05/20/2026
Down payments drop to 4-year low of $23K
Still, most renters lack the funds for a down payment, and more buyers are turning to government-backed loans, suggesting that affordability remains a problem.
Lillian Dickerson, Reporter, Real Estate News
Lillian Dickerson
May 19, 2026
4 mins
Key points:
The median down payment in the first quarter of the year was 19% lower compared to Q1 2025.
The decline coincides with the shift toward a buyers market, which has also led to a rise in seller concessions.
But many potential first-time buyers remain shut out, with the typical renter’s savings of just $2,600 falling well short of the median down payment amount.
The median down payment on a home in the U.S. was $23,400 during the first quarter of 2026 — the lowest level since 2021, according to a new report from Realtor.com.
It's the fourth consecutive quarterly drop in down payments, which have fallen 19% year-over-year as a cooler market has given buyers more leeway when deciding how much to put down.
Coming down from a 2024 peak
Down payments surged during the pandemic-era housing boom, and that trend continued through 2024 when the median down payment hit a record high of $32,700 in the second quarter, Realtor.com noted. Since then, payment amounts have gradually continued to ease as inventory has increased and softening home prices have reduced competition among buyers.
Active listings grew on an annual basis in April for the 28th month in a row, and about 40% of potential sellers are expected to make concessions this year, up from 30% in 2025, according to Realtor.com data.
Will the trend persist?
At this point, it's unclear if down payments will drop further or if seller concessions will continue to rise, Realtor.com said, noting that down payments increased slightly in March and April of this year. That's typical of the season, however, and still well below levels seen a year ago, according to the report.
The pace of sales throughout the summer will provide more signals about what to expect during the latter part of the year, the report suggested.
The savings vs. down payment gap
Even though down payments have been falling, that doesn't mean they're affordable for first-time buyers. The median renter has only about $2,600 in liquid assets (a figure that rises to just $2,900 when including stocks or retirement accounts), Realtor.com found — far short of a typical down payment amount.
Currently, only about 15% to 20% of renters have enough assets to cover a conventional median down payment of $23,400, delaying homeownership for many.
And that can have long-term consequences. Buying a home by age of 30 is associated with a 22.5% higher net worth by midlife, according to Realtor.com's 2026 Homeownership and Generational Wealth report — but NAR found that the median age of first-time buyers rose to a record high of 40 in 2025.
Finding ways to make it work
Even as the market has become more favorable to buyers, many are still struggling to make the math work and are turning to programs like FHA and VA loans to buy a home, Hannah Jones, senior economic research analyst at Realtor.com, said in the report.
"High prices and borrowing costs continue to test affordability, and while conditions are improving, some of the buyers re-entering the market are doing so via government-backed programs that have lower down payment requirements," Jones said. "That tells us the market is broadening, but the path to homeownership remains a difficult one for many households."
FHA purchase loans have been above 24% for the last five quarters — their longest elevated period since 2016 — and VA loans hit 11.7% in early 2026, a more than 10-year high. Meanwhile, conforming loans have hit their lowest level since 2019, according to the report.
While those government-backed loans are "keeping the door to homeownership open" for buyers who might otherwise be unable to buy a home, their increased frequency of use shows "how much the conventional path to homeownership has narrowed for buyers without significant cash reserves," Jones said.
Down payments softest in the South
On a regional basis, down payment amounts have decreased the most in the South, corresponding to cooling home prices in that part of the country.
The average down payment dropped 1.2% year-over-year in the South, 1.0% in the Northeast and 0.9% in the West. The Midwest was the only region where down payments remained relatively flat year over year.
Down payments as a percentage of a home's sale price remain highest in the Northeast, where home prices trend higher and inventory is more constrained. In that region, buyers put 17.3% down, compared to 15.2% in the West, 13.6% in the Midwest and 11.1% in the South.
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