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Arizona First Time Home Buyer Down Payment Assistance – First home buyers are bombarded with a lot of information and advice, and it can be difficult to separate fact from myth. One of the old home buying legends is about the 20% down payment. It is commonly known that you need a 20% down payment to purchase a home, but there are some loans that require as little as a 3% down payment. According to the National Association of REALTORS® (NAR), 35 percent of buyers believe they need to save 16 to 20 percent for a down payment, and 10 percent of buyers believe they need to save 20 percent or more. But do these beliefs match what first-time buyers actually set aside to purchase a home? The data shows the answer is no.
Rocket Mortgage® analyzed data from the 2021 U.S. Census American Housing Survey and found that the majority of first-time homebuyers in the United States are not in the bottom 20%, nor are they even in that bottom bracket. While 35% of buyers believe they need a down payment of between 16 and 20%, only 16% of first-time buyers actually make a down payment in this range. Meanwhile, nearly a quarter paid only 3 to 5 percent. So what’s the downside to how many first-time homebuyers in the U.S. actually have to make a down payment?
Arizona First Time Home Buyer Down Payment Assistance
Our analysis shows that the majority (73%) of first-time buyers have 15% or less invested. This data proves that purchasing a home with less than 20% down is very common and that a down payment should not get in the way of your dream of homeownership. The amount needed for a down payment will depend, among other things, on the type of mortgage you apply for.
Down Payment Assistance: How To Get Help Buying A Home
It’s amazing to see where first-time buyers pay a larger down payment and where they pay a smaller amount to purchase a home. In our analysis of the American Home Survey, we looked at the down payments of buyers in 15 metropolitan areas. We found that 44% of first-time homebuyers in the San Francisco metropolitan area saved between 16% and 20% on their home purchase. First-time buyers in other metropolitan areas, including Los Angeles (28%) and New York (29%), also decreased by 16% to 20%. These three metro areas are among the most expensive cities in the country, so down payments can be significant.
Let’s look at some examples from two metropolitan areas in California: San Francisco and Los Angeles. As of August 2023, the average home price in San Francisco was $1,152,191. If a first-time homebuyer in San Francisco paid 16% to 20% today, the amount would be between $184,351 and $230,438. The average home price in Los Angeles is $962,995. That means a first-time buyer paying a 16% to 20% down payment will now be looking at between $154,079 and $192,599. Although down payments of 16 to 20 percent have been a popular option in some metropolitan areas, buyers in most metro areas in our study typically put down 3 to 5 percent on their first home. Let’s take a look at what this looks like in some metropolitan areas, based on August 2023 median home prices.
When looking at down payments by homeowner age, we found that first-time homebuyers under 25 are almost twice as likely to purchase a home for less than other age groups.
Our analysis shows that nearly half of first-time homebuyers were age 45 or older. Of this group, 15% do not invest any money in their first property. Putting 0% down on a home is nothing new. In fact, our report shows that first-time buyers are taking advantage of the affordable options that have allowed them to enter the property market for 20 years. These options may include loans that do not require a down payment, such as VA and USDA loans. Rocket Mortgage® does not currently offer USDA loans.
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It’s important to note that older first-time buyers moved into their first home several years ago and may still be living in the same home. The year you first purchased your home can also affect your down payment.
We found that first-time buyers who moved in the early 2000s and are still living in the same home most often made a down payment of 6 to 10 percent. A quick look at the past decade has seen the most common range among first-time buyers increase from 3% to 5%. Fortunately, for today’s first-time homebuyers, there are more and more programs and resources available to help them enter the housing market. For example, first-time homebuyers can take advantage of down payment assistance and other homeownership programs that encourage low-down payment or no-down payment loans. When considering these programs, it is important for buyers to understand that not all lenders accept all programs. Talking to a home loan professional can help you determine which programs lenders will accept. Some lenders may have their own programs. Rocket Mortgage promotes homeownership through its ONE+ program. This program allows buyers to purchase a home with as little as 1% down. It also offers a 2% grant, potentially allowing buyers to start with 3% equity in their home.
A down payment should not be a barrier to homeownership. Not only can qualified buyers purchase a home with as little as 0% down, but they can also utilize government programs and first-time homebuyer lenders to provide a down payment. Regardless of age, location, or current real estate market conditions, first-time homebuyers have the resources to finance their dream home.
We analyzed data from the 2021 American Housing Survey to look at the typical down payment range for a first-time home buyer’s primary residence. All data were weighted using weights provided by the American Housing Survey.
The Power Is Now Hud Homes Magazine By The Power Is Now Media Inc.
Victoria Araj is a section editor at Rocket Mortgage, and she has been with the company for 15 years, holding roles in mortgage banking, public relations, and more. She earned her bachelor’s degree in journalism with a concentration in political science from Michigan State University and her master’s degree in public administration from the University of Michigan.
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What Is Down Payment Assistance And How Do I Find It?
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