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Typical Down Payment in the Bay Area, Using 2022 Home Price Averages

What’s the average or typical down payment for a house in the San Francisco Bay Area, as of 2022? This is a common question among home buyers, given the pricey nature of our real estate market. So we thought it might be helpful to show what a typical down payment in the Bay Area might look like, based on 2022 home price data.

Typical Down Payment in the Bay Area, 2022

Home prices across the Bay Area have risen sharply over the past past 18 months or so. That’s largely due to an ongoing supply shortage that forces buyers to outbid one another. As a result, the average or typical down payment in the Bay Area is higher in 2022 than it was a year ago.

The amount you’re required to put down when buying a house can vary, based on several factors. It’s not a one-size-fits-all situation.

For instance, home buyers using the VA loan program can finance up to 100% of the purchase. Those using an FHA-insured mortgage have to put down at least 3.5%. Buyers who want to avoid paying mortgage insurance often make a down payment of 20% or more. And the minimum investment for a conventional home loan can be as low as 3%.

As you can see, there’s a pretty broad spectrum when it comes to the average / typical down payment in the Bay Area, for 2022. So we’ve simplified it for you below.

Here’s what a typical down payment might look like at several key thresholds, using the current median home price for the Bay Area ($1,374,739):

  • 3% down = $41,242
  • 3.5% down = $48,115
  • 6% down = $82,484
  • 10% down = $137,473
  • 20% down = $274,947
Note: These figures are based on the median home value for the San Francisco-Oakland-Hayward metro area, as of January 2022. According to Zillow, the median price was around $1,374,739 in January.

How We Came Up With These Figures

So where did these figures come from? Why did we include the percentages shown above?

  • The 3% down payment threshold was included because that’s the minimum investment for conventional loans acquired by Freddie Mac and Fannie Mae. Aside from using a specialized down payment assistance program, that’s about as low as you can go when using a “regular” mortgage loan.
  • The 3.5% down payment amount represents the minimum required investment for the Federal Housing Administration (FHA) home loan program. These mortgage products are insured by the government and require at least 3.5% down for a home purchase.
  • The 6% figure came from a National Association of REALTORS® survey. According to that survey, published a couple of years back, first-time home buyers typically made down payments of 6% when buying a house.
  • The 10% and 20% figures are based on common down-payment amounts. Many borrowers choose to put down at least 20% when buying a home in the Bay Area, because it allows them to avoid private mortgage insurance. The 10% investment is another common option, so we included that as well.

We then applied these percentages to the median home value for the San Fransisco Bay Area, based on data provided by Zillow in January 2022. As mentioned, the median price point was around $1,374,739 at the start of this year. These calculations give us some insight into the average investment among home buyers in the region.

Related: How much can I borrow for a house?

But it bears repeating: Down payments can vary due to a number of factors. The type of loan being used, the amount of money being borrowed, and the borrower’s credit history can all affect the minimum investment.

Low Down Payments Can Bring Mortgage Insurance

So, we’ve covered the typical down payment in the Bay Area, as of early 2022. We also talked about some of the ways a person could buy a home with less than 20% down. For many borrowers, it’s entirely possible to buy a house in the Bay Area with a down payment below 20%.

Just know that if you do opt for a smaller down payment, you might have to pay for mortgage insurance. This is true for FHA and conventional home loans like (but not the VA program).

On the conventional side, when an individual mortgage loan accounts for more than 80% of the home’s value, mortgage insurance is typically required. That’s just an industry standard. And nearly all home buyers who use the FHA loan program have to pay for mortgage insurance.

This added cost can usually be “rolled into” the loan, which means it will increase the size of your monthly payments. So it’s something you should consider when choosing your financing strategy.

Mortgage questions? Bridgepoint Funding is based in the Bay Area and offers a broad range of home loan options. Please contact us if you have financing-related questions or would like to apply for a loan.

Mike Trejo

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

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