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Gateway Capital Mortgage Inc.: Your Partner for the Best Mortgage Rates

Significant changes were observed in Florida's housing market in the first quarter of this year. The Palm Bay-Melbourne-Titusville area saw the median down payment on homes drop by almost 41%, a decrease of about $12,000 compared to the same time last year. Ocala, in north-central Florida, experienced a more than 51% decline, amounting to around $9,000 less in down payments. Similarly, the Naples-Marco Island region saw a 14.5% drop, roughly $11,500 less.

Statewide, Florida experienced a 3% reduction in down payments year-over-year as homeowners hurried to sell due to rising borrowing costs and market uncertainties. This influx of sellers has increased inventory, benefiting buyers. Gateway Capital Mortgage Inc., a leading Florida mortgage broker, is here to help you secure the best rates and capitalize on this increased inventory. As a mortgage broker, we work with multiple lenders to find the best loan options tailored to your needs.

Market Shifts and Financial Pressures

Florida's housing market, which thrived during the pandemic due to an influx of out-of-state buyers, now faces elevated mortgage rates exceeding 7%. These higher borrowing costs have made purchasing new homes significantly more expensive, leading to a decrease in down payment amounts.

Potential buyers are struggling to meet previous down payment standards because of these increased rates. The market, now characterized by an abundance of listings and fewer buyers, has forced sellers to lower their expectations and accept smaller down payments to finalize sales.

Regional Variations in Down Payments

However, the decline in down payments is not uniform across all areas. While places like Palm Bay, Ocala, and Naples have seen substantial declines, other parts of the country, especially in California, are experiencing different trends. For example, in markets like Oxnard-Thousand Oaks-Ventura, buyers are putting down as much as 24.5% of the purchase price, reflecting the high cost of homes and significant incomes of buyers in those regions.

Down payments for secondary homes and investment properties usually require even higher percentages, around 27.9% and 27.3%, respectively, as noted by Realtor.com.

Impact of Pandemic-Era Savings and High Mortgage Rates

Despite the overall decline in some areas, the trend of high down payments persists due to pandemic-era savings and high mortgage rates motivating buyers to make larger down payments. This strategy reduces their loan amount and the total interest paid over the loan’s lifespan.

In the first quarter of this year, down payments decreased compared to the third quarter of 2023, both as a percentage of the purchase price and in dollar terms. However, there was an increase in down payments year-over-year from the third quarter of 2023 to the first quarter of 2024, indicating that down payments might continue to rise and possibly reach a new peak later this year.

Financial Preparedness Amid Rising Costs

As borrowing costs rise, deterring some potential homebuyers, those who remain in the market are likely to be better financially prepared and capable of making larger down payments. Gateway Capital Mortgage Inc. understands these market shifts and is dedicated to helping you navigate these changes to secure the best mortgage rates. As a trusted Florida mortgage broker, we collaborate with a wide network of lenders to find you the most competitive rates and terms available. Contact us today to see how we can help you take advantage of current market conditions.