Average Down Payments in Bay Area Cities, Updated for 2020

The average down payment on a house in the Bay Area has risen over the past year, due to rising home values. Below, we will take a look at the typical up-front investment among home buyers in several Bay Area cities, as of summer 2020.

Average Down Payments in Bay Area Cities

The first thing you should know, as a home buyer or mortgage shopper, is that a 20% down payment is not required in all lending scenarios.

We hear that figure used a lot (20%) for a specific reason. If you put down 20% or more on a home purchase, you can avoid paying for mortgage insurance. That’s why a lot of home buyers choose that option.

But an investment of 20% is not always required. In fact, the average or typical down payment in the Bay Area is quite a bit lower than that 20% threshold.

Research conducted by the National Association of REALTORS in 2019 found that first-time buyers who financed their homes typically made down payments of 6%. That means they financed 94% of the purchase, on average.

Repeat buyers, on the other hand, typically financed 84% of their homes while making a down payment of 16%.

The average down payment overall, for all buyers, was 12% of the purchase price.

To quote NAR’s 2019 report:

“In 2019, the median down payment was 12% for all buyers, 6% for first-time buyers, and 16% for repeat buyers. Lower down payments among home buyers are another result of rising home prices as buyers find it difficult to save for a down payment.”

To be clear, these average down payment amounts do not represent the minimum investment required under various mortgage programs.

Some home loans allow borrowers to put down as little as 3% of the purchase price. FHA loans only require 3.5% down. And the VA loan program, which is open to most military members in the Bay Area, allows borrowers to finance 100% of the purchase price.

In order to determine the average down payment in Bay Area cities, we will use two of the figures provided by the NAR. We’ll use the 6% average among first-time buyers, along with the 12% average among all buyers.

By applying those percentages to the median home prices for various cities, we can get a better sense of the average down payment across the Bay Area.

San Francisco

In terms of median home price, the city of San Francisco is one of the most expensive real estate markets in the broader Bay Area. According to Zillow, the median home price in San Francisco was around $1,447,191, as of August 2020.

That means first-time buyers in San Francisco tend to make an average down payment of around $86,831 (or 6% of the median price). Using the 12% figure for all buyers, a typical down payment in San Francisco would come to around $173,662.

That’s a pretty big chunk of change, and it shows why homeownership is out of reach for many San Francisco residents.

The good news is you don’t necessarily have to put down 12% — or even 6% — on a home purchase in the San Francisco area. These days, conventional mortgage loans allow for a down payment as low as 3% for eligible borrowers.

Home buyers can also use gift money provided by a third party to put toward their down payment and closing costs. So there are ways to overcome this perceived hurdle to homeownership.

Berkeley

Berkeley, California is another pricey real estate market that tends to squeeze out home buyers with modest incomes. As of late summer 2020, the median home price in Berkeley was around $1,345,975.

An average 12% down payment in this market would come to around $161,517. An upfront investment of 6%, which is more typical for first-time buyers in the Bay Area, would come to around $80,750 in Berkeley.

Concord

Compared to some of the other cities in the Bay Area, Concord is one of the more affordable housing markets. Currently, the median home price in Concorde is around $571,879.

That means an average down payment for this Bay Area city would come to around $68,625 for all home buyers, and $34,312 within the first-time buyer segment.

But again, it’s possible to put down less than these average amounts. So don’t let these figures scare you away from the housing market.

Oakland

The Oakland area has seen an influx of new residents over the past few years. This has increased demand for housing and pushed home prices north.

According to Zillow, the median home value in Oakland, California was around $801,072 during summer 2020. So an average down payment in Oakland (using the data points from above) would come to around $96,128 for all buyers, and $48,064 for first-time home buyers.

San Jose

Home prices in San Jose have skyrocketed over the last 10 years, despite a modest downturn that began in 2018. Today, the median home price in this housing market is around $1,073,255.

An average down payment for a typical home buyer in San Jose would come to $128,790, at the 12% investment level. First-time buyers making a typical or average down payment of 6% would have to pony up $64,395 in this market.

Walnut Creek

Bridgepoint Funding is based in Walnut Creek, California. Here’s a look at the average down payment in our own “backyard.”

As of August 2020, the median home value in Walnut Creek, California was around $879,209. Using that figure, an average down payment in this Bay Area city would come to around $105,505 (at the 12% level) and $52,752 (at the 6% investment level).

Buying a Home With Less

It bears repeating: the average down payment figures reported above are not the same as the minimum required investments for the different home loan programs.

It’s possible to make a smaller upfront investment when buying a home in the Bay Area. And for a lot of home buyers, that’s a top priority.

We’ve covered this topic elsewhere on the blog. Here are some articles you might want to peruse, particularly if you have limited funds saved for a home purchase.

• Conventional loan down-payment requirements
• Low down payment mortgage options
• FHA loans and the 3.5% investment rule

Have questions? Bridgepoint Funding offers a variety of mortgage products for home buyers and homeowners in California. Whether you’re looking for an FHA, VA or conventional loan, we can help. Please contact us if you have questions about down payments or other mortgage-related topics.