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The average down payment for the typical US home is now over $127,750: Zillow

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2 years ago

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The average down payment is closer to 35% now, instead of the typical 20%.  (iStock )

Every aspect of homebuying has gotten more expensive in the years since the COVID-19 pandemic. Home prices have been hitting new record highs for most months and mortgage rates are still hovering in the high 6% range. All these factors have added up to pricey down payments. The average down payment needed needed for a median-income family to afford a typical home reached $127,750, according to Zillow.

Instead of the typical 20% suggested by many lenders for conventional mortgages, prospective buyers are now saddled with a 35.4% down payment in order to make an average home affordable. This down payment is necessary for homes valued at about $360,000.

The down payment needed in today’s housing market is in stark contrast to five years ago when buyers could put down nothing and still be able to afford a median-priced home.

“Saving enough is a tall task without outside help — a gift from family or perhaps a stock windfall,” Zillow Chief Economist Skylar Olsen said. “To make the finances work, some folks are making a big move across the country, co-buying or buying a home with an extra room to rent out. Down payment assistance is another great resource that is too often overlooked.”

Saving for a $127,750 down payment is no small feat. It would take a household with an average income nearly 12 years to save, and that’s assuming a 10% monthly savings rate with at least a 4% annual return.

Just 10 of the country’s 50 biggest housing markets have buying options that require 20% down or less. Pittsburgh is one of the more affordable markets. Buyers in the city can often secure a home without any down payment.

On the other end of the spectrum, most markets in California are unaffordable for average buyers. In San Jose, households with median incomes often need to put down more than $1.3 million to secure a mortgage on a typical home, according to Zillow.

If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders without affecting your credit score.

SELLING A HOUSE COSTS AN AVERAGE OF $54,000 – HERE’S HOW YOU CAN CONTROL COSTS

Average monthly housing payments drop $115 below highest record

Although current buyers are struggling with high down payments, homeowners are seeing mortgage payments drop on average. In the four weeks ending July 14, the average house payment was $2,722, $115 lower than the all-time high, Redfin reported.

Thanks to dropping mortgage rates, buyers and variable-rate mortgage borrowers are paying slightly less in monthly payments. For example, a buyer with a $3,000 monthly budget can afford a $450,000 home at a 6.8% rate. That’s an additional $25,000 in buying power compared to April when the same buyer could have bought a $425,000 home at a 7.5% rate.

Many sellers are tired of waiting for mortgage rates to drop more significantly, so they’re begining to list their homes on the market. This has led to a 6.4% increase in listings, one of the highest levels in nearly four years, lessening some of the pressure on buyers. How the market will look moving forward remains uncertain, however.

“Now that it’s looking increasingly likely the Fed will cut interest rates by the end of the year, some house hunters believe mortgage rates will fall more and are waiting for that to happen before they buy,” Redfin economic research lead Chen Zhao said.

“But they may be waiting in vain; it’s unlikely mortgage rates will drop much lower in the next few months, as markets are already pricing in the expectation of a rate cut in September, followed by several more at the end of 2024 and into 2025,” Zhao said. “In fact, now may be the right time for house hunters to get serious about making offers before prices increase even more and they lose some power. Plus, there are more homes to choose from, and many listings are growing stale, giving buyers an opportunity to negotiate.”

If you’re looking to purchase a home, you can check out Credible to find the best mortgage rate for your financial situation by comparing multiple lenders at once.

HOUSING MARKET SHORT 4.5 MILLION HOMES – HERE’S HOW THAT IMPACTS YOUR HOUSE HUNT

Homeowners insurance companies ask for increase in rates in a few states

One of the home expenses that continues to trouble consumers is homeowners insurance. States throughout the country are seeing major homeowners insurance premium increases.

California has been facing a particularly difficult home insurance crisis in the last few years, largely due to damaging wildfires that have caused insurance claims to skyrocket. Insurance companies are struggling to handle this sudden influx of claims.

State Farm recently requested the largest increase in rates California has seen yet. State Farm General, which is the company’s California branch, just submitted a request to raise rates for owners of single-family homes and condos, as well as for renters. The increase would potentially raise rates by 30% for homeowners, 36% for condo owners and 52% for renters.

