Rising Costs Prompt Rethink of 20% Down
Higher prices and mortgage rates have pushed down payments to record levels, sparking debate over whether preserving savings outweighs putting down more upfront.
NEW YORK — The long-standing advice that home buyers should wait until they can put 20% down is being reexamined as rising prices and higher mortgage rates push cash requirements to record levels.
The median down payment reached $30,400 in the third quarter of 2025, more than double its pre-pandemic level, contributing to a record-high median age of 40 for first-time buyers. Some housing experts argue that putting down less than 20% can be a safer option if it allows buyers to retain emergency savings.
"I once advised a couple, the Mendozas, to put down less than 20% because achieving that 20% would have completely drained their savings, leaving them no emergency fund," said Pavel Khaykin, who advised clients to accept private mortgage insurance in order to preserve cash reserves.
Others caution that lower down payments increase the risk of becoming underwater if prices fall. "Twenty percent down really should be the standard," Jeff Lichtenstein, broker at Echo Fine Properties said, citing price volatility and selling costs.
The differing views reflect how buyers are weighing cash reserves against upfront equity as prices and ownership costs remain volatile. Home buyers should put down as much of a downpayment as they can afford, while having money left over to cover repairs, ride out a bad income month without missing payments and to have a reserve fund.
Source: Realtor.com (12/17/25) Conte, Allaire
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