Homebuyers in areas with the lowest costs are making half the down payments as those in more expensive areas, according to new data from RealtyTrac.
In 25 counties with the lowest median home prices, the typical money put toward purchase added up to 12 percent of the price, or $8,239. Conversely, the counties that had the highest median prices saw down payments average 24 percent, or $138,547. ( Tweet This )
In a statement accompanying the release, RealtyTrac cited comments from industry professionals touting the benefits of affordability through lower down payments. However, the lack of "skin in the game," as it sometimes is called, was cited as one of the reasons for the housing collapse that began 10 years ago. Buyers at the lower end of credit standards often were able to purchase homes with little or no money down at teaser rates that spiked within a few years.
"After the Great Recession, the public is becoming more aware of the available lending opportunities in the market today. The pendulum has swung back to a strong lending environment," said Mike Pappas, CEO and president of the Keyes Company, a principal in the South Florida market, according to RealtyTrac. "Home affordability is still near an all-time high in our market—which makes it still a great buying opportunity."
Millennials, or those who reached adulthood around the turn of the century, are taking advantage of the low down payment opportunities, flocking to areas such as Montgomery County, Tennessee, where the average down payment is just 11 percent and which saw a 46 percent increase in millennials between 2007 and 2013.