Throughout the pandemic, homebuyers upped their down payments and raced headfirst into home purchases, but two years later, high mortgage rates and economic uncertainty are causing many house hunters to rethink their housing budgets, Forbes reports. As an affordability crisis widens across the U.S. in the midst of a housing reset, buyers are lowering their down payments, but the typical homebuyers who took out a mortgage in July still put down an average of $62,500, up 13.6% from a year earlier.
Though the average July down payment is up on an annual basis, buyers are dishing out far less on home purchases than they were in May and June, when the average down payment peaked at a staggering $66,000.
Increased down payments and monthly mortgage payments near all-time highs made it more difficult for prospective buyers to afford homes. Higher monthly mortgage payments and the rising cost of other goods and services cut into buyers’ budgets, making it harder to come up with huge down payments. A slower housing market also means less competition for homes, which means buyers don’t necessarily need to offer large down payments to win a home.
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