nearing retirement or seeking a vacation home or they are relocating to the area and using the proceeds from the sale of their previous homes to fund their new purchases.
“Prices are expensive, but they’re not as expensive as many surrounding counties,” real estate broker associate Daphne Peterson of Keller Williams Realty said. “It is attracting a lot of people from higher-priced areas who may be cashing out the equity of their home and deciding to retire here.”
Did any Florida cities make the list for largest housing down payments in the country?
North Port, on the southwestern coast of Florida along the Gulf of Mexico, took home the second spot on Realtor.com's list. Like Santa Rosa, experts say the city popular with retirees and vacationers looking to pick up an extra home, which makes it competitive when there are only a limited number of homes available.
The statistics found in the study were:
Average down payment (percentage): 23.5%
Median down payment: $81,853
Median home list price: $525,000
Top ten U.S. cities where homebuyers are making the largest down payments
Santa Rosa, California
North Port, Florida
Fort Collins, Colorado
Asheville, North Carolina
Boston, Massachusetts
Myrtle Beach, South Carolina
Boise, Idaho
Portland, Maine
Salisbury, Maryland
New York City, New York
What do homebuyers need to know when purchasing a home?
Clare Trapasso, the author of the report and Realtor.com's executive news editor, wrote that a general rule of thumb is buyers should aim to kick in at least 20%, which ensures a lower interest rate each month.
That totals $85,900 on the median-priced home of $429,500, which is the median price is according to Realtor.com data from September.
However, it is noted in the report that it's hard for many Americans to afford that, especially with additional expenses of closing costs, movers and buying furniture.
“When prices are rising so much faster than incomes, it’s hard to save more” for a down payment," Sean Moss, executive vice president of product and operations at Down Payment Resource said. “The goal post is always moving.”
Have down payments on homes fallen or risen nationally?
There's some good news for buyers, experts say.
Down payments have fallen over the past year as the housing market has become less competitive. Buyers put an average of 13.8% of the sale price down in the third quarter of this year, down from 14.7% last year, according to a Realtor.com analysis of data from real estate data firm Optimal Blue.
This article originally appeared on Fort Myers News-Press: Lakeland, North Port Florida lowest, highest for house down payments
