For $300,000, you could buy a home in Philly or make the typical down payment in San Jose

Homebuyers in California are shelling out over $100,000 more as a down payment than the typical Philadelphia buyer pays for their whole home.

December’s median down payment in the San Jose, Calif., area was $386,000, or 25% of the purchase price, according to a Redfin analysis of county data for 40 of the country’s most populous metropolitan areas. The median price of homes sold in the region that Redfin defines as Philadelphia and Delaware Counties was $280,000 at the end of last year, according to separate multiple listing service data.

In Philadelphia and Delaware Counties, the median down payment in December was 10% of the purchase price, or about $27,000 among homebuyers with a mortgage, according to Redfin’s county data.

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The typical U.S. homebuyer put down more than that — about 16% of a home’s price, or about $63,200, according to Redfin. That’s roughly $4,000 more than the previous year.

Homebuyers in the region that Redfin defined as Montgomery, Chester, and Bucks Counties put down a median of 20%, or $80,000 in December.

Down payments are up nationwide from a year ago because of rising home prices. Some buyers are putting down a relatively high percentage of the total home cost in an effort to lower mortgage interest payments.

Putting more money down typically makes homebuyers more attractive to lenders and is an especially tempting strategy for those who can afford the upfront cost as interest rates remain elevated compared with recent years. Buyers can qualify for lower rates and pay less money over the life of their mortgage.

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But saving up enough money for a down payment is a common challenge for first-time homebuyers, who don’t have profits from a home sale to put toward their purchase. High home prices, elevated interest rates, student loan debt, and, especially in Philadelphia, low wages, keep aspiring homeowners from being able to buy.

According to a National Association of Realtors report, most first-time home buyers — 69% — used their savings to purchase in 2024. A quarter of first-time buyers used loans or gifts from family or friends to make down payments, 21% used financial assets, and a record high of 7% used inheritances.

Local governments, nonprofits, and lenders offer down payment assistance to qualifying buyers, which can help fill financing gaps.

According to Redfin, the median U.S. down payment rose from around 10% to around 15% in 2021, when buyers put down more money to try to compete during cutthroat bidding wars.

But making a large down payment isn’t always the best thing to do. That’s especially true now that more markets across the country have started “tilting in buyers’ favor,” with home supply increasing and demand dropping, said Sheharyar Bokhari, a senior economist at Redfin.

“That means house hunters don’t necessarily need to break the bank for a huge down payment if it makes more financial sense to save some money for things like future home renovations or other investments,” Bokhari said in a statement.

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In the Philadelphia region and other major markets across the Northeast United States, however, limited supply and higher buyer demand mean sellers generally still have the upper hand.

In Redfin’s analysis, the typical homebuyer made the largest down payment as a percentage of the purchase price in the San Francisco area — about 26%. The smallest median percentage paid for a down payment was 3% in the Virginia Beach, Va., area. That region had the highest share of mortgaged home sales that used a loan through the U.S. Department of Veterans Affairs, which does not require down payments.