Allstate is also asking for a home insurance rise in California this year. The company is hoping for an average raise of 34.1% across the state, down slightly from the initial 39.6% increase they wanted last year.

Higher repair costs and more frequent severe weather are the main reasons Allstate is asking for the increase. Paired with legal system abuses, these issues are causing the company to struggle to meet demand.

With different coverage amounts, it’s important to shop around to find the right home insurance plan that fits your needs. Visit Credible to start the process and maximize the value you gain from your homeowner’s policy.

FIRST-TIME HOMEBUYERS ARE OFTEN OVERWHELMED BY UNEXPECTED HOMEOWNERSHIP COSTS: STUDY

Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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Finance

Cross-Border Settlement Innovation and Real-Time Payment Architecture

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1 day ago

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August 15, 2026

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The global banking system is undergoing a comprehensive modernization of cross-border payment infrastructure. Driven by real-time settlement networks, open banking APIs, and interoperable messaging standards, financial institutions and multinational corporations are eliminating multi-day delays and reducing transaction costs associated with legacy international wire transfers.

Transition to Real-Time Gross Settlement Networks
Historically, international business-to-business (B2B) payments relied on complex correspondent banking relationships involving intermediary fees and processing delays. In 2026, the widespread adoption of ISO 20022 messaging protocols alongside interconnected Real-Time Gross Settlement (RTGS) systems allows direct, end-to-end processing of cross-border transfers.

Commercial banks are providing corporate clients with continuous, 24/7 payment clearing capabilities. Real-time transaction confirmation and automated FX rate locking allow international businesses to settle cross-border trade obligations within minutes, significantly reducing counterparty risk.

Central Bank Digital Currency (CBDC) Interoperability
Wholesale Central Bank Digital Currency (CBDC) pilot initiatives are reaching operational maturity across several key financial centers. Collaborative multi-CBDC platforms enable participating central banks and commercial institutions to settle foreign exchange and international trade transactions directly on shared distributed ledgers.

These wholesale digital currency networks eliminate traditional clearinghouse delays and minimize foreign exchange slippage. Enterprise treasury departments benefit from enhanced liquidity management, as cross-border cash balances can be deployed and repatriated instantaneously.

Corporate Treasury Transformation
For enterprise treasurers, instant cross-border settlement transforms cash management strategies:
– Working Capital Optimization: Reduced transaction float allows companies to lower precautionary cash reserves and optimize short-term liquidity investments.
– Automated Reconciliation: Enriched data formats embedded in ISO 20022 payment messages streamline automated general ledger posting and invoice matching.
– Reduced Processing Overhead: Account-to-account (A2A) real-time clearing bypasses costly intermediary correspondent banking fees.

Strategic Financial Priorities
1. Upgrade Treasury Systems: Ensure internal core enterprise software supports real-time ISO 20022 payment messaging standards.
2. Leverage Instant Clearing Rails: Utilize direct payment networks to lower cross-border transaction fees and eliminate settlement delays.
3. Evaluate Multi-Currency Liquidity: Modernize liquidity management frameworks to capitalize on 24/7 real-time settlement capabilities.

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Finance

Private Credit Expansion and Regulatory Oversight in 2026 Capital Markets

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7 days ago

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August 9, 2026

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The global private credit market has solidified its role as a fundamental pillar of enterprise finance, expanding rapidly across middle-market lending, asset-backed finance, and infrastructure financing. As non-bank financial institutions capture a larger share of corporate debt origination, global regulatory bodies are increasing oversight to evaluate market transparency and systemic risk interconnections.

Growth Drivers in Direct Lending
Direct lending platforms have continued to attract substantial institutional allocations from pension funds, sovereign wealth entities, and insurance companies seeking attractive risk-adjusted yields. Private debt funds offer corporate borrowers customized financing structures, faster execution timelines, and confidentiality compared to syndicated loan markets.

