Steep post-pandemic down payments and have made purchasing a home challenging for many prospective buyers. However, a new from Realtor.com has found homebuyers may be able to breathe a sigh of relief.
Median down payments dropped to their lowest level in four years, according to the report. At the same time, mortgage rates have fallen from a year ago and existing-home prices increased in the first quarter of the year.
Though housing market conditions remain far from ideal, Jake Krimmel, senior economist at Realtor.com, says the report’s findings should offer .
“With most local housing markets moving in a buyer-friendly direction, we are seeing more homes on the market, builders slashing prices and lower asking prices on existing homes than a year ago,” he says. “These are the important signs that buyers have been hoping would materialize: better market balance, falling prices and lower rates. If these trends hold up, we’ll see affordability continue to improve, even if it’s a slow journey, just bit by bit.”
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The Median Down Payment Hits Lowest Level Since 2021
In the first quarter of 2026, the median fell to $23,400, hitting its lowest level since 2021 and dropping from $28,900 a year ago. This represents a 19% drop year over year.
The report notes this reflects the broader housing market’s cooling prices and rising supply — “a combination that is giving buyers more negotiating room and reducing the pressure to lead with an outsized down payment,” the report says.
The South and West experienced the greatest year-over-year declines in down payment amounts. The median down payment in the South was $21,100 in the first quarter of 2026, compared with $23,700 the year before. In the West, it dropped from $53,400 to $43,700 early this year. The report notes that trend aligns with rising inventory and moderating prices in those areas.
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Government Loans Are Making Up a Greater Portion of Sales
The report also found that a substantial proportion of borrowers are taking advantage of government-backed mortgage programs, which may require a lower down payment than conventional conforming loans.
Loans backed by the Federal Housing Administration and the Department of Veterans Affairs now account for a third of purchase mortgages, according to the report. VA loans alone account for 11.7% of purchase mortgages in early 2026, their highest share in over a decade.
“Government-backed programs are serving as a critical pressure valve, keeping the door to homeownership open for buyers who might otherwise be shut out entirely,” says Hannah Jones, senior economic research analyst at Realtor.com, in a release. “But the growing reliance on FHA and VA financing also reflects how much the conventional path to homeownership has narrowed for buyers without significant cash reserves.”
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have a minimum down payment as low as 3.5%, and VA loans don’t have a minimum down payment requirement. Those who aren’t first-time borrowers typically need to put down 5% on a conventional conforming loan.
The fact that buyers are taking advantage of government-backed loan programs “tells us the market is broadening,” says Jones, “but the path to homeownership remains a difficult one for many households.”
Indeed, a in May found homebuyers are seeking out creative ways to make buying a home more accessible. Fifteen percent of respondents plan to split the cost of purchasing a home with a friend, while 12% will buy with a parent and 9% with a sibling. Meanwhile, 57% of prospective homebuyers reported taking on additional work to qualify for a larger mortgage or to cover a higher monthly payment.
While down payments increased in March and April, according to the report, it remains to be seen whether they will reach typical spring-season levels. Low-down-payment regions in the South and Midwest accounted for 71% of sales in 2025, and changes in those markets could affect national numbers. On top of that, buyers using low-down-payment government programs are most likely to exit the market if economic uncertainty continues to grow.
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