NEW ORLEANS – June 9, 2016 — RealtyTrac released a joint report with Down Payment Resource analyzing the impact of downpayment assistance on the cost of buying a home. The savings include not only the money granted toward a downpayment but also the savings over the life of the loan from lower monthly costs.
For the study, RealtyTrac looked at 513 U.S. counties and based savings on a median-priced home in each. It released the report during the National Association of Real Estate Editors 50th Annual Journalism Conference in New Orleans.
Across all 513 counties analyzed, buyers who used available downpayment assistance programs saved an average $17,766 over the life of a 30-year loan compared to buyers who do not use downpayment assistance.
In some Florida cities, the savings is even greater. In Broward County, for example, a downpayment-assistance buyer could save $61,883; in Seminole County $55,538; in Volusia County $50,296; and in Miami-Dade $39,285.
However, in Monroe County, RealtyTrac found that it would actually cost a buyer more to tap into a downpayment assistance program – a loss of $10,652 over the life of the loan.
RealtyTrac created an interactive map to show the potential savings in a number of selected Florida cities, which can be viewed online.
Nationwide, the total breaks down to an average savings of $5,965 on the downpayment for a median-priced home, and an average savings of $11,801 on monthly house payments over the life of the loan.
The report combined public record sales deed data for single-family homes and condos collected by RealtyTrac with average downpayment assistance data by Down Payment Resource and the latest average weekly wage data available by county from the Bureau of Labor Statistics.
"Saving for a downpayment 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," says Daren Blomquist, senior vice president at RealtyTrac. "Even just a 3 percent downpayment requires 14 percent of annual wages on average across the 513 counties we analyzed, and in 67 counties a 3 percent downpayment requires more than one-fifth of annual wages."
"These programs are now the last frontier in the fight to preserve homeownership affordability," says Rob Chrane, CEO at Down Payment Resource. "Rates are never going to be substantially lower, and home prices continue to trend higher."
© 2016 Florida Realtors®