In 2026, private credit managers are increasingly financing larger corporate transactions, providing multi-billion-dollar credit facilities for buyout deals and corporate restructurings. The flexibility of private debt contracts—featuring unitranche pricing and tailored covenant packages—has made direct lending the preferred capital source for middle-market enterprise sponsors.

Regulatory Scrutiny and Systemic Risk Assessment
The rapid growth of non-bank intermediation has drawn heightened scrutiny from financial regulators in North America and Europe. Because private debt agreements are negotiated privately without public exchange disclosures, central banks are evaluating potential vulnerabilities related to asset valuation consistency and fund liquidity profiles.

Regulatory agencies are introducing guidelines aimed at improving reporting standards for private investment vehicles managing institutional assets. Key focus areas include monitoring leverage ratios within private credit funds and evaluating indirect credit exposures between commercial banking institutions and private debt funds.

Navigating Elevated Refinancing Costs
With benchmark interest rates remaining elevated, private debt borrowers face higher debt service obligations on floating-rate credit facilities. Financial advisory firms report an increase in proactive liability management strategies, including payment-in-kind (PIK) interest options, equity infusions from sponsors, and covenant modifications.

Private credit managers with deep operational capabilities are actively working alongside portfolio companies to optimize working capital and maintain cash flow coverage ratios during periods of higher borrowing costs.

Key Financial Takeaways
1. Mainstream Asset Class: Private credit has expanded beyond niche alternative asset status into a core corporate finance solution.
2. Enhanced Transparency Standards: Regulatory frameworks are evolving toward greater disclosure requirements for private debt managers.
3. Proactive Risk Management: Lenders and sponsors must prioritize debt sustainability and active portfolio monitoring amid high benchmark rates.

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Finance

Venture Capital and Startup Valuations in 2026: Focus on Unit Economics and Sustainable Growth

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2 weeks ago

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August 5, 2026

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The global venture capital (VC) ecosystem is operating under a disciplined investment framework in 2026. Following years of valuation adjustments and shifting liquidity environments, venture capital firms and private equity investors are prioritizing proven unit economics, positive cash flow pathways, and capital efficiency over rapid, unconstrained user acquisition.

The Shift Toward Disciplined Startup Valuations
Early-stage and growth-stage startup valuations have stabilized at sustainable historical averages. Venture capital partners are conducting rigorous due diligence processes before deploying capital, scrutinizing gross margins, customer acquisition costs (CAC), net revenue retention (NRR), and lifetime value (LTV) metrics.

While total capital deployed remains robust, seed and Series A funding rounds are taking longer to finalize. Founders are expected to demonstrate clear product-market fit and defensible intellectual property rather than relying on top-line revenue projections unsupported by strong underlying economics.

M&A Activity and Liquidity Solutions
The market for venture-backed exits is seeing renewed momentum through strategic mergers and acquisitions (M&A) and secondary market liquidity facilities. Established corporate enterprises are acquiring high-performing technology startups to integrate proprietary artificial intelligence models and specialized software solutions into their product ecosystems.

Simultaneously, secondary market transactions have become an essential liquidity mechanism for early employees and institutional investors. Specialized secondary funds are purchasing pre-IPO shares at discounted valuations, providing liquidity opportunities while companies remain private for longer durations.

Sector Allocation: Deep Tech, Clean Energy, and Enterprise Automation
Venture capital investment is heavily concentrated in deep technology and capital-intensive engineering sectors. High-growth investment themes include:
– Next-Generation Semiconductors: Hardware startups designing specialized AI processors and energy-efficient microchip architectures.
– Clean Technology: Battery chemistry innovations, carbon capture solutions, and grid-scale energy storage startups.
– Enterprise Process Automation: Software platforms that automate complex workflows in healthcare, financial services, and industrial logistics.

Key Insights for Entrepreneurs and Investors
1. Prioritize Capital Efficiency: Startups focused on achieving operational profitability receive higher valuation premiums from institutional investors.
2. Strategic Exit Planning: Corporate M&A is serving as a primary exit route for venture-backed startups navigating prolonged IPO windows.
3. Focus on High-Moat Technologies: Deep tech and proprietary software architectures are securing the majority of growth-stage capital allocations.

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