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Average Down Payment on a House in California

  • The average down payment on a house in California has risen over the past year.
  • A minimum 3% down payment on a conventional loan would equal $25,000 in 2022.
  • A 12% D.P. (the average investment among buyers) would come to $100,069.
  • Putting 20% down on a median-priced home would equal $166,782.

What’s the average down payment for a house in California? This is one of the most common questions among home buyers in the Golden State, and rightfully so. When it comes to real estate costs, we live in the most expensive state in the country. So it’s only natural to wonder how much you’ll have to put down on a home purchase. Let’s explore!

Average Down Payment on a California Home

The highlight bullet points above show the average down payment on a home in California based on the current median home price. We’ve included three different investment thresholds, including the minimum down payment amount (3%) that’s required for a conventional home loan.

Let’s take a closer look at where these numbers came from, and what you can expect when buying a house in California during the latter part of 2022.

According to an August 2022 report from the California Association of REALTORS®, the statewide median home price was $833,910. We used that figure to determine what the average down payment might look like, at several different thresholds:

  • 3% (the minimum down payment for a standard conventional loan)
  • 12% (the average down payment among home buyers)*
  • 20% (the amount needed to avoid paying mortgage insurance)

* Based on the┬áNational Association of Realtor’s “Profile of Home Buyers and Sellers”

3% Down Would Equal a $25,000 Investment

For a conventional home loan that’s not backed by the government, the minimum down payment for most borrowers is 3%. Some borrowers might be required to put down more than that amount, depending on the loan size and other parameters. But for the most part, the minimum investment comes to 3% of the purchase price.

Applying that percentage to the current median home price in California ($833,910) would equal a down payment of around $25,000. So by that measurement, we might consider this to be the minimum down payment for a “typical” home purchase in California, as of summer 2022.

Of course, not all buyers will end up paying the statewide median price when buying a house. Those who live in the San Francisco Bay Area, for example, could end up paying a lot more than the $833,910 figure mentioned above. On the other end of the spectrum, home buyers in places like Fresno and San Bernardino could probably get by with a much smaller down payment.

Still, the $25,000 amount mentioned above gives us some sense of where the current minimum down payment threshold lies, using the median price point.

12% on a Median-Priced Home Would Come to $100,069

A couple of years ago, the National Association of Realtors conducted a survey that determined the average down payment among all buyers to be 12%. That includes both first-time and repeat buyers. So this is a good figure to use when measuring the average down payment for a California home purchase, across the board.

Making a 12% investment on a median-priced house in California (as of summer 2022) would equal a down payment of just over $100,000. That’s the closest we can get to determining an average for all buyers statewide.

Just remember that it’s possible to put less money down when buying a house. As we noted earlier, the minimum investment for a “standard” conventional loan can be as low as 3%. And the FHA program allows borrowers to put down as little as 3.5%. Eligible military members and veterans can use a VA loan to avoid the down payment altogether.

20% Down Would Bring the Investment Amount to $166,782

Lastly, let’s take a look at the average down payment for home buyers who choose to put 20% down. By investing this amount (or more) on a purchase, borrowers can avoid the extra cost of private mortgage insurance (PMI). That’s because PMI is usually required whenever the loan-to-value ratio rises above 80%.

Using the current statewide median home price of $833,910, a down payment of 20% would come to around $166,782. But again, a 20% investment is not always needed.

Using ‘Gift Money’ to Overcome Home-Buying Hurdles

Many home buyers in California are able to manage the monthly payments on a mortgage loan, but have trouble coming up with the down payment. In fact, this is the most common hurdle to homeownership.

For these borrowers, down payment gifts can be useful. This is when you receive money from an approved third party, such as a family member, to help cover the investment on a home purchase. It’s a great way to minimize your upfront costs when buying a house. And we’ve written a separate article on the subject, if you’d like to learn more about it.

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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