Home buyers can afford big savings over the lifespan of their home loan by taking advantage of down payment assistance programs, according to a new report jointly published by RealtyTrac and Down Payment Resource.
On average, buyers who qualify for down payment assistance can save up to $17,766 over the life of their loan. That breaks down to an average of $5,965 on the down payment for a median priced property, as well as average savings of $11,801 on the monthly repayments over the loan’s lifetime.
“Saving for a down payment can be difficult for prospective first-time homebuyers given the absence of substantial wage growth in recent years combined with the burden of student loan debt many are struggling under,” Daren Blomquist, senior vice president at RealtyTrac, explained in a statement. “Even just a 3 percent down payment requires 14 percent of annual wages on average across the 513 counties we analyzed, and in 67 counties a 3 percent down payment requires more than one-fifth of annual wages.
The study highlights five markets where buyers who take advantage of down payment assistance can make the biggest savings:
- Kauai County, Hawaii ($80,148 total savings)
- Placer County, California, in the Sacramento metro area ($78,539)
- San Francisco County, California ($77,411)
- Orange County, California in the Los Angeles metro area ($74,268)
- Shasta County (Redding), California ($70,806)
Rob Chrane, CEO of Down Payment Resource, said the study shows that down payment assistance programs don’t just help buyers to overcome the initial cost of buying a home, but also benefit them in the long term too.
“In fact, these programs are now the last frontier in the fight to preserve home ownership affordability,” he said. “Rates are never going to be substantially lower, and home prices continue to trend higher.”