Down Payment Trends Tell of Competitive Market for South Florida Home Buyers

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Condominium towers in Downtown Miami.

J. Albert Diaz[/caption] Home buyer deposits are increasing — and some are reaching new highs — in the U.S. overall and in South Florida, indicating it's competitive to become a homeowner. South Floridians in the third quarter put down on average $71,261, or 19.8 percent of the average home price, as a down payment, according to ATTOM Data Solutions, an Irvine, California-based national property database. That's less than the average $75,650, or 20.5 percent, they ponied up in the previous quarter but still higher than the average $66,502, or 19.3 percent, they put down in the third quarter of 2016, according to ATTOM Data Solutions. "It's high," said Daren Blomquist, senior vice president of communications for ATTOM Data Solutions. "It's a reality for a lot of folks. It's a lot of money, and that's one of the biggest stumbling blocks for home buyers to get in the market, not just qualifying for the loan but that down payment amount to come up with up front is very tough to do for folks who are fairly fresh to the job market. A lot of the times they have student loans." The median deposits in South Florida follow a similar pattern as the averages. In the third quarter, South Floridians put down a median of $27,600, or 9.6 percent of the median home price. That's less than the $28,490 median, or 10 percent, they ponied up in the previous quarter but still higher than the $23,750 median, or 8.8 percent, they put down in the third quarter of 2016, according to ATTOM. South Florida seems to be more competitive than the nation as a whole. The South Florida median from July to September was higher than the $20,000 median seen nationally, which was the highest in the U.S. since 2000, according to ATTOM. "It's a sign that we are in an ultra-competitive housing market and continue to be. In order for buyers to compete in this market, they are having to pony up increasingly bigger down payments to be able to buy," Blomquist said. More telling than the dollar amount is that South Florida home buyers put down 9.6 percent of the median price, more than the 7.6 percent seen nationally, he added. One of the reasons down payments are rising might be because it's still a tight financing market so lenders are focused on borrowers who can put "skin in the game," Blomquist said. It's notable, however, that South Florida deposits decreased in the third quarter compared with the second quarter, contrary to the national trend. That might be because of increasing inventory, at least in the condominium market in parts of Miami-Dade, giving buyers a break on down payments. Midway through the year, 5,180 condos were finished and another 5,078 were under construction in the Arts + Entertainment District, Brickell, the Central Business District, Edgewater, Midtown and Wynwood, according to an Integra Realty Resources report for the Downtown Development Authority. Either way, all deposits remain high, Blomquist said. "Buying a house has become a full-contact sport and, if you are going to win that game, you need to up the ante to beat out other buyers," he said. The ATTOM data is based on public mortgages and deeds filed in the third quarter for single-family homes and condos bought with financing in 1,700 counties, which covers 87 percent of the U.S. population. The South Florida data is for Miami-Dade, Broward and Palm Beach counties.