Think You Need to Save 20% for a Down Payment? Think Again

Saving for a down payment often represents the biggest hurdle for first-time home buyers. In December, 25% of buyers on® who were looking to purchase their first home said a key factor holding them back was lacking funds for a down payment. No matter how you cut it, it represents a big chunk of cash. But here’s the thing: It doesn’t always need to be quite so big as most think.

By guest blogger Jonathan Smoke

At the state level, Arizona sees down payments very close to the national average. The average down payment amount in Arizona was only $356 higher than the US average. The average down payment percentage was slightly higher for Arizona at 11.99% compared to 11.26% for the US.

As you would expect, markets across Arizona see quite a difference in down payment amounts due to differences in prices, the composition of buyers, and the type of loans used.

Yuma comes out as the most affordable and requiring the least amount of money to purchase a home on average. In 2016, the average down payment on homes purchases with a mortgage in Yuma was under $10,000. That’s because the market has the lowest prices for an MSA in Arizona as well as the lowest down payment percentage at 5.77%.

Yuma sees almost 80% of its mortgages backed by FHA, VA, and USDA.

Flagstaff and Prescott see the highest average down payment amounts as a result of Flagstaff having the highest average prices and Prescott seeing the highest average down payments.

Phoenix is inline with the state averages.

Table of 2016 Data:

Avg Financed Purch Price
Avg Down Pyt
Avg Down Pyt %
  Lake Havasu City-Kingman
  Sierra Vista-Douglas

Source:® analysis of purchase mortgages processed in 2016 on Optimal Blue, an enterprise lending platform.

Jonathan SmokeJonathan Smoke is the chief economist of®, where he analyzes real estate data and trends to develop market insights for the consumer. Follow him on Twitter at @SmokeonHousing

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