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The deposit of the typical buyer decreased by 1% from one year to another according to a new Redfin report (Nasdaq: DRFN). This is the first annual decline of almost two years.
Median deposits are now at $ 62,428, or 15% of the total value of the house. This percentage did not drop significantly – a year earlier, it was 15.1% – but the dollar amount did.
According to the report, the last time lowered deposits decreased, it was in the summer of 2023. At that time, home prices at home decreased, resulting in a drop in payments. Now, the prices of houses are increasing, increasing by 1.4% in annual shift in April.
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So, what prevents payments for rising prices for houses? It turns out that there are a number of factors at stake.
To begin with, the way people pay for houses change. According to Redfin, nearly a third of buyers pay in cash, which means that they do not pay a deposit. Those who buy houses with a mortgage seem to buy cheaper properties, which explains a lower amount in dollars.
While interest rates persist around 7% and economic uncertainties persist, Redfin found that potential buyers were more sensitive to costs. Buyers of mortgaged houses seem more inclined to keep additional species in their bank accounts, rather than making follies on more expensive real estate.
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In addition, Redfin said that the number of buyers using Federal Housing Administration and loans to veterans to buy houses has increased in the past year. The mortgaged sales using an FHA loan increased by 1.1% in annual sliding, and those who use a loan is at the highest level since 2020. These financing options require a drop in payments, which contributes to pushing the overall amount spent for lower payments.
Finally, while the overall housing market is cooling and sellers are starting to be more numerous than buyers, Redfin says that many owners are more willing to negotiate with buyers. These negotiations may include acceptance of lower payments in order to capture a sale.
