Down Payments Are Smaller Than They’ve Been Since 2021
Saving enough for a down payment is often one of the biggest challenges buyers face. Many people assume they need a large amount of cash before they can even begin looking for a home.
The good news is that’s becoming less true.
Recent data shows that buyers are purchasing homes with smaller down payments than they were just a year ago. In fact, according to Realtor.com, the typical buyer put down about $23,400 during the first part of 2026. That’s roughly $5,000 less than the previous year and the lowest typical down payment since 2021. (see graph below):
So, what’s behind the shift?
Why Buyers Are Putting Less Money Down
There are a few things driving the trend:
- Less competition between buyers. Part of it comes down to a more balanced market. With buyers facing less competition than they did a few years ago, there’s less pressure to put a big sum down just to stand out.
- More moderate home prices. Your down payment is a percentage of the purchase price. So, as price growth cools, the amount you need to put down may change too. In a lot of markets, prices have slowed or leveled off, and some areas are even seeing slight dips. That can translate into smaller down payments.
- Buyers opting for loans with lower down payments. More buyers are also turning to government-backed loans, like FHA and VA, which often need little or no money down. FHA loans have made up more than 24% of purchase mortgages for five straight quarters, and VA loans recently hit their highest share in over a decade, according to Mortgage Professional America.
But even a smaller down payment is still a significant chunk of cash, and saving it can be hard. So where does the rest come from? For many buyers, two things make the difference: programs built to help, and a hand from loved ones.
Assistance Programs Could Help More Than You Realize
Down payment assistance is one of the most overlooked tools out there. Looking at the 10 largest U.S. metros, Urban Institute and Down Payment Resource found nearly 44% of recent buyers already qualified for a down payment program, but many of them closed on their loan without tapping the help (see chart below):
The options are broader than you might assume, too. According to Down Payment Resource:
- There are more than 2,600 down payment assistance programs available
- More than half (62%) are designed to help first-time buyers
- 38% have no first-time buyer requirement, so you may qualify even if you’ve owned before
- 62% are open to buyers earning $100,000 or more
Family Support Is Helping Many Buyers
Another reason more buyers are making the move is support from family members.
Research from Veterans United found that many parents have either already helped or plan to help their children purchase a home. That assistance often goes toward the down payment, closing costs, or helping strengthen the buyer’s financing.
As Chris Birk, VP of Mortgage Insight at Veterans United, explains:
“For many families, helping a child buy a home has become less of an optional gesture and more of a practical response to today’s affordability challenges.”
If financial help from family is available, it may allow you to purchase sooner than you expected.
Bottom Line
Buying a home doesn’t always require the large down payment many people expect.
With lower average down payments, financing options that require less upfront cash, and assistance programs that many buyers overlook, homeownership may be closer than you think.
If you’re thinking about buying in Texas, talking with a trusted local lender can help you understand which loan programs and assistance options fit your situation.
Vesta Schneider
Realtor®
Luxury Homes | Relocation | Investments
Keller Williams Realty McKinney
📞 302-530-7314
📧 vestaschneider@yahoo.com
