Wait a second! Did I really mean to say that New York homebuyers face an average purchase price of $347,614?
No, you read it correctly the first time!
Incredibly, while the national average down payment for a new home is $31,723, in the New York/New Jersey marketplace the number soars to $347,614 representing 37% of the average purchase price of $935,000!
Further, in the top 25 US housing markets the average down payment was still a pricey $138,547 or 24% of the purchase price, a far cry from the 3% down loans offered by Fannie Mae and Freddie Mac!
Here’s the whole story from the New York Daily News…
It was too good to be true.
This was supposed to be the year of millennials and first-time homebuyers, thanks to new low-down-payment mortgage programs from lending giants Fannie Mae and Freddie Mac, but experts are now saying that those high-leverage deals won’t fly in high-priced markets such as New York.
Low down payment loans accounted for just 7% of all home purchases in the top 25 U.S. housing markets by price, including New York, in 2014, according to a new report. The average down payment for homes in those markets was $138,547, or 24% of the total purchase price.
That’s a much bigger piece of the pie than the 3% down payments that Fannie and Freddie are promising to back for qualified buyers.
“Homebuyers have a better shot at buying a home in low-priced markets, not just because of the lower price point but because average buyers are putting down just 12% in those markets, compared to 24% in high-priced markets,” said Daren Blomquist of RealtyTrac, the company that prepared the report. “The markets where millenials are moving have above-average down payment percentages, which will make it tough for millennial renters to convert to first-time homebuyers.”
The New York and New Jersey markets had the highest down payment rates in the country in 2014, the report shows. Buyers dropped an average $347,614 on a down payment for a home, or 37% on an average total home price of $935,000.
In Brooklyn, buyers paid $163,537, or 28%, on a total $580,000 purchase.
The national average for a down payment is $31,723, or just 14% of the total purchase price, by comparison.
The best bets for millennials looking to snag a home with a low down payment: Nashville, Philadelphia, Des Moines, Little Rock and Columbus, Ohio, the report shows.
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Michael Haltman, President of Hallmark Abstract Service, New York.
HAS is a provider of title insurance in New York State for residential and commercial real estate transactions.
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