Homebuyers are putting less money down now, as bidding wars fade

Homebuyers aren't putting as much money down as they were at the height of the housing frenzy.

What's happening: The typical U.S. homebuyer made a down payment of $42,000 in January, the lowest number in almost two years, per a report out from Redfin Wednesday morning, provided exclusively to Axios.

The median downpayment is now 10% of the purchase price of the house, off its peak of 17.5%, (which amounted to $65,000), in May 2022.

State of play: High mortgage rates changed the calculus around down payments.

The rates crushed the market and drove a lot of people away, so there's less competition now. Buyers don't need to distinguish themselves from other bidders with big deposits.

Background: When a lot of buyers are vying for a home, a chunky down payment is a sign to the seller that you're a safe bet compared to someone putting less money down, who could be stretching to afford a house — a sign that their financing could fall through.