Despite growing attention around all-cash transactions, most Americans — especially first-time buyers — continue to finance their home purchases, according to new data from the National Association of Realtors (NAR).
Among primary residence buyers, 74% financed their home purchase in 2024. That share jumps to 91% for first-time buyers, said Jessica Lautz, NAR’s deputy chief economist and vice president of research.
One of the most persistent misconceptions among aspiring homeowners is that a 20% down payment is required to buy a home.
NAR said the typical down payment for first-time buyers has remained between 6% and 9% since 2018. For repeat buyers, the figure was significantly higher last year at 23% — a reflection of rising home equity over time.
In contrast, repeat buyers put down just 13% in 2014, Lautz said.
Since NAR began collecting data in 1989, the median down payment for first-time buyers has never exceeded 10%.
“This critical knowledge informs the potential buyer on just how much to save and — just as importantly — how long that process may take,” Lautz said.
Financing options, misplaced guidance
Conventional loans remain the most common path to homeownership, but many first-time buyers also turn to government financing.
Nearly 29% of first-time buyers used Federal Housing Administration (FHA) loans, which require a minimum down payment of 3.5%. Another 9% used U.S. Department of Veterans Affairs (VA) loans, which do not require a down payment at all.
Lautz also emphasized the importance of getting accurate information.
“Unfortunately, 97% of NAR members surveyed worked with clients who consulted family members for advice instead of a real estate agent — even if the family member would not live in the home.”
She urged prospective buyers to seek professional help through mortgage brokers, housing counselors or tools like the Down Payment Resource website, which connects buyers to local and state assistance programs.
Where the money comes from
For nearly 70% of first-time buyers, their down payment came from personal savings. Another 25% relied on gifts from family or friends, which was down from a peak of 36% in 2010 when the federal government was offering a first-time homebuyer tax credit.
With the median age of a first-time buyer reaching a record high of 38, fewer people are seeking financial help from family.
“It could be uncomfortable to ask family for help in purchasing their first home,” Lautz said.
There’s also a growing trend of first-time buyers tapping into financial assets to fund their down payments. In 2024, 21% used resources such as stocks, retirement accounts or even cryptocurrency — a sharp increase from the 8% to 11% range seen between 1997 and 2002.
Inheritances are also playing a slightly larger role. Although still under 10%, the share of first-time buyers who used inherited money reached an all-time high of 7%.
As prospective buyers navigate an increasingly complex housing market, understanding realistic down payment expectations and available loan options remains crucial, Lautz said.
“Seeking the right source is better than relying on outdated information or, worse still, misinformation,” she added.
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