Which U.S. cities have the lowest down payment for a home?
Coming up with the down payment for a home can be a challenge for first-time homebuyers, but it's considerably easier for people who live in cities in the South or Midwest, according to a recent LendingTree study.
The average down payment in the nation's 50 largest metropolitan areas grew to $62,611 in September — that's up a whopping 35% from last year, the personal finance website found. Yet the bar is lower in a number of cities. In Oklahoma City, Oklahoma, for example, the typical down payment is $38,169, LendingTree said. In St. Louis, Missouri, it's around $40,113. And in Virginia Beach, Virginia, it's about $40,530.
Other cities around the country with lower-than-average down payment costs include:
- Louisville, Kentucky ($43,606)
- Memphis, Tennessee ($43,935)
- Cleveland, Ohio ($44,121)
- Cincinnati, Ohio ($44,574)
- New Orleans, Louisiana ($45,580)
- San Antonio, Texas ($46,000)
- Detroit, Michigan ($46,049)
Cities where houses can be purchased with a sub-$50,000 down payment include Birmingham, Alabama; Kansas City, Missouri; and Milwaukee, according to LendingTree.
"With home prices showing signs of finally coming down, down payments could also start to fall over the coming months," LendingTree Senior Economist Jacob Channel said in a report.
Not surprisingly, homes in pricey coastal cities typically require the heftiest down payments, especially in California. The top three cities ranked by down payment amounts are San Jose at $142,006; San Francisco at $131,631; and Los Angeles at $104,749, LendingTree said. The average down payment in Washington D.C., is $78,831 while in New York City it is $88,195.
Of course, even with enough money to put down, homebuyers face a tough market, with housing prices still high by historical standards and mortgage costs going through the roof.
The average interest rate on a typical 30-year mortgage surpassed 7% this week, the highest level since 2001. Some economists think mortgage rates will keep climbing, perhaps even hitting double digits next year, as the Federal Reserve continues lifting its benchmark interest rate in order to curb inflation.
