In Dallas, like so many other places across the country, buyers have understandably worried about rising home prices. For many local buyers, offering a down payment exacerbates this concern.
Unfortunately, the down payment dilemma appears to be worse in Dallas than in most other places in the United States. A new ranking from Realtor.com places Dallas 10th among US metropolitan areas with the highest average down payments for homes.
Realtor.com says the average down payment for a home in Dallas is 19.4%, with a median list price of $ 396,480 in September.
This equates to $ 76,917.12 that must be recovered and saved to buy a home.
“In competitive markets, having a large down payment can help your offer stand out. Salespeople like them because they’re more likely to close, ”says Danielle Hale, chief economist at Realtor.com. “That doesn’t mean everyone can do it. Typically, you see them among older homebuyers who have more equity from a previous home than they can use.
The influx of buyers from higher priced states like California, New York and Illinois is contributing to the increase in down payments in Dallas-Fort Worth, according to Realtor.com.
Because the Dallas home market is so competitive, sellers like to see larger down payments, DeLisa Rose, a real estate broker partner at eXp Realty in Dallas, told Realtor.com. Buyers also like to avoid paying for private mortgage insurance (PMI) by making down payments equal to at least 20 percent of the purchase price.
“The more a buyer poses, the stronger it appears on paper,” says Rose.
At # 1 is The Villages, a Florida retirement metropolitan area. Realtor.com has limited the list to one metropolitan area per state.
Among the 10 metropolitan areas with the lowest average down payments, the Texas town of McAllen ranks at No. 6. There, the average down payment is 6.4%, according to Realtor.com, and the median list price was $ 264,900 in September.