April’s Median Down Payment Fell as Buyers Lean Toward Lower-Cost Homes
The median down payment made by U.S. homebuyers dropped slightly in April, marking the first year-over-year decline in nearly two years, according to a new report by real estate brokerage Redfin.
Based on an analysis of county records from 40 major metropolitan areas, Redfin found the typical down payment in April 2025 was $62,468—approximately 1% less than in April 2024. Despite the dip in dollar terms, the median down payment remained stable at 15% of the home’s purchase price, in line with the historical trend of the past four years.
The decline in down payments, even as home prices edge up, reflects a shifting dynamic in buyer behavior. Although the median home price rose 1.4% year over year in April, the slower pace of price growth—compared to the 4% increase at the same time in 2024—along with persistently high mortgage rates, is influencing buyers to seek lower-cost properties. Many prospective homeowners are prioritizing financial caution amid ongoing economic uncertainty and interest rates hovering near 7%.
Additionally, a growing number of buyers are opting for government-backed mortgages that require smaller down payments. Federal Housing Administration (FHA) loans accounted for 15.3% of all mortgage purchases in April, up from 14.2% a year earlier, while Veterans Affairs (VA) loans made up 7.2% of purchases, the highest share for April since 2020.
Roughly 30.7% of home purchases in April were made entirely in cash, a slight decrease from 31.6% a year ago. The share of cash buyers surged in 2023 when mortgage rates neared 8%, prompting those with the financial means to sidestep interest payments entirely. Although rates have eased slightly, the cash buyer segment remains historically elevated.
With home listings outpacing active demand, sellers are increasingly flexible on terms, including accepting lower down payments. In contrast to the highly competitive environment of 2021 and early 2022, buyers relying on FHA or VA loans now have greater leverage to make successful offers.
Conventional mortgages continue to dominate the market, representing 77.5% of all home loans issued in April.
