Apr 24, 2024 - News

San Diego down payments are rising

Data: Redfin analysis of county records; Note: National data calculated from the 40 most populous U.S. metro areas; Chart: Axios Visuals

San Diego's median down payment reached $152,000 in February, up nearly 50% from just a year earlier, according to a new report from Redfin.

Why it matters: Homebuyers are having to reach deep into their pockets on the front end to soften the impact of steep mortgage rates on monthly payments, Redfin researchers say.

Zoom in: San Diego had the second-largest year-over-year increase of the 40 most populous metro areas.

  • The region's $152,000 median down payment works out to 20% of the typical purchase price in San Diego, tied for fourth-highest percentage increase among the metro areas studied.

Between the lines: Cash purchases, which are common among investors, made up just 21.7% of purchases in San Diego, third lowest among metro areas.

  • High-cost California markets made up the four markets where cash purchases were least common, with San Jose, Oakland and Los Angeles joining San Diego.

Yes, but: San Diego was among the markets last year with the largest increases in the share of homes bought by investors.

The big picture: The median U.S. down payment in February was 15% of the purchase price, up from 10% a year earlier, per the report.

  • Las Vegas was the only market in which down payments rose more in the past year than San Diego.

Reality check: First-time buyers are still struggling to get a foot in the door.

  • First-timers don't have equity from selling a home to boost their down payment, and they're often competing against cash buyers, according to Redfin.

Between the lines: Those who put at least 20% down can avoid the added cost of private mortgage insurance.

Go deeper: What people are sacrificing to afford housing

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