M
ost homebuyers are unaware of the typical down payment required, a common misconception that can be attributed to a lack of guidance from real estate agents. According to National Association of Realtors (NAR) research, buyers often believe they need to put down more than they actually do. Despite signs of a shifting market in their favor, affordability remains a concern for many due to high home prices and mortgage rates.

    A median-income household would need an additional $17,000 per year to afford a typical home with a 20% down payment, as analyzed by Zillow. However, this large down payment is not the norm, with most buyers unaware of their options. NAR found that 97% of its members have worked with clients who sought home financing advice from family rather than their agent.

    As an agent, providing guidance on financing can build trust and offer value to clients. This includes correcting down payment assumptions and shedding light on loan types that require less upfront payment. The typical down payment size for first-time buyers has ranged from 6-9% since 2018, while repeat buyers tend to put down more, with a median of 23% last year.

    Most first-time buyers rely on savings (69%) or gifts/loans from family and friends (25%) to fund their down payments. A record high of 7% use inheritance, and 21% turn to other financial assets such as stocks, bonds, or cryptocurrency. Conventional loans are the most popular choice for both first-time and repeat buyers, with many using FHA loans that offer down payments as low as 3.5%. VA loans, which don't require down payments, are also used by around 10% of both groups.