The housing market quietly changed — and buyers who gave up may want to look again

One small glimmer of hope for anyone hoping to buy a home soon: You might not need as much cash as you would have in years past.

Down payments hit their lowest level in five years in the first three months of 2026, according to a new report from Realtor.com. The amount of cash buyers need to put down to buy a home has dropped consistently over the last year, reaching a new low that’s 19% less than this time in 2025.

Dwindling down payments are a sign of a new phase in the U.S. housing market. In the heady housing scramble that kicked off with pandemic-era rate cuts, sky-high down payments became table stakes for making a strong offer. After a sharp uptick from 2020 to 2022, down payments continued to climb through the end of 2024, when they peaked at an average of $32,700 or 15% of a home’s selling price.

In early 2019, the average down payment was $12,500, which represented 10.7% of the average home price. By early last year, that percentage jumped up to 14% or $28,900—a huge increase considering that this number represents the cash in hand that you’d need to buy a house. This year, a buyer would need to put down 12.8% or $23,400, according to the new homebuying report. The downward trend means that competition for homes is easing a bit as inventory opens up and prices soften.

“Down payments are falling as the housing market slowly tilts toward buyers,” Hannah Jones, a senior economic research analyst at Realtor.com, said in the report. “High prices and borrowing costs continue to test affordability, and while conditions are improving, some of the buyers reentering the market are doing so via government-backed programs that have lower down-payment requirements.” Jones says that while the market is improving by some measures, many households may still find the path to owning a home challenging.

Parts of the country where home prices are cooling off show the biggest dip in the average down payment. The South and the West showed the biggest declines, with the Midwest staying steady and the Northeast still showing a spike in the amount of cash people need to put down to compete for a home.

Signs of a shift

There are a few signs in the housing market that things are finally getting a little easier for buyers. The average home buyer’s credit score started trending down last year, a sign that people previously priced out of the market are finding their way back in—and many of them had a little help. 

To get their foot in the door, more buyers are tapping government programs like Federal Housing Administration (FHA) and Veterans Affairs (VA) loans designed to ease the financial burden of buying a home. Over the last five quarters, FHA’s portion of purchase mortgages has remained above 24%, its longest stretch at such high levels in 10 years. VA loans accounted for 11.7% of mortgages in the first quarter of 2026, also a 10-year high. Both government-backed loans allow lower earners to make smaller down payments, easing the cash crunch that can prove to be insurmountable for many people trying to buy a home. 

“Government-backed programs are serving as a critical pressure valve, keeping the door to homeownership open for buyers who might otherwise be shut out entirely,” Jones said. “But the growing reliance on FHA and VA financing also reflects how much the conventional path to homeownership has narrowed for buyers without significant cash reserves.” 

Across the country, many homebuying markets are tipping back in favor of buyers. Last month, two-thirds of the biggest housing markets moved into more balanced or buyer-friendly territory. Only a quarter of the top metros in the U.S. qualified as seller’s markets, with a large ratio of home buyers competing for the same housing inventory. While that picture is still uneven from region to region, it’s just one more sign that things may start easing for potential homebuyers waiting in the wings.

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