With rising home prices showing no signs of slowing down, more homebuyers are asking family members for help to come up with a down payment. According to the National Association of Realtors’ 2019 Profile of Home Buyers and Sellers, 30 percent of first-time buyers used down payment help from family and friend.
Down payments are shrinking as a result of the affordability crunch. In 2019, the median down payment was 12 percent. First-time home buyers averaged down payments closer to 6 percent. Low down payment programs, like FHA loans are seeing an increase in the share of total home sold. According to the report, 17 percent of all buyers and 25 percent of first-time buyers utilized an FHA loan to purchase.
FHA loans, backed by the federal government, allow buyers to make a home purchase with as little as 3.5 percent down.
Meanwhile, conventional conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.375 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.