Down payments are getting smaller as buyers scoop up FHA, VA loans

As of April 2025, the typical U.S. homebuyer’s down payment was $62,468, down roughly 1% on a yearly basis and the first annual decline in nearly two years.

That’s according to a new report from Redfin that’s based on an analysis of records across 40 of the most populous U.S. metropolitan areas.

In percentage terms, Redfin reported that the average U.S. homebuyer puts down 15% of the purchase price, essentially unchanged from 15.1% a year earlier.

The median down payment has hovered around 15% since the COVID-19 pandemic, up from 10% in preceding years. Down payments last declined in the summer of 2023, driven by falling home sale prices.

While home prices are increasing today — rising 1.4% year over year in April — home-price growth has slowed and is contributing to lower down payments. At this time in 2024, prices were up about 4% year over year.

Cooling home-price appreciation has led to sellers outnumbering buyers and the market shifting in buyers’ favor, Redfin reported. The company said that many sellers are willing to negotiate with buyers, give concessions or accept lower down payments.

Redfin also reported that a slightly higher share of homebuyers are using Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans, another contributor to lower down payment amounts. Roughly one in seven (15.3%) mortgaged sales used an FHA loan in April 2025, up from 14.2% a year earlier.

By metro area, FHA loans were most prevalent in Riverside, California, where 26.7% of mortgaged home sales used one. Next came Las Vegas (26%) and Tampa (25.9%).

The share of mortgaged home sales using a VA loan was 7.2%. This marked the highest level for the month of April since 2020 and was up from 6.4% a year earlier. VA loans were most prevalent in areas with a large military presence, including Virginia Beach, Virginia (41.7%); Jacksonville (18.3%); and Washington, D.C. (16.5%).

Conventional loans continue to be the most common type of mortgage, with nearly eight in 10 (77.5%) home loans falling into the conventional bucket in April 2025.

Just under one in three (30.7%) home sales were all cash in April, down slightly from 31.6% a year earlier. All-cash home purchases were most prevalent in Cleveland and West Palm Beach, Florida, where roughly half of homes were bought in cash.