Real Estate Consulting & Sales | Residential + Commercial

Average Downpayments in Minnesota decline as market recovers

The following article and Infographic shows the average downpayment by geography.  According to LendingTree, the average down payment in Minnesota is about 14.5%, ranking us #20 in the U.S.   Although lenders continue to demand a high-level of due diligence on prospective lenders, they have loosened their belts from the over correction that occurred during the Great Recession.  The majority of transactions I’ve assisted on recently have averaged a downpayment between 5% and 10%.  Minnesota’s neighbor to the west; North Dakota – has the lowest downpayment average in the U.S.  This is in-part due the oil boom and the significant high wages buyers have in western and northwestern North Dakota.

LendingTree Average Down Payment Report:  US Average Down Payment Percentage Falls to 15.78% in Q1 2014

Mortgage lenders loosen standards as rates rise and the housing market improves

CHARLOTTE, N.C., April 23, 2014 /PRNewswire/ — According to a report released today by LendingTree, down payment percentages for 30-year fixed rate purchase mortgages declined in the first quarter to an average of 15.78%, down from 16.01% in Q4 2013. Additionally, average credit scores for borrowers matched with lenders on the LendingTree network have dropped 6% year over year, suggesting that lenders are more willing to consider a wider pool of borrowers.

“As the housing market improves and refinance activity declines, lenders are adapting their guidelines to improve credit accessibility for borrowers,” said Doug Lebda, LendingTree founder and CEO. “Relaxed lending guidelines translates to a larger pool of qualified homebuyers that could boost the housing recovery.  While lenders still need proof that a borrower has the financial ability to repay the loan, lenders have started to accept lower down payments and credit scores from potential borrowers.”

An infographic released by LendingTree ranks each state according to the average down payment percentages offered to LendingTree customers.  The top ten states with the lowest average down payment percentage for a 30-year fixed rate conventional loan are:

1.       North Dakota 12.31%
2.       Nebraska 12.50%
3.       West Virginia 12.50%
4.       Missouri 12.89%
5.       Alabama 12.89%
6.       New Mexico 12.89%
7.       Iowa 12.98%
8.       Arkansas 13.36%
9.       Kentucky 13.71%
10.     Idaho 13.81%

New Jersey (19.36%), New York (18.54%), California (18.21%), Connecticut (18.01%) and Hawaii (17.89%) top the list with the highest average down payment percentages.

Infographic link: