Lower Down Payments: What It Means for Arizona Buyers in 2025
by Olga Boyke–Your Local Arizona Real Estate Partner
If you’ve been watching the market, you’ve probably noticed some shifts. One significant change is that national down payment amounts just dropped for the first time in almost two years.
That’s right. Even with home prices still climbing, buyers are finding ways to reduce what they pay upfront. Let’s unpack why that matters for you, especially here in Arizona.
Down Payment Totals Declined: The Context
According to recent Redfin data, the typical U.S. homebuyer’s down payment dropped to $62,468 in April, about 1 percent less than a year ago. While that might seem small, it marks the first time in nearly two years that we’ve seen a year-over-year decline. Even though that still represents about 15 percent of the purchase price, compared to pre-pandemic averages at 10 percent, what’s significant is the shift in buyer behavior.
Why Down Payments Are Shrinking
Shift to More Affordable Homes
Buyers are choosing properties with lower list prices. This allows them to keep more cash on hand, especially at a time when inflation, potential rate hikes, and broader economic uncertainty are making everyone think twice about big upfront costs.
Rise in FHA and VA Loans
More buyers are using loan programs that allow lower down payments. FHA loans now account for 15.3 percent of all mortgaged purchases, and VA loans are at 7.2 percent. Both of these options provide easier access to homeownership with less cash upfront.
Cash Buyers Still Strong, But Not Dominating
About 31 percent of purchases are still made in cash, which is nearly the same as last year. However, this trend is now giving mortgage-backed buyers more breathing room to enter the market with competitive offers.
What This Means for You in Arizona
For Buyers
You don’t need a massive lump sum to make your dream home a reality. Whether you're going with a conventional mortgage or considering FHA or VA options, you can still make strong offers that are well within reach. The key is working with the right lender and agent to structure your offer strategically.
In today’s Arizona market, flexibility works in your favor. With less competition and more listings available, sellers are open to negotiation. That includes closing costs and sometimes even the price.
For Sellers
It’s important to understand what buyers are facing. Many will be offering lower down payments, especially if they’re taking advantage of FHA or VA programs. That doesn’t mean they’re not serious or qualified.
If you want to attract a wide pool of buyers, pricing and presentation remain essential. A well-staged and well-priced home will stand out, regardless of the financing route your buyers choose.
Equity Building Starts Now, Even with Less Upfront
Low down payments don’t mean low opportunity. Every mortgage payment you make builds equity. In Arizona’s appreciating market, you can begin to grow your investment from day one.
If you’re not sure where to start, I’m here to walk you through the pros and cons of each financing option based on your goals.
Bottom Line: Be Strategic, Be Smart
The market may be shifting, but that creates opportunity for smart buyers and sellers. A little preparation goes a long way, and you don’t have to navigate it alone. Whether you’re looking to buy or sell, I’ll help you make decisions with confidence and clarity.
In today’s shifting market, understanding what’s happening behind the scenes, like changes in down payments, can give you the clarity you need to move forward with confidence.
Wondering if a lower down payment could open the door to your next home? Let’s talk. Whether you’re just exploring your options or ready to take that next step, I’m here to help you navigate your choices with clarity and confidence.
Reach out today and let’s see how we can make homeownership work for you, on your terms.
