Down Payments Are Smaller Than They’ve Been Since 2021

Saving for a down payment is often on of the biggest hurdles for prospective homebuyers. With affordability continuing to be a consideration for many households, it's understandable if you've been wondering what it takes to purchase a home in today's market.

One trend worth noting is that many buyers are making purchases with smaller down payments than in recent years.

According to Realtor.com, the typical buyer put down about $23,400 in early 2026 – that's around $5,000 below what was typical the year before (a 19% drop year over year). That’s the lowest down payments have been since 2021 (see graph below):

Source: Realtor. com, Down Payments Fall in 2026 as Hosing Market Sags, May 2026.  (Data reflects national housing market trends reported by Realtor.com and may not represent conditions in every market or for every borrower). 

 So why are buyers putting less money down, and how could you potentially put less down, too? Here’s your answer. 

Why Down Payments Could Be Getting Smaller

There are a few things may be driving the trend:

• Less competition between buyers. Part of it comes down to a more balanced market. With buyers facing less competition than they did a few years ago, there may be less pressure to put a big sum down just to stand out.
• More moderate home prices. Your down payment is a percentage of the purchase price. So, as price growth cools, the amount you need to put down may change too. In a lot of markets, prices have slowed or leveled off, and some areas are even seeing slight dips. That can translate into smaller down payments.
• Buyers opting for loans with lower down payments. More buyers may also be turning to government-backed loans, like FHA and VA, which often need little or no money down. FHA loans have made up more than 24% of purchase mortgages for five straight quarters, and VA loans recently hit their highest share in over a decade, according to Mortgage Professional America.

So where does the rest come from? For many buyers, two things make the difference: programs built to help, and a hand from loved ones.

Help You May Not Know You Qualify For

Down payment assistance is one of the most overlooked tools out there. Looking at the 10 largest U.S. metros, Urban Institute and Down Payment Resource found nearly 44% of recent buyers already qualified for a down payment program, but many of them closed on their loan without tapping the help (see chart below):

Source: Down Payment Resource, Down Payment Assistance Continues to Expand in Q1 2026, April, 2026. (Eligibility for down payment assistance varies by program, income, location, property type, occupancy status, and other factors. Not all applicants will qualify).  

The options may be broader than you might assume, too. According to Down Payment Resource (Down payment assistance program availability, funding levels, income limits, property requirements, and other eligibility criteria vary by program and location): 

• There are more than 2,600 down payment assistance programs available
• More than half (62%) are designed to help first-time buyers
• 38% have no first-time buyer requirement, so you may qualify even if you've owned before
• 62% are open to buyers earning $100,000 or more

Family Gifts May Be an Option 

Depending on the loan program, gift funds from eligible family members may also be permitted to help with a down payment or certain closing costs. Documentation requirements and program guidelines apply, and not every loan program allows gift funds in the same way.

If family assistance is being considered, it's important to discuss the details with your lender early in the homebuying process.

Bottom Line

Today's housing market looks different than it did just a few years ago, and many buyers are purchasing homes with smaller down payments than in the past. Market conditions, financing options, and assistance programs continue to evolve, making it worthwhile to explore the possibilities that may be available.

If you're considering buying a home, connect with a First Federal Bank Loan Officer to help answer your questions, explain available loan programs, and help you understand your financing options based on your individual circumstances.