Homes continue to rise in value in most areas of the U.S. despite plunging sales activity. Across the nation, the median down payment for all buyers was 15%, according to the National Association of REALTORS® 2023 Profile of Home Buyers and Sellers. Down payment trends for first-time home buyers have been the highest since 1997, according to the NAR®. In 2023, the typical down payment for first-time home buyers was 8%, and repeat buyers averaged a 19% down payment (the highest since 2005). The competitiveness in the housing market, tied in with high interest rates and equity earned from selling a home, has been the most considerable influence on higher down payments over the past year. Repeat buyers have taken advantage of their equity gain by selling their previous home and using it to put down a larger down payment. First-time buyers tend to take longer to save up for a down payment because they have other priorities such as rent, other debts (ex., car loans, and student loans), childcare expenses, and others that eat up what could have been saved for a down payment.

Source: NAR®

According to Zillow, from 2019 to 2023, the median home price in the U.S. rose 40% year-over-year in the third quarter. Having to save up enough for a down payment has put many potential buyers on the sidelines, especially with rising home prices. Sellers tend to accept buyers who put down higher down payments because it allows them to portray themselves as less risky buyers and can also encourage lenders to remove some percentage points from your interest rate. Another incentive for paying a higher down payment is it will reduce your monthly payments for the life of the loan. Larger down payments also allow you to access more of your home’s equity sooner. Your home equity is calculated as the home value minus the amount you owe on your mortgage. Being able to put up a large down payment also allows the buyer to have lower upfront costs and avoid ongoing fees for “low- or no down payment” government-supported mortgages (ex, VA, FHA, USDA). For example, a VA loan requires most borrowers to pay a funding fee of between 1.25% and 2.15%, depending on how much you put in as a down payment.

According to’s data, Virginia Beach sat second amongst the top 10 metros in the nation, with the lowest average down payment at 8.7% in 2023. The median down payment in Virginia in 2023, according to’s data, is $29,088 and $100,800 in the District of Columbia.  This is the highest compared to the commonwealth’s bordering states.

There’s a myth that potential buyers must put in a 20% down payment for their mortgage, which isn’t necessarily true. Each mortgage program has the requirements needed to obtain a loan. According to the NAR Seller and Buyer report, most people continue to rely on saving some of their income for a down payment. The most common mortgage type for first-time home buyers in 2023 was FHA loans, which require a minimum of 3.5% on a down payment. Conventional mortgage financing was the most common amongst all buyers this year, and this has a 3% minimum down payment.

Many programs in Virginia offer grants and assistance to those trying to purchase a home within the state. You can always recommend a mortgage professional to your clients to find out which will work best. Keep up with our Virginia housing and economic data trends here.