Under the Biden-Harris administration, the required down payment for new home purchases has reached an all-time high, largely due to significantly increased interest rates driven by inflationary economic policies.

A recent report from real estate firm Redfin, dated August 28, reveals that the average down payment for U.S. homebuyers reached $67,500 in June, marking a 14.8% increase from $58,788 the previous year.

This trend of rising down payment costs has persisted over the past year, with June being the most recent month to reflect this pattern, as reported by The Epoch Times. The Biden-Harris administration’s policies have contributed to ongoing challenges in housing market affordability. According to the National Association of Realtors (NAR), the monthly payment required for a median-priced single-family home was $2,303 in June, nearly double the $1,206 needed in 2021.

Currently, monthly housing payments consume more than 25% of a person’s income. The required income for purchasing a median-priced home has surged from $57,888 when former President Donald Trump left office to $110,544.

Rising mortgage rates, which have escalated from 3.01% to 7%, have played a significant role in the increased cost of home loans. Although rates have decreased since peaking in late October, the average for a 30-year fixed mortgage was 6.35% as of the week ending August 29. It’s worth noting that during Biden-Harris and the two years of Democratic control of Congress, the Federal Reserve began raising rates to tackle escalating inflation.

Redfin claims that greater down payments are required for the higher-priced, turnkey homes in desired neighborhoods that are part of the present market. Turnkey homes have undergone extensive renovations and are immediately rentable by investors. The median home price in the U.S. has reached a record high of $442,525, pushing buyers to make larger down payments due to the rise in both mortgage rates and housing prices.

Annie Foushee, a Redfin agent in Denver, noted that investors are making cash offers on homes needing renovations, while traditional buyers are making substantial down payments to reduce their mortgage obligations, often with family assistance.

In June, homebuyers typically put down 18.6% of the purchase price, the highest percentage in over a decade. Nearly 60% of buyers made down payments exceeding 10% of the purchase price, according to The Epoch Times.

The proportion of all-cash home transactions rose to above 30% in June compared to the previous year. Sheharyar Bokhari, senior economist at Redfin, observed that the share of all-cash sales tends to mirror fluctuations in mortgage rates, decreasing when rates fall and increasing when rates rise.

Bokhari also suggested that with mortgage rates beginning to decrease from recent peaks, the prevalence of all-cash purchases might stabilize.  Out of all the US cities, Barnstable Town, Massachusetts, has the highest median down payment percentage. metro in the first quarter of this year, at 23.6%, according to real estate data source ATTOM. Other areas with high down payment requirements include San Francisco-Oakland-Hayward, California, and Naples-Immokalee-Marco Island, Florida. Additionally, regions such as Santa Rosa, California; Boulder, Colorado; Los Angeles-Long Beach-Anaheim, California; and Oxnard-Thousand Oaks-Ventura, California, also reported down payment percentages exceeding 20%.

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