In Dallas, as in so many other places around the country, buyers have understandably been fretting about the rising price of homes. For many local buyers, coming up with a down payment aggravates that concern.
Unfortunately, the down payment dilemma seems to be worse in Dallas than it is in most other spots around the U.S. A new ranking from Realtor.com puts Dallas at No. 10 among the U.S. metro areas with the highest average down payments for homes.
Realtor.com says the average down payment for a Dallas home is 19.4 percent, with a median list price of $396,480 as of September.
That amounts to $76,917.12 that must be scraped and saved to buy a house.
“In competitive markets, having a high down payment can help your offer stand out. Sellers like them because they’re more likely to go through to closing,” says Danielle Hale, chief economist at Realtor.com. “That doesn’t mean that everyone can do so. Generally, you see them among older homebuyers who have more equity from a previous home they can use.”
The influx of buyers from higher-priced states like California, New York, and Illinois is contributing to the higher down payments throughout Dallas-Fort Worth according to Realtor.com.
Since the Dallas home market is so competitive, sellers like to see larger down payments, DeLisa Rose, a real estate broker associate at eXp Realty in Dallas, tells Realtor.com. Buyers also like to avoid paying private mortgage insurance (PMI) by making down payments equaling at least 20 percent of the purchase price.
“The more a buyer puts down, the stronger they appear on paper,” Rose says.
At No. 1 is The Villages, a retirement-oriented metro area in Florida. Realtor.com limited the list to just one metro area per state.
Among the 10 metro areas with the lowest average down payments, the Texas town of McAllen lands at No. 6. There, the average down payment is 6.4 percent, Realtor.com says, and the median list price was $264,900 as of September.