Gathering the money for a down payment on a house is no small feat. A new survey reveals where most home buyers get the money, plus data on the average down payment on a house.

By Lauren Phillips
Updated: January 04, 2019

A down payment on a house may be the largest sum of money many people ever spend at one time. What that down payment looks like, though, can vary widely based on the location and price of the home.

Real estate site Zillow recently surveyed 3,000 home buyers across the country to work toward finding the average down payment on a house and, surprisingly, it’s lower than one may think. 20 percent of a home’s purchase price has long been considered the ideal down payment, as it can help homeowners get lower monthly mortgage payments and eliminate the need for private mortgage insurance, which adds to that mortgage payment.

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The new survey finds that less than half of home buyers put down 20 percent, though. Across the United States, 43.2 percent of home buyers make the typical down payment on a house of 20 percent.

While the majority are still reaching that down payment benchmark, more than half of home buyers are making larger monthly mortgage payments than they would have if they’d reached that 20 percent down payment. Zillow’s survey finds that 27.7 percent of homebuyers put down between 6 and 19 percent, while 24.2 percent made down payments of 5 percent or less.

Saving for that 20 percent down payment on a house can take much, much longer than it would take to save for a lower down payment—some lenders offer conventional loans with down payments as low as 3 percent—and have a higher mortgage payment. The median list price of homes in the U.S. is $276,000. A 20 percent down payment for that median house would be $55,200—no small sum, even without counting the hidden costs of homeownership. And, of course, more expensive homes (and those in costly metro areas) will have higher list prices and require higher down payments.

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How does the average homebuyer pay for a down payment on a house, then?

Data from the Zillow Group Consumer Housing Trends Report 2018 finds that 70 percent of buyers used at least some savings for their down payments. The money from the sale of a previous home also helped 39.1 percent of buyers fund a down payment—good news for anyone up- or down-sizing, but not so helpful for first-time home buyers. 30.1 percent of home buyers used a monetary gift from family or a friend to pay for a home, and 26.3 percent used income from investments or stocks. A loan from a family member or friend helped 26.4 percent of buyers, and 26.7 percent used their retirement savings.

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If that 20 percent down payment seems daunting, remember: According to this data, a good proportion of homebuyers don’t pay for a down payment on a house on their own. They rely on at least one funding source beyond their savings and income. Not having those sources—such as family or friends willing and able to offer financial gifts or loans—makes saving for a down payment more difficult, but not necessarily impossible, given time, dedication, and the right circumstances.

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